Episode 38 | The Adventure of Sustainable Performance

Stuart: As both Dean and I have mentioned, the big stick of compliance is out. So we’re through this phase that actually we’ve been in probably for 20 to 30 years where organizations, the leaders of those organizations have decided that they’ve got a choice as to whether they step into the reality of what’s going on and lead their organization in response to a crisis that hasn’t just appeared in the last three or four years it’s been around for decades. I mean I was brought up in, I remember Margaret Thatcher giving a speech to the United Nations in New York the day before the Berlin Wall came down saying hey climate science is real and the world’s got to decarbonise. I mean it’s been around for a long long time. But there is no doubt that the world has woken up to the reality of this crisis in the last three or four years. And as a result of that, now we have a rapidly changing regulatory landscape. Because it’s no different to, for example, the pandemic, where we had to do certain things. We had to allow ourselves to be locked down. We had to follow new rules, whether it was wearing face masks or whatever it might be. We had to follow new rules because we needed to lighten the load on the health system. And now we have to follow new rules because we have to lighten the load on the planetary system. And, you know, we came up with a new economic model in the pandemic called furlough. And I know the US, UNO, which is a name which I’ve forgotten just for a moment, you will probably remind me, but in Europe it was it was predominate furlough in the same way as now we talk about donut economics or we talk about the economic model of Mariano Mascato, we need to bring more balance around the rate at which value is created versus the rate at which value is extracted, you know, so but these are all models and systems for the transition in the same way as we had to get through the pandemic. So we need to get through this crisis and this crisis obviously is a planetary level, it’s a bigger crisis, but you know, we need to do certain things. And so that is why we are seeing now such a rapid response because obviously we can see what’s coming down the pipe. We can just see that the avalanche of regulation is just going to increase for the foreseeable future.

Chris: Yeah. No, it’s fascinating to see how it is all adapted over the time, right, that we’ve all been engaged in the space and to see it starting to come together. Dean, you mentioned that there’s lots of elements in the book which provide that guidance and how-to insights. And in particular, I love a lot of the language that was applied throughout it, whether that’s ERA’s strongholds, leadership, the pivot, the campfire, et cetera. We’d love to hear from both of you. Is there a concept or group of concepts that you feel is misunderstood, really critical for people to get their heads around just to give them a taste of what’s in there?

Stuart: Yeah, I’m happy to kick that one off, Chris. I think good to hear that you see lots of different thoughts and ideas and concepts in the book, even around this kind of very central core organizing idea, which is the reality of now and the challenge and the threat of a new relationship with nature and a response to that being this compliance that we’ve been discussing. I think that the chance to rethink and to launch into day two, I suppose I’d take two. I think the campfire is an amazing moment and an amazing opportunity. And you can take from that microcosm of the experience of that sort of two days, the campfire is an ongoing opportunity for leaders to reflect on what leadership means for them, who they are, who they are becoming, where they want to go personally and professionally with the organizations that they’re responsible for and the assets that they’re responsible for. So I think the sort of time to sort of almost take time out to get some perspective and distance, not easy for leaders, because this is just one of the aspects that they’re dealing with. And as we know, the executives in any organization, be it private sector or foundation or public sector, you know, people are busy. It’s complicated and it’s complex, but there is a requirement here I think just to have the chance to take a different perspective on the situation before you get stuck on this Groundhog Day, Hamster Wheel kind of experience of day one because the compliance agenda is there and you have to keep filing reports year after year after year. Is that what you came into Enterprise to do? Is that fulfilling you? Is it fulfilling your people? Is it attracting people? Are you retaining your talent, are you fulfilling your potential as a leader in that. So I definitely think that the campfire is a critical thought in the book at that moment between the two worlds of day one and day two. What I’d also say is what I think fascinates me is day two, and one of the things that really occurred to us as we interviewed those sort of people who were born into day two, those canoers who weren’t even aware that it was a day one in a sense, is the excitement and the energy of creating the solutions, the integrated sustainable performance solutions to many of these challenges. It’s almost not to be burdened by the compliance, but to be excited by the solution. And I think one leader in particular that I would call out is Sam Alimia who is the founder of C1 Ventures who is setting up a VC fund to invest in technologies that many of us have yet still to hear of, or some of them are already scaling, some of them are still quite early stage. But I find that whole idea of capitalising on understanding the exciting opportunities to create organisations that will address these problems rather than to come in with a tick box day one mindset. So for me I think the two things, campfire for all leaders, the energy and the excitement of day two, even for someone with 25 years experience in sustainability, I am very excited about day two, for myself, for Anthesis, for the next generation, and for the leaders that are coming through. I think Day 2 is just full of hope, opportunity, excitement and adventure.

Stuart: Yeah, I hope the book is a little bit Shawshank-ish. And I say that having sort of watched Shawshank with my 50-year-old boys just recently, and it’s a pretty tough watch because the horror of the experience, and you’ve almost got to go through that, you ask, especially when you are watching it with your son, how much of it feels like it is gratuitous and you get to the end and you realise you have to be taken through all the horror of that experience to be able to get through to the incredible hope and joy and release and liberation of the ending of it. Hopefully that is not a spoiler for all those people listening who haven’t watched it. But anyway, we start the book with rooting it in the reality of now, and we do feel that you’ve got to go through that, and you can’t just gloss over it. You’ve got to go through that, but we hope that as the book continues that we build up this hope. I’ve said to my kids, what a time to be alive, because for most of my career, I’ve had to work in broken models and systems, and make the best you can, knowing that they are broken. And now actually those models and systems are breaking down, now the next generation has got the opportunity to fix it. It might feel uncomfortable, it might feel a little bit scary and full of jeopardy, OK, that’s the transition zone. But be positive, be hopeful, be excited, because now you can reimagine something much better. And I take it back to, you know, if you go back through history, you can see these different eras and how they’ve been built up and broken down. And the one I’m particularly fascinated in is the end of the slave trade. We had an era that was developed, strongholds were built based upon the models and systems associated with the slave trade. And we give the credit to William Wilberforce and the Clapham sect for the work that they did in that 30 year period to bring the slave trade to an end. And effectively that was their transition zone, between when one era comes to an end before another era starts. And you can see the way they operated and the type of leadership that they embraced at that time to be able to force the strongholds of the old era to crumble. And of course they’re all the same stories, they all had to say yeah you know they might be a bit broken, it might be wrong, it might be unethical, et cetera, but what we’re doing is, when we become wealthy, then we’ll try to compensate in some way through philanthropy, through charity, but actually the core model is wrong, the foundation is wrong, if business is operating the way business should operate, you shouldn’t need all this philanthropy over here. And actually, it’s not in the book, but that’s why this podcast becomes extra special because we’re giving more information here. If you look at what happened in preparation for William Wilberforce, you had the Quakers who for 30, 40 years were demonstrating to the world that you could operate business, you could grow business successfully in a different economic model. And so, round trees and cabarets and barclays, bank and boots, et cetera, I know they’ve changed a lot now, but they were all Quaker businesses that started at that time. Incredibly successful. Operating outside the economic norms of the prevailing model to be able to demonstrate you can have success. And we see that now. What we are trying to do is pull out those kind of examples in the book to be able to demonstrate, hey, you can actually be successful operating in a model that looks more like a model of sustainable performance. Pulling on all that kind of excitement you just heard Dean talking about in the transition zone, starting to bring those in the way you do business to inspire then others to change more rapidly, just as the Quakers did in preparation for William Wilberforce to be able to then deliver the change that then happened at that time in history.

Dean: Yeah, I think for me, it’s interesting, isn’t it? Because I’d like to say it was all of the day two folks, but I think what I find, I’ve been working with the Nespresso business for a few years now, and through our partnership now and the integration of the Charlescannon Agency, we are working together on telling the impact story of Nespresso. And every time I go back into that and look at the way that that business, under the leadership of Guillaume Lecoeuf, I think, is always asking questions of compliance and thinking how can we make that work harder for impact and for performance in an integrated way. I mean, I can just, again, I’m not sure whether we illustrated that in that level of detail in the book, but in the coffee sector, there are a lot of voluntary standards and there’s a lot of voluntary compliance with those standards. Standards like Fair Trade and like Rainforest Alliance are really good standards. But they’ve become quite generic. In fact, we had Santiago Galan, the CEO of Rainforest, talking to us recently in the London office. And what he’s now trying to do with that organization is to take it further. Because in some sense it’s good news, the certification, which was at one point quite differentiating, has now become quite generic and quite sort of table stakes. But what we did with Nespresso is we connected that the rainforest standard with the Nespresso quality standards that we created a hybrid, something that only Nespresso had, which adhered to the generic sustainability standard, but just did something a bit different, which was a important kind of component on Nespresso, which is we are Nespresso quality with rainforest sustainability. So I think, and that was 20 years ago, and I think this idea of looking at standards and sort of generic compliance through a lens of thinking through how does that work for my organization? Do I just want to tick their box or do I want to have a conversation? And similarly, what Nespresso has done with Fairtrade is to take some of that premium and say, how can we solve some problems related to climate change, like crop insurance for smallholder farmers or retirement savings schemes. How can we work together to deploy that capital that we’re transferring upstream in value chains to be really meaningful in terms of some of the upcoming risks related to climate? So I really like what that organization has done in terms of integrating compliance with performance, which I think is a really critical element of what we need to be doing collectively.

Stuart: I have to say that when I look back with hindsight in terms of why write a book, the opportunity to speak to so many inspiring people that the book allowed us to speak to was probably as good a reason as any. So I’m going to go a little bit home team. So I’m going to talk about René Tout from Climate Neutral Group. group and one of the things I find particularly alarming is the agriculture system and how we’ve industrialized that, intensified it and the short-termism associated with it. So when I look at the work that René and the team are doing in South Africa and in Latin America, what we’re experiencing is that over the last 50 years the particular form of agriculture that most of the world is pursuing has stripped about 60% of the nutrients from the soil. And the reason why that is, is because the stronghold that businesses tend to operate in, where suppliers are deemed to be external to the corporate stronghold and where buyer leverage is used over supplier leverage to get higher yield at lower cost year on year has led to farmers being told that the only way that they can achieve that is to throw more chemicals at the soil and every time they get a yield, that’s for sure. They might be struggling now to get a high yield year after year, but nevertheless it’s kind of worked for a long that period of time. But of course we’re stripping nature at the same time. So there were land is becoming more and more dependent upon chemical use and what we’ve been able to do is use the intervention of climate finance.To be able to go to farmers and say OK if you farm ethical way, if you if you leave that intenser form of farming behind and you farm in a more regenerative way, then we can unlock the value of this climate finance and we can make sure that you are compensated for the risk that you might be taking and the first cohort was maybe 30 to 40 farmers and over a period of two to three years now you can see that actually the grasslands or that that particular patch of land is so much healthier because they’re farming regenerative way and actually their yield has gone up.The yield is gone up, and not only has their yield gone up, but they are now about to get the contribution that comes from those climate finance mechanisms. So they’ve got an alternative form of income and that alternative income is coming from corporations who are typically not in that food system but are effectively saying OK we need to buy offset, we need to buy some bonafide carbon credits at the high quality end of the market obviously, which these are. And so there’s an alternative form of income that’s coming from climate finance which is effectively breaking that old model. And that now means that buyer-supplier leverage conversations are now disrupted and that puts farmers in a position of growing power within the value chain.What does that do? That means that the leaders of organizations are now starting to realize they need to see their businesses ecosystems.So they need to get their arms around the full value chain, including their supplies and become more dependent upon the loyalty that comes from having a value respectful relationship with your suppliers as opposed to trying to use your leverage to exploit them, year on year. So we love those kind of interventions and those kind of.Disruptions that we are, we are starting to see where we see a soft benefit, we see environmental benefit. We also see what we believe is going to be benefit to businesses in the long run.

Chris: Yeah. No, it’s amazing to see that excitement and that total value structure as you outlined in the book. So maybe one final question for the two of you. What will be a key insight lesson or action that you hope people would take from reading the book? 

Stuart: To step on the journey, step out on the journey. Recognize that actually you have no choice for that.You need the right guides around you, you don’t actually need traditional consultant. Traditional consultancy is a stronghold as well.That is a broken model.You know, you don’t need a consultant. There’s just gonna rock up and say, you know, here’s a consultants report. Good luck. And then leave, leave you to it. You need guides. You need people who gonna come alongside you, not just with the right advice, the right expertise to say, hey, they’ve travelled some of the journey, they kind of know what’s ahead of them, you know, with that kind of experience, but they’re gonna come along with the like equipment.And not strip the capacity and the capability from organisations into the consultancy company, but to empower organisations and to build capacity within those organisations, to be able to go on the journey themselves and they need guides, knockoffs, they need guides to be alongside them all the way and that changing relationship that organisations need to have.With companies like Anthesis as they step into the transition zone and recognise the peril and the opportunity of this journey that they’re now on and have no choice but to be on.That that is the bravery and the courage and the excitement and the opportunity and everything that we talked about through this podcast. You know, that needs to feel that kind of action. That is the one I hope that will come from people reading the book. 

Dean: Yeah, that’s great. Yeah, I mean, just building on that, Chris, I think that I might always sort of distinguish between two audiences versus our own people at Anthesis.Our fellow Anthesians, I think that I would love for us to see ourselves as these. I think the term that there’s a sort of term is beginning to develop around being activated guides, which I love. We’re not consultant in that sense that Stuart was just alluding to that we’re sort of always looking to extract value from our client partners and all those that are sort of outsourced that to us, we’re looking to equip, empower a company on that journey. So I’d love this to be a sort of call to action to each of us to just improve our own capacity and capability. To speak to myself, I think it really became clear to me that the power and usefulness to organisations is to have people there for them with them or the journey is activated guides. So I, you know, I definitely would encourage those of you who’ve had a chance to sort of get hold of a copy of this book. If you do. Chris, thank you for having read through it. I’d love us all to get into that mindset and attitude of being activator  guides for our planet. Second audience is our client partners and I think periodically in business literature you know books come along that remind leaders that there is something adventurous and exciting and special and precious about being a leader. I think there’s also just having vision and being determined. I think one point, we talk about entrepreneurship and spirit and grit and it’s not always easy building teams you can inspire, but who also are with you in that journey, I think I’d just love for people who are responsible for significant assets, big organisations, as I say, be they private sector, public sector or nonprofits, to sort of rethink their roles as we all collectively pivot from where we’ve been to where we need to get to. So if they can take some encouragement about the benefits and the opportunities of true leadership .Because I think that’s what we’re talking about, the new leaders in the new era. Then we would have, I think, served the purpose.

Chris: Wonderful. What a great place to leave it off. Thank you both so much for the time and insights today, for the language coming out of the book, all the inspiration, you know the real excitement around kind of the leadership opportunities in day two. So thank you both so much, I appreciate it.

Dean:  Thank you, Chris. 

Stuart: Thanks, Chris.

Dean: We’ll look out for your review on Amazon.

Chris: And thank you for listening. You can access Stuart and Dean’s book The Adventure of Sustainable Performance in hard, and e-copies in all the usual places, and we’ll provide a link to that in the meeting notes. Thanks again and keep well.