Arguments can, and are, being made for why, to avoid an environmental collapse, we need exponential growth of solutions, we need to become growth agnostic, and we need to de-grow the economy.
For companies making claims of being sustainable, a force for good, or socially responsible, it is still only the very bravest who publicly question whether growth is right for them; and in those rare occasions, asking such questions can paradoxically lead to more growth (see Patagonia’s “Don’t buy this jacket” campaign). But it is in asking this exact question that we can most quickly, and I think most accurately, understand whether a company is enriching our world or exploiting it.
The answer is obvious if we just ask the right question.
B Corp scores, GRI standards, ESG indexes, even Environmental Profit and Loss statements, what do they tell us about whether we should want those companies to succeed (grow) or do us a favour and go away (de-grow)? Not a lot.
A more effective approach would be to ask any layperson on the street if Company X was to triple in size overnight, would that be a good thing or a bad thing? Their answer will tell you all we need to know.
It could range from “that would be awful”, to “I dunno”, all the way to “that would be fantastic”. Most companies might evoke the middle response, indifference or unsureness, but many would immediately illicit responses on the extremes.
For example, ask someone about Evian (a B Corp) and they might think that it was catastrophic, then ask someone about Dopper (also a B Corp) and they might think that’s terrific news. Simple, right?
Companies should exist to meet needs. And justifications for meeting all manner of needs can be made. A lot, if not the majority, of businesses meet those needs in a way which is in some way incongruous with a healthy and thriving society and a healthy and thriving natural world. That is the problem we have when it comes to growth. Those companies have a monkey on their backs, and everytime they grow the monkey becomes larger. By imagining the rapid growth of a company it help highlight the monkey.
We need to start asking these simple questions more often, because there are some companies genuinely trying to work out how to meet needs in a way which IS congruous with a healthy society and a healthy planet, and hopefully we will start to see more companies like them. It’s their growth, if any, which should be celebrated
So, what about your business? If it tripled in size overnight, what would people say?
I’ve always loved the quote from Buckminster Fuller “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” I love it so much in fact that I named my small consulting business after it.
The idea of there being a broken “old model” of business and a superior “new model” of business is central to my book Mission Lit. The book is, in a way, a guide to how you build that new model and strategies for making the old model obsolete.
In the context of a business I use “old model” to mean an established market leader who is in some way incongruous with a fair, just and sustainable world. They might create too much pollution, degrade and deplete too many resources, perpetuate too many power imbalances, or exploit too many people, in the way they meet their customers’ needs. Furthermore they might not be meeting those needs as well as they could be.
The new model, then, is a challenger who attempts to displace them by doing things in a way that is more congruent with the better world we all want. The idea that every industry is going to be magically transformed from unsustainable to sustainable by the natural and inevitable displacement of the old model by the new model, is at best wishful and and at worst deluded.
However, that doesn’t mean it doesn’t happen. We see examples of it all the time, and that has to be something we find hope in. To transform markets and the economy more widely into one which is fit for the future, it’s going to take all sorts of changes. We’re going to need deep systemic change, better business education, better governance, better regulation, more scrutiny and less impunity, and absolutely we’re going to need entrepreneurs who know how to make unsustainable businesses obsolete.
In every industry there are profit-blinkered companies with unsustainable and unjust business models ripe for being made obsolete by challengers. But when the big incumbents have so many resources at their disposal, the challengers need to use every weapon they have - and when your challenger business is genuinely better for the world, perhaps the most potent weapon you have is a story. And like any good story, for you to be the hero, you’re going to need a villain.
How this is done is something which I don’t believe is well enough understood. The first point I want to make is that this is not about telling people that the incumbents are bad and your company is good. That will achieve nothing. What you need to do is, subtly, help stakeholders - be they customers, investors, journalists, employees - understand that it is the incumbents’ innate character which has led to all the problems which exist and persist in the industry. What that does is it makes them directly complicit in those problems, by default.
The way you convince people that it is an incumbent’s character (its values, its attitudes, its behavior) that has led to the shortcoming in the industry, is you highlight them by being the antithesis. Again, you don’t tell people what their character is, you show them, and that way they believe it.
These antithetical characteristics should become guiding principles for how your company does things. The incumbent is closed off? You need to be open. They’re disconnected from nature? You need to be immersed in it. They’re greedy? You need to be generous. And so on. The great thing about going to the level of character and attitudes, is that then you can assess all your activities through this lens you can find endless possibilities for bringing your company's character to life. Endless possibilities to be the hero the industry needs.
Define a set of characteristics you want to embody and then task each department in the company to ask itself how they might convince people of those particular characteristics. The activities they come up with will form a unique approach which when done consistently and routinely will seep into your company’s DNA.
In Mission Lit, I look at the example of Monzo who in a few short years were able to make a dent in the UK retail banking sector by convincing customers, as their founder Tom Blomfield put it, that “Your bank wants to own you, we want to serve you”. By involving their customers in crowdfunding investment to crowdsourcing product ideas, responding to feedback and using accessible language, Monzo told its story powerfully. Every frustration you ever had with banking made sense now; the incumbent banks chose not to let you in, not to respond quickly to your needs, not to make things easy to understand; they chose to keep you at bay, put their needs before yours, and keep you in the dark. Monzo didn’t tell anyone this, they showed it to be true, by becoming the opposite.
Of course lots of businesses like the idea of being perceived as the hero the industry needs, but most don’t actually represent a better model of doing things. A major pitfall of businesses trying to be a hero is to superficially challenge issues which are tangential to their business but popular with their customers. Serious issues such as gender, race, and war become fodder in companies’ misguided attempts to be relevant, to be heroic.
But by not prioritizing the substantial shortcomings of your industry - say, exploitation of whole communities, pollution, or tax avoidance - your story doesn’t have a believable villain, and you won’t convince anyone you’re the hero. Maybe they’ll start to suspect you’re the villain…
Dun Dun Duuuun.
Like so many cases of companies misusing purpose and impact business strategies most companies not only miss the point, but also the opportunity. For those who genuinely offer a new, better model of doing things, the opportunity is there. Now show the broken model up for the villain it is.
Not all heroes wear capes, some routinely and authentically exhibit the antithetical behaviours of those who ruined their industry, and therefore convince people their competitors are the villains. As the saying goes…
The main objective of researching and writing Mission Lit was to understand how some companies were able to turn an ambitious mission (or purpose) to enrich the world into a competitive advantage. A secret sauce which other companies, more focused on extracting value than creating it, couldn’t replicate. My methodology was simple: speak to as many business leaders as possible who seemed to have the recipe for this secret sauce down to a tee, and had used it to great effect to challenge their industry’s incumbent leaders.
The difficult part was going to be poring through the interviews and trying to find the recurring ingredients which emerged. Except in some cases it really didn’t take much digging. The most conspicuous of all, was that when asked what gave these companies an advantage, every single person I interviewed said the number one thing was people. In many ways, the book could have been called It’s People, Stupid. At the best companies teams worked smarter, more creatively, more collaboratively, more restlessly, and more autonomously. It quickly became apparent that all great leaders are obsessed with people - after all it is the people that give you superior products, superior marketing strategies, and superior ways of working.
Ways of working is a loose, non technical term, but it’s at the core of the Mission Lit secret sauce I uncovered. In trying to understand exactly how these companies developed superior ways of working, what I discovered was not a prescriptive approach for how to structure your organisation and operations, but an underlying leadership philosophy. This philosophy was best understood in some of the companies in the more prosaic industries I looked at, for example banking and insurance. Their leaders understood that their industry might not be sexy, but creating change is.
Companies such as Monzo and Lemonade have both transformed their industries by giving passionate, very often young, talented people the opportunity to fundamentally change how something was done. Some of the best minds of their generation - who almost certainly never grew up dreaming of being bankers or insurers - working in banking and insurance, and loving it.
Essentially we’re talking about attracting and engaging the best talent, something all businesses recognise as important. But the point I really want to make is that this is not about perks and startup culture, but fundamentally doing things in different ways. Free bagels, office dogs and table tennis are much appreciated, but how you attract the right people, and the consequences of their work, all comes down to whether leadership genuinely gives them permission to do things differently, to really change things.
In the book I look at how the insurance startup Lemonade is fundamentally wired differently to other legacy insurers. They explained to me, “Lemonade thinks like a tech company and not an insurance company, even though we are a fully licensed insurer. There are things that we do – especially the agility with which we do things – that traditional insurance companies will have a hard time, if not impossible time, catching up with”. What’s allowed them to do this is they have convinced top tech talent to join them with the promise of turning insurance from a necessary nuisance/evil in society to a force for good, what’s more when they joined, they let them go ahead and make it happen. `
Lemonade organizes in squad structures, more similar to the inner workings of Spotify than a normal insurance company. The result? Lemonade took only 4.25 years to reach a million customers. For reference, US insurance giant State Farm took 22 years.
When researching Mission Lit one of the companies I really wanted to interview was Bulb Energy. They were a B Corp, tech-foward and championing a green energy revolution - what’s more they were the fastest growing private company in the UK. I was convinced they were the perfect case study, the perfect proof point that this “secret sauce” I’m talking about can really culminate in an untouchable advantage.
I never did get the interview, and in retrospect, knowing they did build a castle, but it was made of sand, I am quite relieved they aren’t in the book. But they are still a perfect case study, it’s now just a cautionary one.
So what went wrong with Bulb? Clearly a lot of things, but in terms of how they used the leadership philosophy explored in this blog let’s take a look. The company built a team of “Bulberinos”, a young, smart, passionate workforce all inspired by Bulb’s mission to make energy greener and more affordable. However, many of these Bulberinos soon became disillusioned, and reports of a toxic work culture followed. They hired people who bought into the mission to do generalist roles, for which they were probably overqualified to do. They were providing customer service, developing slick looking tech and selling cheap energy, but what were they really changing?
For example, it turns out their promise of 100% clean energy never quite stacked up, with analysis finding only 5% of the green power they provided to homes was sourced directly from renewable energy projects, and never invested in their own generating assets, such as wind and solar. And the tech they developed was never the true gamechanger being developed by other industry innovators such as Octopus. For changing the world to be sexy it actually has to in some way change the world
There are so many entrepreneurs in so many industries who can take advantage of this approach to leadership and gain a huge advantage in how they run their companies. They just need to remember you only get sexy if you really make change.
There was a time not that long ago when the product or service described as ‘sustainable' was seen as the worthy, ultimately less exciting alternative. 20 years ago taking someone to a restaurant famed for its sustainably sourced ingredients, maybe have evoked more apprehension than glee. The idea of eco clothing, definitely evoked images of Marcus from About a Boy more than the Met Gala.