Gritting The Corporate Oyster

This evening I did the first-ever keynote for the first Completion Ceremony for the new UCL School of Management, in the East Wintergarden in Canary Wharf. Because they couldn’t show more than a few slides at a time, I had to write the speech – which I really don’t much like. It tends to squeeze the life out of the process.

In any event, here’s the gist of what I said, after an opening speech by Professor Bert de Reyck, Director of the School, a welcome from Dr Marco Aponte-Morena, Director of the MSc Management Programme, and Gloria Pilz, the selected student speaker.

GRITTING THE CORPORATE OYSTER

Thank you, Marco for the introduction, Professor de Reyck for the opening [and Gloria for a powerful insight into what it has like being a student at the School of Management]. What an honour to be part of this extraordinary day! A milestone event for everyone in the room—including the School of Management itself.

Can I propose a round of applause BOTH for the 2015 graduating class … AND for the Director, Faculty and Staff who helped get you here.

***

Thank you all.

You know, my theme today ought to be: ‘Never Say Never!’ In the early 1970s, I missed 2 separate graduation ceremonies—one at the University of Essex, the second at UCL. One key factor: I didn’t want to wear fancy dress.

I swore I never would.

Then, last year I went back to the University of Essex to pick up an honorary degree—and wore cap & gown on a truly sweltering day. And now here we are again! But can I just say how splendid you all look in your robes!

You know, someone who knew sweltering weather was Miguel de Cervantes, author of Don Quixote, who died 399 years ago. And here’s what he had to say about the point you have reached [I have de-gendered what he sais]:

• “For [SOMEONE] to attain to an eminent degree in learning costs [THEM] time, watching, hunger, nakedness, dizziness in the head, weakness in the stomach, and other inconveniences.”

Presumably some of you know what he was talking about?

And all this while the new UCL School of Management was thundering towards its launch. What exquisite timing! But why? Because Capitalism, Business and Management Science are headed for a truly seismic shakeup.

I’ll describe that emerging reality later in terms of a Pressure Cooker. But, first, a public health warning. As my allergies to certain aspects of university life may suggest, my academic career was somewhat chequered. One memorable school report concluded: “John sets himself low standards—and consistently fails to achieve them.”

I went to university to study Economics—but gave up in 1968, because it seemed to have little to say about what was going on in the world at the time—particularly in the streets. I switched to Sociology & Social Psychology.

However, two economists—neither much liked by those who taught us—transformed the way I thought:

• Nikolai Kondratiev and Joseph Schumpeter.

In the midst of the Great Depression, Kondratiev told Stalin that Capitalism wasn’t dying; it was simply out for the count … Big mistake! Stalin was upset, had Kondratiev imprisoned, then shot. But a principled mistake: Kondratiev was right—in the appropriate circumstances, which proved to be World War 2, capitalism did come back, stronger than ever.

Schumpeter picked up the torch—with his work on the waves of Creative Destruction that transform our economies. The message: Whatever Prime Ministers like Gordon Brown may choose to believe, our economies are doomed to go through immense cycles of investment and disinvestment.

As a result, Economics is in danger of becoming interesting again—as a wider Paradigm Shift takes hold. These days, advertisers call just about anything a ‘Paradigm Shift’: from a reformulation of a toothpaste—to a new watch that monitors your heartbeat, or mood.

Wrong. A book that had a huge influence on me was Thomas Kuhn’s The Structure of Scientific Revolutions—which I read aged 14. Kuhn defined Paradigm Shifts very differently. These things, he argued, take 70-80 years to crank through.

It takes that long because a generation infected by the fading paradigm must retire, or die—followed by those they taught.nBusiness, Economics and Management Science are due for transformative change because we are 60 years into the next Paradigm Shift.

In this new world, everything is connected—and I don’t just mean the Internet of Things. Ours is a world where using the wrong product can help tear a continent-sized hole in the stratospheric ozone layer.

So a second quote, this time from Warren Bennis, the American leadership scholar. He observed that:

• “Success in management requires learning as fast as the world is changing.”

He should have said: … at least as fast.

Expect more change in the next 10-15 years than in the past 50. Consider this very building. When I heard this was happening in Canary Wharf, three memories sprang to mind—all underscoring aspects of the changes we now face:

The first dates back to 1973, when I was still at UCL—and this area was derelict. One morning around sunrise, I illegally climbed into the West India Docks to take photographs for my town-planning thesis … only to find myself targeted by two Alsatians and a Doberman Pinscher. They kept me pinned to the spot for what seemed like an eternity, eyeing my throat—until their handler arrived.

So, Lesson #1: If you take risks—and you must—be ready for surprises on the other side of such barriers, whether they be walls or organizational silos!

Incidentally, if you’re looking for a great late summer read, can I recommend Gillian Tett’s new book, The Silo Effect? It’s stunning!

My second story involves Government. For 6 years, I chaired the Advisory Council of the Export Credits Guarantee Department, just around the corner. (Today, they’re called ‘UK Export Finance’.) At SustainAbility, the company I co-founded in 1987, we were helping companies like Shell and Nike to embrace the triple bottom line, of People, Planet & Profit.

Getting the Government to follow suit proved a stretch. For example, we were forbidden to discuss defence contracts—maybe because the defence sector was—and still is—riddled with bribery and corruption. But by the time I left even defence contracts were under review, to a degree.

So why spotlight corruption? Because it narrows our horizons—at exactly the moment when we need to expand them.

Lesson #2: Corruption corrodes our ability to think clearly about the future and invest wisely. Fight it, wherever you encounter it. And remember: What they tell us is impossible today may soon be seen as possible—even inevitable.

My third story goes back to 2008, as the ‘Great Recession’ got its claws in. Once again, a camera was involved. I’d spent a day in the boardroom of a global company at 25 Bank Street, just along the road here. I took photographs of the Thames far below—and posted them on my blog. Suddenly, there was a hotline call from Security. I must take the photos down. Cameras were forbidden in the entire building. Legal action threatened …

I complied. Then, several days later I discovered why the company had been quite so jumpy. They were Lehman Brothers—on the point of declaring bankruptcy.

Lesson #3: We take major corporations for granted at our peril—many will disappear by the time you are half-way through your careers. One key reason will be radical transparency. Get used to cameras in the boardroom—indeed everywhere. Today, most people have one in their cell phone.

Next, business cards. You may have none, or several—but how interesting it would be to see all the job titles that will adorn your cards over the decades. My own have included: Senior Planner, Associate, Director, Managing Director, Chairman, and Chief Entrepreneur.

• In relation to the last one, if you found your own companies, you can call yourself anything you like …

But I have struggled to come up with a simple elevator pitch. A Greenpeace Director once described our company as “Greenpeace in the Boardroom,” or “Greenpeace in Pinstripes.”

Perhaps the closest I got to distilling what we do was: “We’re grit in the corporate oyster.” In the early days, if the oysters could spit us out, they often did—or at least tried. bBut where we stayed the course, good things could happen.

Just as grit encourages an oyster to produce one or more pearls, so the sustainability agenda can help trigger new insights and new forms of value. So a few quick comments on ‘Oysters,’ ‘Grit’ and ‘Pearls.’

***

For us, THE OYSTER is the corporation—the most potent organism in our economic ecosystem. In nature, each oyster produces 2-3 million young a year, very few making it to maturity.

Similarly, there is appalling wastage among business start-ups. Those that do survive promptly build the strongest possible shells to protect themselves from competitors, predators and parasites.

They invest in gates, security fences, CCTV, patents—and lawyers. Indeed, when I first tried to engage companies, after we set up Environmental Data Services in 1978, it took 9 months to get inside the first company—even though our parent group was well respected. Anything environmentally inspired was seen as likely to go for the corporate throat … as a result, we were initially fended off by lawyers and PR folk.

But, over time, we pushed upwards and outwards, helping bring other outsiders in from the cold—including groups like Greenpeace and Oxfam.

Then, just last week, I found a different part of UCL experimenting with a related approach. On impulse, I bought a collection of poems, called Laboratorio. It’s an account of a year spent by a poet in UCL’s Mullard Space Science Laboratory. For me, the book demonstrates that:

• Most scientists, sadly, don’t make great poets.

• But every organization that successfully brings outsiders in—or encourages its own people to get out more—can benefit hugely, often in unexpected ways.

***

Which brings us to GRIT—which, like much else in life, comes in both good and bad forms. As a result, even today, corporations confronted by those calling for a different future tend to snap their shells shut. It’s a reflex—very human.

When working with Procter & Gamble in the early 1990s, for example, a senior woman told me: “I wish stakeholders could swallow a pill that would help them see the world the way we see it.”

Remember The Matrix? In that film, you chose between the RED pill, exposing sometimes painful reality—and the BLUE pill, ushering in blissful ignorance. We try to swap the BLUE pills for RED ones, though we try to sweeten them slightly.

Here’s a story on that.

Shortly after Walmart was hit by Hurricane Katrina, in 2005, it found itself on the RED pill—and bombarded its suppliers with environmental questionnaires. I soon found myself in the boardrooms of 3M and DuPont.

Both had been environmental pioneers, but were now unexpectedly in a challenging reality as key customers rattled their supply chains. After one board session, a Non-Executive Director came up to me—she also turned out to be a psychologist.

She asked why I used humour in the boardroom? I said I had no idea, that it was situational, in the moment—because I can’t remember jokes to save my life! She had a different take: “You signal you’re not a missionary—that you can be playful even with your own agenda. People find that comforting.”

But then she continued, “You also signal that you don’t take the Board members quite as seriously as they take themselves! Harder to pull off,” she said, “but powerful if you get it right.”

This isn’t about an iron fist in a velvet glove. It’s about bringing our human side into the front line of business.

***

Now the PEARLS. Even the most lustrous pearl began as a pain in some poor oyster’s sensitive parts.

If I was using slides today, I would show you what we call the ‘Pressure Cooker.’ It illustrates some of the factors that will shape your careers—and, hopefully, help create tomorrow’s economic pearls.

It shows the heat being turned up underneath today’s economic system by population growth, new forms of globalization and global warming. In the seething heart of the pressure vessel, once separate challenges are increasingly cross-linked—including energy security, climate security, water security and food security. And that use of the word ‘security’ is no accident.

The lid is formed by global governance mechanisms like the United Nations—which is about to launch its Sustainable Development Goals for the period to 2030. Great, but our global governance mechanisms are not fit for purpose—so the lid could blow well before we get to 2030.

That’s the downside risk.

The potential upsides are also now exciting business groups like the United Nations Global Compact—Richard Branson’s B Team—and Michael Porter’s Shared Value Initiative. The market opportunities driven by the needs flagged in the Sustainable Development Goals will be valued not just in tens of billions—but in tens of trillions.

These are tomorrow’s mega-growth markets—for somebody. Sustainability will have its Gates’es and its Jobs’es. Indeed, one could well be Elon Musk of Tesla, SolarCity and SpaceX. Maybe one of them is in the room today? Let’s hope so: I’m sure UCL could do with further benefactors!

***

By now, you will have guessed that I’m a Baby Boomer. So you may expect me to say: OK people—over to you! No chance! We’re just getting started—and I wouldn’t miss the next bit for anything!

But the ‘Breakthrough Decade,’ through to 2025, will be make-or-break. As futurist Alex Steffen said in a recent tweet:

• “What happens in the next 40 years will be critical for all humanity for centuries to come.

• “What happens in the next 10 years will set the range of what’s possible.”

Let me share something the engineer and designer Buckminster Fuller told me over breakfast in Rekyjavik, shortly before he died. As some of you know, he celebrated the Trimtab—a tiny rudder on the giant rudder steering a supertanker. Turning the Trimtab first helps the larger rudder to turn, and then the supertanker that is proverbially so hard to turn.

Sometimes, by doing the right thing—at the right time—in the right place—you can have a quite disproportionate impact in shaping the future.  Unfortunately, it’s hard to see those moments coming—often you have to respond in the moment.

So my parting thought is this:

• What if the letters of congratulation and certificates handed out on days like today were awarded at the end of your career? … When we knew how you had employed your skills, education and opportunities …

Hold on to your paperwork, but know this:

1. In historical terms, you are immensely privileged. But immense privileges bring immense responsibilities.

2. You have had an extraordinary education. But education never stops—so how can you help the UCL School of Management help you over time by becoming a leader in Sustainable Capitalism? The field’s wide open, incidentally, with many business schools still mired in the old paradigm.

3. Finally, the future, in a very real sense, is your Oyster … But whatever you do, bring your own form of Grit to the party! And the three keywords adopted by your School provide useful clues as the where that will be necessary: LEADERSHIP, ETHICS and DIVERSITY.

• So, well done …
• Good luck …
• And please keep us posted on what you learn along the way!