If you’re a polluter, it is getting harder and harder to find somewhere to hide – certainly if COP 27 was anything to go by.
At that event, we learned two important pieces of news: firstly, the Al Gore-backed Climate TRACE Coalition unveiled satellite data that showed the world’s 70,000 worst sites for greenhouse gas (GHG) emissions. The focus of its readings was methane – current levels of which suggest that total emissions could be much worse than we thought.
In another, closely related development, the UN announced the launch of the Methane Alert and Response System (MARS): an initiative to intensify satellite research on global methane emissions. This will make it practically impossible for polluters to deny their contributions to GHG levels.
Those developments strongly resonate with the new reality of how we do business. Younger people who are coming into the workforce as part of what we may call the ‘Greta Thunberg generation’ want to lean into these challenges. They want to be actively part of the solution. They don’t want to be told what to do, but they will tell you what to do. They want to make a difference – and they will make a difference.
I’m a father of teenage daughters, and the differences between our generational expectations are stark. When I was growing up, owning your first car was something to celebrate. But my daughters’ take is very much: “We can book a car any time we like; it’s no longer desirable to own a car in this day and age, due to its environmental impact – fractional ownership will do just fine.”
Furthermore, we have reached a point where vehicle buying is no longer driven by traditional, private demand, because that’s collapsed by 20% to 40%. Instead, cities, regions and governments will be the biggest factors in determining and mitigating pollution – and thus who will drive where, and how.
Our company Mach49 has an office in Singapore, and if people there see a car passing by, they are OK – because they know that the driver has paid four or five times the average price to get it on the road. And that revenue is paying for the experience of everyone who sits on a bus. And buses don’t drive to a pre-set schedule – instead, to be more efficient, they follow phone signals picked up from bus stops. Lately, Singapore has even introduced self-driving buses, in extensive cooperation with global transport and telecom innovation partners.
One, major implication of these shifts is that the priorities of leadership must shift, too.
At Mach49, we specialise in building ventures for Global1000 companies across a range of technologies with environmental, social and governance (ESG) applications. And what we hear over and over again from our clients is that the old leadership mantras of oversupplying the marketplace with product (eg, the clothing industry), driving growth and satisfying shareholder value only are just not going to be sufficient it in this new era. These boards are keenly aware of the planetary boundaries that we are working within, and our clients are eager to measure their companies’ effects on those boundaries – thus launching new ventures to upscale and measure their ESG impacts.
We are seeing the fall of an internal mindset, and the rise of an external one, in which leaders acknowledge that they need to work together in a multiparty environment. COVID pushed people to take work deep into their private lives. Now, as we’re getting back on track, they want to take their private lives deep into their work and make an impact based upon their own, ethical positions. If that’s not working, they’ll decide to leave – and you won’t be able to get them back. So, it’s vital for innovative organisations to build exceptional ventures that demonstrate – in the way they’re led, and with a keen awareness of that inclusiveness and belonging – how their activities affect planetary resources.
This new approach will also lead to superior performance: now, ventures are driven by intrinsic motivations and people feel personally responsible for their success.
I’ve been around for a few years, sat on many boards and built a few ventures. But by the same token, I’ve learned an incredible amount from the people “on the floor” or at the “interactive edges of the organisation”. As part of the new leadership model, we must have a constant desire to learn – which means we must be very humble. We must be open to, and accept, the huge stream of information we can access from our people about how the concepts and technologies we’ve asked them to realise actually work. As a board member, it’s vital to know what’s going on “under the hood” – otherwise, the decisions you make will only be half-formed and superficial.
The more beautiful question
Going forward, inclusion and distribution are going to be increasingly critical factors behind how venture builders release new technologies. In the past few decades, organisations have focused primarily on efficiency in their markets – and arguably, that has led the private sector to a less desirable place. Now, we need to backtrack and ensure that, in our new product designs, we aim for distributed autonomy and participation, so that everybody wins – because if we keep only focusing on uncontrolled growth, then soon, there will be no habitable world to live in anymore.
We are now heading towards the third era of ESG awareness. The first was the reporting era, where organisations were beginning to understand their ESG obligations. The second was the measuring era, where businesses looked more closely at their effects on the planet and documented their activities’ positive and negative impacts. Very soon, we will see the action era, where ESG will stop being something that exists purely on the page and become far more applied – a practical model for effectiveness.
In parallel, we’re seeing the rise of very sophisticated ESG investors who really want to know what’s going on in the nuts and bolts of the ventures they’re funding. So, in that context, it’s clear to me that the single focus on shareholder value is a relic of the past – and the new leadership should reflect that.
In this new world, the future of organisational performance lies with a mix of seasoned, experienced staff and young people working together. Employers are now more active stakeholders than ever. They are smart, have mobile phones in their hands to find out about the world and make their voices heard – and they are more than capable of making up their own minds about what they see in organisational life.
One of the hardest parts of leadership is learning how to think of the thing you haven’t thought about and ask the more beautiful question. So, my main piece of leadership advice is what my own parents often gave: be quiet and keep listening for more; then discover, understand and act together in harmony.