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Our Insights 18 Sep 2014

Q & A with John Elkington on His New Book, The Breakthrough Challenge

By Chris Guenther

SustainAbility Research Director Chris Guenther recently caught up with John Elkington, Co-Founder of SustainAbility and Founding Partner and executive chairman of Volans, about the launch of John’s recently published book, The Breakthrough Challenge. In addition to the book, they discuss the dilution of the sustainability agenda, the shifting role of the Global C-Suite, and the upcoming Breakthrough Decade.

Chris Guenther: SustainAbility has closely tracked–and frequently discussed with you–your work on Breakthrough Capitalism, which you framed at the first Breakthrough Capitalism Forum in May 2012, and subsequently in the Breakthrough and Investing in Breakthrough reports. How have these ideas evolved to what is now represented in The Breakthrough Challenge, and what specifically drove you and Jochen Zeitz to write the book?

John Elkington: I had no plans to write another book, Chris, having only recently published my eighteenth, The Zeronauts: Breaking the Sustainability Barrier. But then I got an invitation from Sir Richard Branson’s foundation, Virgin Unite, to attend a small roundtable outside Geneva. On the second day, Jochen Zeitz walked in and, I have to say, there was electricity between us around our thinking and ideas. I didn’t give it much more thought, but a couple of months later he got in touch and suggested writing a book together.

When Jochen and I spent some days together, the book evolved further. The Virgin Unite meeting we originally attended proved to have been the gestational event for what became The B Team, a not-for-profit initiative founded and co-chaired by Sir Richard Branson and Jochen, and where I am on the Advisory Board. The idea is to bring together a global group of leaders to create a future where “the purpose of business is to be a driving force for social, environmental and economic benefit.”

So we began to think of framing the book as the manifesto for The B Team. And that’s the way it turned out, with a foreword from Richard and interviews with most of the B Team leaders.

At its heart, the book articulates a prescription for radical change. Its very language – breakthrough, transformation, paradigm shift, a new economic order – shouts ambition and urgency. But in a certain sense, sustainability advocates have been pitching the same notion for decades. In your view, just how far along in the process are we, and what are the one or two most important tipping points that convince you breakthrough is both possible and perhaps imminent?

Up to a point, Lord Copper, as a previous generation would have said. Most of the founding mothers and fathers of the sustainability movement believed that system change was essential, if not always inevitable.

But as the agenda mainstreamed, and was picked up by many people and organisations that had a pretty sketchy grasp on the nature and scale of the challenge, it often became conflated with citizenship, CSR and Shared Value formulations. Nothing wrong with any of those, of course, but they are often about win-win outcomes—when true system change often means win-lose outcomes, particularly for those left holding tomorrow’s stranded assets.

In simple terms, mainstreaming has diluted the sustainability agenda, often to homeopathic proportions. No offence to those who believe in homeopathy, but—having tried it—I don’t.

And here’s why I’m persuaded that, even with best will in the world, we’re fiddling while Rome—or Earth, in this case—burns. We’re on track to having burned our total carbon allocation for the 21st century by 2034—and are now on track for 4°C warming by 2100. This is a slow catastrophe, with marked signs that it will soon accelerate as we exceed the buffering capacity of the deep oceans.

My sense is that—and this has nothing to do with the French or even, to a degree, with the UN—the COP21 climate conference in Paris will mark a watershed in all of this. Weird weather is part of the equation, but there are moments when the science simply becomes overwhelming. We are very close to that point.

The stars of the book, which readers are hopefully enticed to emulate, are what you term “breakthrough leaders.” They are at once able to navigate the upper reaches of business today while also actively stretching notions of what business could or should be tomorrow. But such extraordinary people remain remarkable exceptions. Meanwhile, most corporate sustainability leaders and their counterparts in ‘core’ business still speak fundamentally different languages. What advice do you have for leaders on either side of this chasm so that they may begin to close the gap?

I’m not sure I agree that these are rare animals today. When I started working with companies, back in the mid-1970s, you were really lucky if you got to meet PR people or lawyers. Basically, these were people whose job it was to keep you out of the corporate engine room. They played a defensive game. We have seen a seismic shift since then. These days, if you don’t get to meet director-level people in the first round, you begin to wonder what planet the company is on.

Yes, many leaders in what I call the Global C-Suite still see all of this as a distraction, but that’s changing. Take a look at the water-energy-food-climate nexus work done by the World Economic Forum, for example, and it’s clear that the deeper parts of the sustainability agenda are flashing across into the security realm—with major implications for business and governments alike.

The advice to leaders who are still struggling with all of this has to be either, ‘Get Out More,’ or ‘Invite the Future In.’ Like organisations such as Leaders’ Quest, one of the things Volans has done in recent years is take leaders on study tours, learning journeys, to help them see a different world, different futures. As we concluded in our Future Quotient work, leaders now need to shift the needle from incremental to systemic change, to widen their scope, deepen their analysis, raise their ambitions and extend their time horizons.

In the good old days, to this end, we would have engineered it such that companies brought in NGOs to discuss all of this, but now such events are more likely to feature investors, government actors and even competitors.

And for those trying to close the gap between where they are and where they will need to be, it also makes sense to look around for collaboration platforms, many of which are pre-competitive, such as the American Sustainable Business Council, the Sustainable Apparel Coalition, the World Business Council for Sustainable Development, or the Zero Discharge of Hazardous Chemicals initiative. If such platforms don’t exist in your field, help set one up.

A recent Schumpeter column in The Economist argued essentially that the low-hanging fruit of corporate sustainability – measures that trim obvious risks and costs through enhanced resource efficiency, stakeholder engagement, etc. – has been picked, and that the business case for going further will be either much more complicated, or for some sectors, simply nonexistent. How do you reassure those who worry about the ultimate uncertainty of what lies ahead? Or more to the point, how might we encourage more leaders to seek a radically new order, even when their own or their organization’s security in it is far from guaranteed?

When we set up Volans in 2008, as a sister organisation to SustainAbility, we adopted the symbol of the flying fish (whose species name is Pisces volans, the second word meaning something that can fly) and used the metaphor of early manned flight to describe where we are in all of this. We spoke of Schumpeter and his focus on creative destruction. And then along came The Economist with its Schumpeter column, featuring the image of an early birdman about to jump off into space. Synchronicity. Zeitgeist, perhaps.

None of this was new for me, though. I recently went back to my first university to receive an honorary doctorate, but had to admit to the assembled throng that when I first enrolled in 1967, it was to study Economics—and I gave that up in 1968, switching to Sociology & Social Psychology. Economics then seemed seriously out of touch with the real world. And when we talk of the growing need for system change today, a key part of what we are talking about is the need for revolutionary change in Economics, the master discipline of capitalism.

The only two economists who really lived on in my memory, and profoundly shaped my thinking, were Nikolai Kondratiev and Joseph Schumpeter, both obsessed by long-wave economic cycles. Prime Minister Gordon Brown once claimed that we had ironed out the big cycles, but subsequent experience proved him devastatingly wrong.

So I’m afraid I don’t see it as any part of my mission to reassure today’s companies and business leaders that they can adapt to a radically new order. Most won’t or can’t. The nature and scale of what is coming at us is nicely (if uncomfortably) illustrated by the fact that recent valuations priced Elon Musk’s upstart Tesla electric car company at around half the value of General Motors. Inconceivable a few short years ago. Now Musk may fall flat on his face, as Shai Agassi did with Better Place, but the writing is on the boardroom wall.

I was intrigued to see one of the chapters in the book was on education. Although the focus is rather squarely on business schools, which by their nature have a relatively short amount of time (e.g., a couple of years, much of which is typically devoted to the post-MBA job search), often at the tail end of one’s schooling years, or even well into their career, to change their thinking. What, if any, role do you see for shifting earlier-stage educational approaches, and/or for other disciplines to contribute, in order to advance the breakthrough agenda? Is this an area where breakthrough leaders and their companies should seek to have impact?

For business, cracking open the B-schools and changing their paradigm is Job #1 in the educational space, alongside the task of re-educating their current crop of executives. One of the corporate initiatives that has excited me has been DSM’s Next initiative, effectively a parallel advisory board of Gen Y employees. Great idea!

As for earlier stage education, it’s crucial, and not just for the long term. It’s remarkable how often senior business leaders tell you that their epiphany came when talking to their children about what they were learning at school. The best education in this space would combine elements of a walk in the wild with David Attenborough (I’m off in a couple of days to see an elver farm run by the Sustainable Eel Group, for example) and the best of the X Prize world. Young people need to learn how to appreciate, treasure and conserve—and how to creatively disrupt the worst of the old economic order that would otherwise bring their futures down in flames.

Should members of the Global C-Suite get involved in this area? Of course—and many do. The more the merrier! But they should know that children spot phonies faster even than company employees.

You echo a familiar refrain in the sustainability field at the moment – essentially, that business must lead the way and not wait for governments and NGOs to either work out the big solutions or hold companies to account. But you’re quick to add that we need their leadership, too. How much further do you think business can go in the absence of these other ingredients, and what strategies does breakthrough capitalism recommend for beginning to correct the imbalance?

Incumbents will struggle, insurgents will disrupt. An Elon Musk doesn’t much care about government, as long as it doesn’t get in the way. The future is bubbling up under the incumbents, both in the private and public sectors, and the implication is that at some stage we are going to see a wholesale reinvention of government and governance.

In the past, such eras of change have been driven by pandemics, depressions and/or wars. And, for better or worse, I think we are much closer in to such seismic disruptions than most people currently realise.

On government—I worked with a range of government agencies in the 1970s, and then again in the 1990s when I spent seven years as an advisor to the European Commission. As a result, I have fierce antibodies to most aspects of government. But, perhaps paradoxically, I also see the role of governments and governance institutions as critical—and growing in importance. The key point about initiatives like The B Team is that they now argue the need to level the playing field up, whereas business long argued the need to level down.

Indeed, I have recently been reading Ed Conway’s The Summit, a fascinating history of the Bretton Woods summit in 1944. How privileged we are to have grown up in a world framed by the genius of people like John Maynard Keynes and Dexter White. But the shelf-life of the UN system has expired. It isn’t just that we need companies to fill the gap—we need companies that help a wide range of other actors to help co-evolve whatever it is that will come next.

And what is true for the institutions of global governance is also true for most national governments. They are losing their grip. Bright young people are increasingly disinclined to go into government. And this threatens to become a vicious spiral. Personally, I would like to see more business people running for political office, and more government people getting at least some experience of how the private and citizen sectors work.

In terms of what comes next, we are thinking in terms of a Breakthrough Decade, from 2015 to 2025. Our new book, The Breakthrough Challenge, is an attempt to sketch out a more ambitious, stretch agenda for business and for financial markets. Ultimately, too, this means a transformed agenda for voters, politicians, governments and the public sector in general. And the nature of politics means that politicians will continue to be lagging indicators of change for a while yet.

Still, there’s something I routinely say to younger people who come through our offices, and who note that they wish they had been around for the golden era, the glory days, of environmentalism and sustainability: The glory days are still out there, waiting to be had. I hit 65 years old this year, having now worked in this space for just over 40 years, but I genuinely believe that we are now on the threshold of the most exciting, fast-paced decade yet.

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