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Why Businesses Must Look Beyond Their Lifetime: Full Transcript

Why Businesses Must Look Beyond Their Lifetime: Full Transcript

Our panellists, Sophie Howe, Christa Gyori and Charles Wookey talk to The Beautiful Truth’s Co-founder, Adam Penny, about why businesses must look beyond their own lifetimes.

26 minute read

22nd May 2023

On Thursday 18th May, The Beautiful Truth hosted a live panel event with contributors from Issue 02 of the magazine. We delved into infinite thinking and how it can help businesses become a force for good in the world. Watch on demand here.

Sophie Howe, Charles Wookey and Christa Gyori

Adam: Hello and welcome to The Beautiful Truth’s live panel discussion on Inspiring Infinity: Why businesses must look beyond their own lifetimes. I’m Adam Penny, the CEO and Co-founder of The Beautiful Truth. With me today are three distinguished individuals, all who feature in the current edition of The Beautiful Truth Magazine. We’re going to delve into their backgrounds and learn from their experiences before getting into the subject of Inspiring Infinity.

Adam: Sophie, I want to start with you. Tell us about the journey to becoming the first Future Generations Commissioner. 

Sophie: I’ve got a long history working in public policy, predominantly the public sector. That long history also came with a lot of frustration about the way that public policy is designed and public services are run. Generally everything we do is very short term.

My job before being Future Generations Commissioner was Deputy Police Commissioner in our largest police force here in Wales. Essentially, what the police were doing was picking up problems that had gone wrong elsewhere in the system, often retraumatizing people in that system and making the situation worse because we take a very short-term view on things. We don’t look to the long term. We don’t try to prevent problems from occurring or often even getting worse. We don’t join up our policies and our services, and we often don’t make them people-centred either.

Adam: How did the concept of a Future Generations Commissioner come about?

Sophie: It started its life as a manifesto commitment that simply said, ‘we will legislate for sustainable development’. A minister at the time, Jane Davidson, was clear that we must put some more meat on the bone of what we mean by ‘sustainable development’, because it doesn’t necessarily mean anyone is taking action or operating in a sustainable way. She wanted to create some more specific legislative duties.

When she retired, the new government was left with something that was her idea that they were now committed to. They held a national conversation with the citizens of Wales to ask, ‘what kind of Wales do you want to leave behind to your children? To your grandchildren? To future generations? So it was the people of Wales who decided that we should have these seven long-term wellbeing goals that make up our vision for the kind of Wales that we want to leave behind.

Adam: And what did they include?

Sophie: A prosperous Wales, a wellbeing economy, protection of nature, cohesive communities, equality, health, culture and language. My job was to advise the government and our other public institutions covered by the Future Generations Act to provide inspiration and identify what will make the biggest contribution across each of those seven wellbeing goals. I proposed that we should completely reform the way that we think about transport. We need to be thinking about transport not just as something that gets us from A to B with economic benefits and, but as something that can improve our health, be sustainable and help us meet our carbon emissions targets. It can bring communities together. We’re no longer making the majority of our investments in building roads, which is what we were doing previously, but rather it has shifted towards public transport. 

Adam: When there are different leaders coming in and out of power all the time in the electoral cycle, how do you manage to keep a consistent level of progress?

Sophie: The act sets out these seven long-term goals in law so they don’t change from one electoral cycle to the next. The steps that different political parties might take to deliver them will change, but the goals themselves don’t. That’s incredibly powerful because the act applies only to the public sector, but increasingly what we’re seeing is the private sector noticing that there’s something really valuable in a country that has a long-term vision of where it’s going. You wouldn’t think that that was revolutionary for a country to have a long-term vision, but it is. Most other countries operate on the basis of one election cycle to the next. So it’s incredibly powerful to have that. 

“You wouldn’t think that that was revolutionary for a country to have a long-term vision, but it is.”

Sophie Howe

Adam: You mentioned recently the notion that we spend more time thinking about ice cream than our future. 

Sophie: Toby Ord, who’s a professor of existential threat at Oxford University, says that there’s a one in six chance that humanity won’t survive beyond the end of this century. And that governments across the world are absolutely woeful at thinking and planning for the future, particularly when it comes to existential threats. And he says that globally we spend more money on the purchase of ice cream than governments spend on embedding foresighting, looking at future trends and potential risks.

I think he’s absolutely right, but the challenge that I would respond with, is when we look at the future, generally we think about what risks might be coming our way. Most things we think about the future are dystopian. Creating a positive vision of what a country could look like in the future flips that on its head. 

Adam: It’s an interesting question of whether we should just be mitigating risks or creating a story of a future that’s inspiring and exciting. I agree that often when we look at the future, it’s dystopian and it’s short.

Adam: How do we think beyond that? How are you helping people to think in more inspiring ways about the future?

Sophie: A number of countries are interested in following what Wales did and having a national conversation with their citizens. That’s not absolutely perfect because we’re talking about people yet to be born, and we can’t ask what they want. But, we’re working on our best guess. Once those long-term goals are set out, it gives something for people to aim towards. It’s really powerful when you have something to focus on and strive for. 

“Once those long-term goals are set out, it gives something for people to aim towards. It’s really powerful when you have something to focus on and strive for.”

Sophie Howe

Adam: You’re now advising different people around the world on achieving that vision. Which countries are picking it up?

Sophie: There are many countries doing various elements of it. Scotland, the SNP committed in their manifesto to having a Future Generations Act which is currently going through the government machinery. There’s a private member’s bill in the Irish parliament. There was a private member’s bill in the UK Parliament. A couple of weeks ago, the Balearic Islands created a Future Generations Act with the commission to oversee it. I’ve recently been advising the Australian government and Canada are also developing something similar. The UN Secretary General has proposed that there should be a UN Declaration for Future Generations. They’re proposing an appointment this year of a UN Special Envoy for Future Generations – the equivalent of my role – and that has a real potential to have a trickle down effect.

Adam: Fantastic. It feels like the start of a big change. Let’s move to Christa now, CEO of Leaders on Purpose. You work with organisations, governments, the financial sector and business. Tell us about the genesis of Leaders on Purpose.

Christa: I spent most of my career working in multinational businesses. So Leaders on Purpose was started as a research project. I was at Unilever and had received a fellowship to Harvard for some of the work that I’d done at Unilever in the area of business transition. It was 2015, the year that the Harvard Business Review changed what it meant to be a top CEO: instead of only ranking businesses on their financial performance, they incorporated  ESG performance. When they did that, the list of top CEOs radically shifted.

Jeff Bezos had been number one for several years, but he fell to 87. Warren Buffett dropped off the list. We saw the emergence of other leaders that were doing business differently. Together with colleagues from Harvard, London School of Economics and the World Bank, we founded LOP. We work with a lot of different policy makers across different sectors to support businesses in the transition to become more sustainable and to do it faster to learn from each other. 

We don’t have time to reinvent the wheel – we need to change urgently. What are the things we should be thinking about? How can we do it faster? Multinationals are the world’s largest global actors – Unilever impacts 3 billion people with its products every day. At Procter and Gamble, it’s 5 billion. So when businesses of this size make change, it has huge repercussions. 

It was interesting to hear Sophie’s comment that there’s a one in six chance we won’t make it to 2100. I was sitting here thinking, God, I have so many friends that are just having children right now. We have to think about the future as a really pressing issue, and part of that is getting these big global actors to transition their business quickly. 

“Multinationals are the world’s largest global actors – Unilever impacts 3 billion people with its products every day. At Procter and Gamble, it’s 5 billion. So when businesses of this size make change, it has huge repercussions.”

Christa Gyori

Adam: Are you seeing things begin to shift? Are business leaders beginning that journey? 

Christa: Absolutely. I’ve been doing this since about 2012. Currently, we’re hearing a lot of pushback about woke capitalism because there’s been a groundswell of interest and movement in this area. The barriers to sustainable business are definitely coming down. 

It’s a false dichotomy to say that you’re either purpose driven or profitable. What we’re seeing is that businesses that are purpose-driven have greater employee retention, greater stakeholder trust and closer relationships with their customers. I think that purpose-driven businesses are the best investment for short and long-term investors. Certainly there will be highs and lows – there are externalities and material issues that are beyond a business’s control. But over a long period, these are the most investable businesses.

Adam: That brings us on nicely to Charles, Co-founder and former CEO of Blueprint for Better Business. You’ve been documenting this shift within businesses around the world. What has your experience been?

Charles: We started after the financial crisis in 2012. The presenting issue at that time was the breakdown of trust between business and society. For Blueprint, we were lucky that we had an eclectic group of business leaders, academics, NGOs, civil servants who we were able to collaborate with to ask ‘what is going wrong?’. 

The market never exists in a pure state – it’s always a social and cultural construct. Business leaders don’t normally think about the ideas that shape what they do. The last 40 years have been dominated by two ideas: first, Milton Friedman’s idea that the purpose of business is to maximise profits for shareholders. And the second, the narrow view of what it means to be human: that people are atomized individuals motivated by money, status, and power. When you put those two ideas together, you get the world we live in. There’s a disconnect between business and society.

If all you care about is making money, then you externalise a whole bunch of things, whether social or environmental, because they’re not your problem. People are not solely motivated by money, status and power. Of course these things are important to an extent, but all the research shows that there are three things that are very important for most humans. One is the desire for meaning. The second is that we’re naturally relational and therefore find fulfilment in environments where we are cared for and we feel we belong. And the third is that we want to grow and develop our autonomy and mastery through the course of our work.

“The market never exists in a pure state – it’s always a social and cultural construct.”

Charles Wookey

We envisioned a world where business thought about its purpose differently and aimed to benefit society through producing goods that are good and services that serve. A better world arising from the business of success, where businesses think differently about people and assume people to have these three other motivations as well as self-interest. If you have both of these things, our hypothesis was, would you get a better business for the reasons that Christa was just saying? Would you get a better society because the business is orientated for that? And happier people because they will feel that they’re valued in an organisation doing something that they genuinely believe in? 

We wrote that down on two sides of paper, which took a year to write. Since then, as a charity we have worked with large organisations in a non-commercial way. We weren’t asking for consulting fees – our aim was to try to get them curious about the potential development of their organisations. Over the last 10 years, I found that the starting question from the business leaders was often ‘what’s the business case?’. But after a few years, that question shifted to genuine curiosity about the unrealized potential of the business.

That’s a much better starting point because if you just focus on the business case, all you end up doing is reinforcing the current status quo, which is that the real purpose is to maximise profit. The real challenge of the purpose debate is to identify how fundamentally different a purpose-led business is. Because its fundamental objective changes from creating value for shareholders short or long-term, to creating value for society of which financial return to shareholders is only one part.

Adam: The word ‘purpose’ gets misunderstood and misused all over the place. To us, it’s a marriage of what’s happening inside with what’s happening outside – do you agree? 

Charles: Yes, I think that’s right. I think we have to accept that the world of business goes through these cycles where new words and ideas come along. There are some people who are genuinely inspired by them, but there are a lot of other people who adopt the language without changing anything else. But I think that businesses that are genuinely embracing a way of thinking are seeing the benefits of it. It’s not automatic, but the reason for doing it is that you’ll have a much better chance, while also creating and contributing to a better society that addresses the huge systemic risks that we’re all facing.

Adam: It sounds like you’re drawing on the work of Alex Edmans, who I know you’ve worked with in the past. 

Charles: Yes, we’ve worked a lot with Alex. When I meet sceptical CFOs of big companies who want hard evidence, I point them straight to Alex’s book. It’s convinced a lot of people because of his rigorous approach and the evidence base that he’s able to draw on. But in the end, this isn’t a technocratic argument. It’s actually a mindset change and you can’t persuade people to have a mindset change because of the data. The truly excellent consultants that are working with companies will provide disruptive experiences that often spark the emotional connection that comes from seeing the world differently.

Adam: I’m going to open it up to all of us to have a discussion now before moving to some audience questions. Roman Krznaric, who wrote The Good Ancestor, posits that if the 21st Century’s birth rate remains constant, the people who are yet to be born far outweigh the totality of every human who has existed so far. Krznaric also explains the concept of our ‘acorn brain’ – the parts of our brain that are capable of planning ahead and squirrelling away that acorn for when we need it. But even then, 80% of our thoughts relating to the future refer to the same or next day, 14% of our thoughts concern the year ahead, and only 6% of our thoughts look more than 10 years ahead.

Adam: So the question becomes, how easy is it for us to think long term? 

Charles: I think there is something about the quality of awareness that we can each inhabit through becoming more conscious of future impacts. I’m reading What We Owe The Future by William McCaskill, which makes a lot of the same points about the future of humanity and our need to do this. What strikes me is the moral case for recognizing the value of people not yet born. There’s an awareness raising that goes there, and just having in mind that there will be a long-term future is part of that. 

I think that it can also be freeing. It is saying that everything we do, we need to do with a degree of deliberation and awareness of what the long-term consequences are. I think we have an obligation to work out what they are. To what extent our brains are cut out for that is almost a separate thing – if we’re deliberate about it and choose to spend time reflecting on what those issues are, I think that is a very human thing. 

“What strikes me is the moral case for recognizing the value of people not yet born.”

Charles Wookey

Adam: Sophie, what are your thoughts on this? 

Sophie: There are some interesting neurological studies which looked at the pattern of brain activity when people were asked to think about a stranger. Then, they were asked to think about their future self. The brain patterns for both of those things were the same – our future self is thought of in the same way as a stranger. So I suppose what that’s saying is our brains are hardwired to ignore the future. That’s where it becomes so critical that we are baking requirements for us to look at the future into our systems. 

We’re not geared up to think about the future and our systems are completely short-term as well: short-term budget cycle, short-term performance measures. We’re monitored and assessed on what we’ve delivered within this year, not how we’ve considered the future. When we’re talking about the business case for purpose, there is no profit on a dead planet. You can be attracted by profit, but that’s a risky strategy if that’s all you’re focusing on. Having mandatory requirements to shift our thinking is key. 

My job as an independent commissioner was to go in and look whether departments were following the framework, call them out if they hadn’t and provide support to give them the tools and capacity to do that. Wherever I go in the world, people say, my God, why haven’t we all got a Future Generations Act? It’s a complete no-brainer.

“You can be attracted by profit, but that’s a risky strategy if that’s all you’re focusing on. Having mandatory requirements to shift our thinking is key.”

Charles Wookey

Adam: Christa, I want to come to you because obviously you work with a lot of leaders. There’s always a mix of different forces that cause business leaders to think in the short-term.

Adam: How easy is it to convince them of a long-term strategy?

Christa: I do think that the short-term pressures are certainly there, but business leaders are also very used to looking at risk, and risk is typically long-term. Any good business person is looking towards innovation in future markets and looking at positioning from that perspective. From a very pragmatic perspective, leaders have to be somewhat future-focused. There’s also the role of policy – we’ve seen a lot of policy coming into place for businesses around sustainability. That’s really lowered the bar in terms of a CEO’s ability to think about sustainability because they’re putting it in the risk bucket now – risk of fines, risk of different expenses and so on. There was a headline a couple of months ago that said 94% of CEOs from big companies are worried about losing their jobs. There is an existential crisis for their actual roles. 

There is also so much pressure to move in this direction from a consumer perspective. Consumers are so busy – we’ve got kids, we’ve got jobs, we’ve got lots of things. Business has a really important role to play in making it easy for people not to have to think about it, but making it easy for them to do the right thing. It’s about creating market-based solutions to public problems without causing more problems. Consumers need and want to buy things. They also don’t want to do more harm than good. Businesses that can help them to do that are positioned really well.

At LOP, we have our biannual co-study. We identify 15 to 20 leaders and businesses that are at the forefront. And there are so many businesses that are doing it really well. We’re just in the process now of going through all the numbers and picking our next group of CEOs to participate in this year’s study. 

“It’s about creating market-based solutions to public problems without causing more problems.”

Christa Gyori

Charles: I’m quite struck by the idea that once you become a CEO of a very large company, you’ve ‘made it’. But then the question becomes about legacy: ‘what do I now want to leave behind’?

Someone told me a story about how he called his predecessor to thank them for a decision they’d made eight years ago, which had only just then materialised. That’s what good leadership is: making long-term, thoughtful decisions that you might not personally see the benefit of. 

The other factor which I’ve been quite struck by is the number of people who reference their own children as having a big influence on them. That’s the newest proxy because they are the next generation and they’re often quite noisy. For those who are at school or university and it’s known that their parents are big cheeses in large companies, they often have very strong views about what they think their parents are – or should be – doing. The pace of change in society is such that this is becoming much more urgent.

Adam: I want to draw from the work of Richard Layard who wrote a book called Can We Be Happier? He boils it down to one thing: our governments should be there to enable all of us to live happier lives. We’re coming to understand that thinking beyond ourselves and finding meaning leads to happiness. We can’t just aim at happiness – there is a meaning aspect too.

Charles: Absolutely. One of the people who influenced us is Victor Frankl, who wrote Man’s Search for Meaning. One of his phrases that actually comes from Nietzsche is: ‘he who has a why to live can cope with almost any how’. There’s something about the human predicament that causes us to be in search of meaning. 

John Kay talks about the paradox that we achieve things by aiming for something else in his book Obliquity. If you want to run a profitable business, don’t aim for running a profitable business; aim at doing something brilliantly that people want or need and you probably will make money. If you wanna be happy, aim at something that’s meaningful for you and engages other people and you probably will find fulfilment in doing that. It’s a freeing thought because I think the happiness discourse can become very self-referential when the trick is to de-centre. 

“The happiness discourse can become very self-referential when the trick is to de-centre.”

Charles Wookey

Adam: Sophie, you must really see in government the need to balance immediate concerns and needs of society – whether it’s jobs, education – with long-term thinking. How do those not become diametrically opposed?

Sophie: It can be challenging and people don’t always like it when politicians make brave decisions. As a result of our campaign to invest in public transport rather than build new roads in Newport, the transport minister has been taking the heat on a regular basis. But there are many scenarios in which meeting the needs of current generations and future generations are not mutually exclusive. 

Using the example of the cost of living crisis, if we invested in improving the quality of people’s homes, particularly around energy efficiency, in the short term we would be taking thousands of people from the current generation out of fuel poverty. We would be creating tens of thousands new jobs in order to put these energy efficiency measures in place. We would also be keeping people, particularly older people, out of our hospital in the winter months. In the long term, good quality jobs have a direct correlation to our long term health. We’d be meeting our climate targets and we’d be regenerating those communities for the long term. 

“You should choose to do the things that are good for both current and future generations… you need a system that encourages people to do that.”

Sophie Howe

So what we’re trying to say is that you should choose to do the things that are good for both current and future generations and make a contribution across – in our case – seven wellbeing goals. You need a system that encourages people to do that.

Transport is a large contributor to carbon emissions – 17% of our total emissions in the UK derives from transport. So, if your sole purpose is to decarbonise the transportation system, then mass investment in electric vehicle infrastructure would probably be sensible, grants and investment in rolling out the infrastructure and so on. However, if your goal is not just to decarbonise the transportation system, but also to improve individuals’ health in the long term, to build connected communities and address inequality, then electric vehicles isn’t the answer at all. We would still be sitting in congestion, adding to the obesity crisis in our electric cars rather than our petrol cars. 

So when you start applying that lens – are we trying to achieve holistic long-term wellbeing for people or are we just trying to achieve this one sided thing – you get completely different solutions. And that’s the power of having that framework.

Adam: We’re going to open it to audience questions. What do you think is the cause of the disconnect between profit, money, capital and the reality of actual natural resources available? How can we reconnect them? 

Sophie: You might have seen in the news yesterday that scientists are now saying that there’s a 66% chance that we are going to hit 1.5 degrees of warming between now and 2027. In the UK we’re currently using around 2.5 times our share of the world’s resources. We have a complete obsession around limitless growth. That is going to have to be kept in check very soon if we’re going to start shifting towards this so-called decade of delivery to stop us tipping over to 2 degrees.

We cannot continue to grow in the same way and also have a planet to survive on. We need to find those purpose-driven leaders who are going to shake up the systems. I’m really encouraged by the number of young leaders that are coming forward. There’s not just going to be one Greta Thunberg in organisations of the future; there will be thousands. They will be calling out senior leaders and they won’t be choosing to work with companies that are not working to protect the planet. 

Adam: Have we given business too much power, and regulatory policies and governments not enough?

Charles: I think it is partly regulation but I don’t think it is the sole answer. Given the weakness of government and the relative strength of businesses, I think we live in a world where responsible businesses should be socially active in areas that relate to their business in trying to promote a better society through what they do. This needs to happen alongside more stringent and far-reaching regulations. 

Coming back to the question around natural resources – we’ve been living with this idea that businesses simply exist to maximise profit. They’ve not had to account for the natural resources they use. We need much better ways of measuring and understanding the environmental and social impact of what companies do. There’s lots of really excellent work being done to try and change the accounting systems so that we’re able to more effectively adjust profit for the externalities. Fundamentally it’s all about what people are trying to achieve and what their mindset is as business leaders. 

“I think we live in a world where responsible businesses should be socially active in areas that relate to their business in trying to promote a better society through what they do.”

Charles Wookey

Christa: There’s a lot of legacy infrastructure that needs to change. It’s not going to happen overnight – that’s not an excuse, it’s just a recognition. We are starting to see different ways of accounting environmental factors: biodiversity credits, asset classes around the ocean. We are starting to see the financial markets grapple with: how do we value nature? It’s not perfect, but we’re starting to see a lot more work in that area. Take COP – two COP summits ago was the very first time we saw the capital market show up. It used to just be government, then some business. Then last year we saw government, business and capital markets: the system is in the room now. Everybody has a role to play. 

Adam: We’re coming up to the end of our time today, even though we could carry on talking about this for hours. It’s such a fascinating topic. But I’m going to finish with a comment from a viewer: “It makes my heart warm as a father and a businessman and a human to see minds as fine as yours engaged in these most important questions.” Thank you all so much for joining us. It’s been a real pleasure.