Inspired By Nature: The 21st Century Business

2010 – 2020 = VOLATILITY

The unrelenting pace of change has increased dramatically in recent decades and the 2010-2020 decade will be hallmarked by its volatility and turbulence.  According to the Harvard Business Review, 2009, 50% of the Fortune 100 will have changed by end of the decade, with market turbulence at an all time high.

Drivers for volatility in 2010-2020:

• Volatile Input Costs
• Volatile Prices
• Volatile Consumer Buying Patterns
• Increasing complexity & risk in supply chain
• Changing demographics & world population shifts
• BRIC growth – multi-polar world
• Increasing socio-economic/political tensions
• Increasing scarcity of finite natural resources
• Increasing propensity of food & water shortages
• Increasing frequency of natural disasters and epidemics
• Rapid decline in biodiversity

The underlying turbulence within the global markets has been increasingly significantly for the last 20 years driving market volatility, mainly due to: rapid expansion of technology; rapid expansion of markets; increased complexity and interconnectedness of markets.

Organisations face an increasingly uncertain future and it is those organisations that learn to constantly adapt, seeking out and capitalising on new opportunities that will flourish – those that are slow to adapt or accelerate models that served them well in the past, will find survival harder and harder, eventually dying out.

Thus, it is a paradox of these times in which we live that as we witness a rapid extinction in the natural world we shall also witness a rapid extinction of business models and the corporations that cling tightly to them.  Such transformational times bring with them opportunities for the bold.  Organisations that can build agility into their decision making, product portfolios, value chains and operations will be the survivors, just as those species in nature that adapt to the rapidly changing environmental landscape will survive.

2010-2020 = SUSTAINAGILITY

The transition towards a sustainable future is a learning process – individuals and organisations learning to consume far fewer environmental resources (in the transformational scale of 90% less) whilst improving the physical and social contexts of life.

Becoming a sustainable (as well as adaptive) organisation is fundamental to success in the next decade.  A shift towards zero emissions (zero waste, zero water, zero GHGs/pollutants) is already in motion within some industries (manufacturing and consumer goods, for example).  Some of the drivers for this shift are:

• Peak Oil
• Resource scarcity
• Increasing waste costs
• Supply chain risk management
• Carbon pricing and footprint transparency
• Increasing stakeholder pressure
• Increasing compliance costs

The organisation that can factor in all of the costs (economical, environmental and ethical) related to its value chain will be gaining a clearer picture of its viability to survive.  This will help clarify the true bottom line.  It will set them ahead from the competition by enabling them to understand the areas of opportunity for product/service innovation, differentiation and growth (both the triple bottom line and triple top line becoming standard practice for the 21^st century organisation).

Designing for sustainability is not a simple move towards redesigning what exists, it requires a sea-change, a transformation, new ways of thinking – new ideas of well being and new ideas of business.  The key attributes of a sustainable business will become a core part of the DNA, values and culture of the sustainable 21^st Century organisation.  The attributes: social justice within the operations, value chain and communities touched by the organisation; environmental excellence – an understanding of the relationship of the components of the organisation with nature, conservation of biodiversity, reduction to zero emissions (waste, water, GHG); agility and absorption – balancing patience to wait for new opportunities with the flexibility and nimbleness to seek out opportunities in the changing landscape.

Organisations planning to benefit from the opportunities this turbulent landscape provides, must design strategies that build in agility and sustainability: SUSTAINAGILITY

Organisations that become defensive, seeking to minimise damage incurred to current business practices, focusing on making current processes more efficient, spinning the current wheels harder, accelerating what they have done in the past, will die out.

Hence, organisations need to learn to become resilient – dynamically adapt, becoming more sustainable and interdependent, within the dynamic non-equilibrium of an ever-changing economic market.

The Extended Value Chain: Linear To Holistic

The drive towards zero emissions and a more sustainable value chain brings with it a need for a holistic view of the complete inputs and outputs across the whole value chain. In fact there is a shift required from a linear value chain to a cyclic value chain.  Also, the business model itself needs to shift from linear concepts and processes to a more cyclic nature – products evolving to services:  rather than a product being sold to meet a one time need, the service solution offer provides the customer need over time, obtaining better customer service, longevity of contract and enabling the provider to have more ownership on the sustainability of the service provided – it not being about selling as many goods as possible, but providing the most optimal service possible, minimising negative impact to the stakeholders and environment involved; a cradle-to-cradle approach in operations and service provision.  Hence, a change in focus from selling material products to delivering results.  It is in the service provider’s economic interest to increase eco-efficiency of the system, whilst also enhancing the collaboration with stakeholders to improve the experience of customers within their ‘ownership’. This shift requires a more integrated view of the life cycles of material and energy flows – not limited to the operations of the organisation, but extending to the value chain, the communities being served and the environment affected.  Hence, there is a shift required from tracking, measuring and monitoring specific inputs and outputs within each flow, in silos, towards measuring the value across the flows and within and outside the organisational value chain as a whole: Systems Thinking, leading to internalisation of the externalities, improved sustainability and adaptability.

Closing The Loop

Evolving businesses from selling materials to delivering value-added services, coupled with a need to have a view across the wider sphere of influence of the organisation, leads to opportunities to close loops within the processes of the organisation – reducing waste streams and reusing one process’s waste as an input to another’s, reducing dependency on virgin material and fossil fuels whilst reducing pollutants and emissions.  This requires working with a variety of stakeholders touched by the value chain (local community groups, NGOs, academia, retailers, consumers, extractors, trade unions, etc.).  Those organisations that are most adept at creating mutually beneficial partnerships across the new stakeholder landscape will be most able to evolve in these volatile times – synergy.

The next decade, as well as being marred by volatility, will spawn the emergence of two major shifts:  The shift from the carbon to the solar/renewable economy; the shift from linear to cyclic – closing the loop.

Holistic measures gaining a complete view of the system optimal learning and adaptation through feedback loops, measurement of outcomes not outputs, creating and enhancing mutualistic relationships, shifting from linear to cyclic, adapting to a dynamic non-equilibrium will be key attributes survival techniques for the 21^st Century organisation.

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