The Future Quotient50 Stars in SeriouslyLong-Term Innovation           Beta   Alpha                           Delta       ...
Contents                                             An FQ GlossaryForewords                                            Cu...
Foreword                                                                                                 1Volans and JWTAn...
Foreword                                            ForewordAtkins                                              The Dow Ch...
Foreword                                           Foreword                                            3Shell Foundation  ...
Executive Summary2011 proved to be a pivotal year, as indicated      In the same way we currently measure the IQin Figure ...
Panel 1                                                                                                                   ...
IntroductionThe ChasmThe global sustainability movement is 25           Leadership in crisisyears old, with 2012 marking a...
7We need a tool—or tools—that can help               We researched, scanned, interviewed andus measure what we’re calling ...
Chapter 1                                                                                              033What Tomorrow Wa...
9If you ask a CEO—or similar—to sketch their        As Volans argued in an earlier report:business universe on a flipchart...
Chapter 1What Tomorrow WantsWorse, our ability to make long-term                Panel 2investments seems to be weakening, ...
11Figure 1.1Who is getting better at thinking—and acting—long term?                                     50 Long-Term      ...
Chapter 1What Tomorrow WantsPanel 3Cultural dimensions of long-termismThe degree to which we engage with long-            ...
13Discounting tomorrow                                 One key question: “Whether the timescales                          ...
Chapter 1What Tomorrow Wants2012 offers an important opportunity to look to     Even the best-intentioned leaders can hit ...
15Figure 1.3From Mindsets to Paradigms1                            2Mindsets                     BehavioursIndividual Thou...
Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long                                                  180Civiliz...
17Broadly stated, the first 50 years of                   If fission is the status quo, what would needenvironmentalism sa...
Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play LongPanel 45 Dimensions of high-FQ leadershipDimension          ...
193	                              4	                               5	Analysis                        Ambition             ...
Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long                                                  At the sam...
212	   Research & Development (R&D)                    4	   Higher EducationThis is an immense, crucial part of the global...
Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long6	   Venture Capital                               8	   Pens...
2310	Forestry                                          12	GovernmentDepending on whether it grows softwoods            The...
Chapter 350 Stars in SeriouslyLong-Term InnovationAt times it seems that everyone wants to be astar, but few are prepared ...
25“We are on a journey,” CEOs like to say as        Clearly, the best leadership decisions playthey sign up to the sustain...
Chapter 350 Stars in SeriouslyLong-Term InnovationPanel 57Cs of High FQ LeadershipCharacteristics +       FQ50 example    ...
27Characteristics +        FQ50 example            Descriptionkeywords used byrespondents to theFQ survey4 Courageous     ...
Chapter 350 Stars in SeriouslyLong-Term Innovation                                          She has continued to lead long...
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
The Future Quotient: 50 Stars in Seriously Long Term Innovation
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The Future Quotient: 50 Stars in Seriously Long Term Innovation


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The Future Quotient: 50 Stars in Seriously Long Term Innovation

  1. 1. The Future Quotient50 Stars in SeriouslyLong-Term Innovation Beta Alpha Delta Epsilon Gamma ZetaVOL ANS
  2. 2. Contents An FQ GlossaryForewords Culture The ingrained behaviors and beliefs characteristic of a particular social, ethnicVolans and JWT 1 or age group, sometimes described as, “what people do when no one else is lookingAtkins 2 over their shoulder.” The emerging focus of sustainability, as the context for behavioralThe Dow Chemical Company 2 change.Shell Foundation 3 Future Quotient (FQ) A measure of the future-readiness—of individuals, teams,MindTime Technologies Inc. 3 agencies, businesses, brands and beyond—to positively cope with and overcome the various complexities as a result of foreseeable andExecutive Summary 4 unforeseeable future changes in the economy, society and the environment.Introduction 6 Intergenerational 1 Being or occurringThe Chasm between generations. 2 A time period extending beyond one human generation.Chapters Average human generation is between 29 years (for women) and 33 years (for men).1 What Tomorrow Wants 8 Long-Term In The Future Quotient, considered2 The S-t-r-e-t-c-h Agenda and 16 as stretching out along intergenerational time- 12 Sectors that Play Long scales, i.e. beyond the 30-year time-horizon.3 50 Stars in Seriously 24 Paradigm The underlying assumptions and Long-Term Innovation rules shaping current ways of thinking, framing and doing science. Paradigm shifts have been4 Are You Ready to Star? 32 triggered by people like Copernicus, Galileo, Einstein and, we argue, James Lovelock.5 Expand Your FQ: 36 A Playbook to Get Started Seriously 1 In a serious manner. 2 To an alarmingly grave extent. 3 With genuine,6 The Quotient’s Future 42 earnest intent; sincerely. System Change A transformation in the wayAppendices our economic and political systems, or our cultures, operate. Necessary condition of—andA Survey Process and Results 45 likely consequence of—a paradigm shift.B References 48 Transformational Disruptive change. Transformations can be scientific,C Publication Details 52 technological, economic, cultural or civilizational. They can be advanced byD Acknowledgements 52 incremental change, but true transformational change is disruptive in nature.E Other Publications IBCF Addendum IBCOur front cover image shows the constellationof Volans superimposed on a random field of 50stars. Stars help with navigation and symbolisehumanity’s intense interest in knowing the future.Sadly there is no JWT constellation.
  3. 3. Foreword 1Volans and JWTAn old order is coming apart, a new one— Over time, we will see a shift in understandingfor better or worse—self-assembling. Volans about the requirements for a ‘going concern’,spotlighted this trend in 2009 in the report, as required by Generally Accepted AccountingThe Phoenix Economy.1 It was noted in that Principles (GAAP), with new methods neededreport that a crisis is a terrible thing to waste, for asset capitalization, depreciation, andbut as Volans and JWT drafted The Future amortization. Currently, a going concernQuotient it was clear that the opportunity had is considered to be likely to exist into thelargely been squandered. distant future—which may prove an optimistic assumption when the forces of creative2011 so far: the Japanese tsunami and destruction are breaking loose—and whenFukushima meltdowns sideswipe the global natural resource and environmental securitynuclear industry and mainstream low-carbon challenges are pressing plans; America’s debt rating wasdowngraded; Greece has teetered on the So do we trust to luck and allow a newedge of default, with European political leaders economy to emerge wherever it chooses to doscrambling to shore up other countries, so, or do we seize the opportunity to createindeed the entire Euro system. The UK has and shape the new order?seen astonishing levels of violence in London,our home city, and elsewhere. Even normally Volans and JWT choose the second option.peaceful Norway has been shaken to the core Now, more than ever, it is time for businessesby an outbreak of anti-Islamicism that left and their brands, governments and civil societyscores of people dead. organizations to test and build their capacity to meet the needs of both present and futureThe central argument in The Phoenix Economy generations.was that we were seeing not simply a greatrecession but the beginning of an era of We are profoundly grateful to our sponsors:creative destruction. History tells us that Atkins, The Dow Chemical Company and Shellwhen these periods happen, those who are ill Foundation. These and other debts of gratitudeprepared and unwilling to reinvent themselves are identified in our Acknowledgements ongo to the wall. Eventually, of course, capitalism page 52. Our sponsors have given us a freewill mutate and evolve, but not uniformly rein on this project, so any failings should notaround the globe. be laid at their door—while our ability to get as far as we have has everything to do with their generous support. We would very much welcome any comments you may have on what follows. E-mail addresses are provided at the end of the report on page 44.John Elkington Charmian Love Alastair MortonCo-Founder & Chief Executive, Head of Ethos,Executive Chairman, Volans JWT LondonVolans
  4. 4. Foreword ForewordAtkins The Dow Chemical CompanyProject Sponsor Project SponsorThe concept of the Future Quotient is central to Old ways versus new ways. It’s a conflict thatthe long-term value and sustainability of Atkins’ Dow recently addressed with unprecedentedbusiness. The ability to look forward and see self-scrutiny and transformation. In many ways,through the ambiguity and uncertainty that the we are a case study for the paths forward thatfuture presents is vital if we are to continue are presented in The Future create value for our clients. As one of theworld’s largest infrastructure consultancies, we A journey of the magnitude we as humansare comfortable dealing with the long-term, face, in order to save ourselves, requiresplanning, designing and enabling of our clients’ immense, yet fundamental changes. Theinfrastructure projects and capital programmes, current world order, or disorder, is based onthe design lives of which may extend over entrenched and dysfunctional systems—many tens of years. To remain at the forefront it with no one person, one company, or oneis crucial that we challenge ourselves to better government at the controls.understand the implications of complex long-term change on everything we do. Managing our destiny requires a clear and common vision of the future. Then we eachWe are investing in the challenge of future have to drive the necessary changes thatthinking through the creation of our futures will get us to our shared destination. As Dowteam, where we are harnessing the deep skills contemplates its third set of Sustainabilityfrom right across the business to understand Goals, we have opened the dialogue on whatthe challenges that climate change, resource our role in the world should be on our 200thscarcity and carbon reduction present to birthday, the year 2097.the long-term resilience of infrastructure andclimate compatible development. As we move What is our relationship with the planet?forward on this journey this report raises How do our technologies and our peopleimportant questions for us all to debate: How contribute? Where do we invest today—indo we create the right environment, habits and R&D, in manufacturing, in human capital—tobehaviours for our people to think long-term? have the best chance at shared prosperity?Have we the right balance of thinkers in ourorganisation and are we being bold enough in The bets we all place these days are becomingour thinking? And, crucially, can we improve bigger and longer term. Every decision eachhow we communicate about futures to strongly of us makes has an impact on our collectiveresonate with our colleagues and clients? journey. The Future Quotient provides the impetus and framework for getting anyThe clarity by which we communicate future business—and every business—on board.drivers of change will impact on how quicklyand strongly they are adopted. We are pleasedto be an early part of the Future Quotientjourney and look forward to being contributingto the ongoing debate that will hopefully movemany of us towards the example set by thereport’s “Top 50”.Elspeth Finch Nick Roberts Neil HawkinsDirector, UK Managing Director, UK VP, Sustainability and EH&SAtkins Atkins The Dow Chemical Company
  5. 5. Foreword Foreword 3Shell Foundation MindTime Technologies Inc.Project Sponsor Project PartnerIn an increasingly unpredictable and volatile Plato implored us to “Know thyself.” Einsteinworld, developing a strategy to manage the insisted: “We cannot solve our problems withfuture is not easy. When Shell Foundation the same level of thinking that created them.reviewed its strategy in 2010 after one decade We must see the world anew.”of operations, we concluded that our successwas in large part due to the fact that we didn’t We are in the midst of a huge explosion in ourreally have one. understanding of human consciousness and thinking. It is time for us to use these advancesWhen we first started out, we took the to better understand the minds that we areview that in order to create a successful trying to manage towards radical change,new model for corporate philanthropy that including our own.was catalytic and could drive a whole newapproach to international development, we The Future Quotient, both as an idea and ashad to experiment. A preconceived strategy a business concept, challenges us to rethinkthat dictated our course would have got in the everything about the way we manage forwardway. Instead, our strategy evolved from our from today. It reminds us in no uncertainoperations and from our failures. However, as terms that the consequences of failure arewe re-crafted our model in line with what we unacceptable.learned, so we began to see a business modelemerging that we could articulate. Only then To achieve a high Future Quotient, akin to beingdid we feel that we could develop a strategy well embarked on the road to sustainability,that would help us navigate the future. requires organizations that span the world to intelligently go about rethinking their ways.Sometimes when you’re trying to drive change Significantly, however, this rethinking can noyou need to let circumstance and empiricism longer be done from a central place. The worldguide you rather than preconceived constructs is far too complex. Rather, it requires a deepthat might limit your risk appetite and divert commitment and investment in raising the levelyour focus. This is why we agreed to support of individual and organizational awareness ofVolans and JWT with their Future Quotient thinking at work.research initiative. We believe that the abilityto navigate the future effectively depends on Ultimately, what we do starts with how wehaving an open mind, a willingness to learn think. To re-think our ways we must firstfrom—and admit to—mistakes and a healthy understand how we think, individually andappetite to go where others fear to tread. collectively.We’re delighted with the outcome and hopethat the recommendations can be applied justas much to the philanthropic sector, corporatephilanthropy and corporate social investmentas they can to corporations and individuals.Chris West Clare Woodcraft John FureyDirector, Deputy Director, UK CEO,Shell Foundation Shell Foundation MindTime Technologies Inc.
  6. 6. Executive Summary2011 proved to be a pivotal year, as indicated In the same way we currently measure the IQin Figure 0.1 below. 2012, thanks to a number or EQ of individuals, Volans and JWT believeof sustainability milestones,2 will see the that we need to investigate FQ as a measureworld debating progress to date in terms of of the future-readiness of individuals, teams,sustainable development, a concept whose agencies, businesses, brands and beyond.mainstreaming began a quarter century agoin 1987. We explore why such a measure is needed as we establish the imperative for longer-Around the time of the 2012 UN Summit on term thinking and action (Chapter 1). WeSustainable Development in Rio de Janeiro, look at how leadership must stretch if it is towe will be bombarded with reports and case embrace this imperative (Chapter 2) and westudies suggesting significant advances. The outline the key dimensions that any FQ testuncomfortable truth, however, is that much of must capture in order to be a true measurewhat currently passes for sustainability strategy of future-readiness. We highlight 50 ‘guidingin business is little more than corporate stars’ of seriously long-term innovation—citizenship—and more or less completely individuals, organizations and economies thatignores the pivotal concept in the sustainability our team and wider network judged to beagenda: the interests and needs of future likely to show significantly higher-than-averagegenerations. Future Quotients (Chapter 3). We offer a way to explore your team’s style of thinking usingThe Future Quotient, co-authored by Volans MindTime’s methodology (Chapter 4), as aand JWT, is our take on the emerging first step towards assessing Future Quotient.agenda. It is a pitch for the introduction of a And in Chapter 5 we spotlight a range of toolsnew concept—the Future Quotient, or FQ— as building blocks for an eventual Playbook,designed to measure the ability to think and aimed at helping individuals and organizationsact along intergenerational timescales. to expand their Future Quotient.Figure 0.1Waves of Societal Pressure Israel-PLO peace treaty Nelson Mandela free Oklahoma City bombing Martin Luther King assassinated ‘Our Common Future’ Good Friday agreement Lockerbie disaster Greenham Common protests USSR breaks up UN Earth Summit Munich Olympics terrorism Rwandan genocide US troop deployment in Vietnam Martin Luther King ‘I have a dream’ Berlin Wall falls ‘Mad Cow’ disease Vietnam boat people exodus Chernobyl disaster Ozone depletion warnings US invasion of Grenada Mao’s ‘Cultural Revolution’ Greenpeace founded Three Mile Island disaster Man lands on Moon Kyoto Protocol LiveAid concerts Rachel Carson ‘Silent Spring’ Amoco Cadiz disaster Amnesty International founded Solidarity movement Watergate scandal Y2K scare US Clean Air Act Bhopal disaster First AIDS cases Chairman Mao dies North Sea Oil flows Mandela imprisoned Biafra crisis JFK ‘New Frontier’1970 Environmental Wave1990 Green Wave19601980
  7. 7. Panel 1 5IQ, DQ, EQ and Eco-QOver the past century, a number of measures An IQ score is more or less set for life, althoughhave emerged that aim to capture the average IQ scores have been rising at aroundcapabilities of individuals. We already have the three points per decade since the early part ofIntelligence Quotient (IQ) and, thanks to Daniel the last century. By contrast, those measuringGoleman, we also now have the Emotional EQ or Eco-Q tend to assume that scores canQuotient (EQ) and Ecological Quotient (Eco-Q). improve with awareness and training. TheIQ testing has become central to education design and innovation company IDEO hasand human resources management. The first also proposed a Design Quotient (DQ) to tracklarge-scale mental tests were used in China users’ contributions to the firm’s OpenIDEOduring the Sui Dynasty in 605 as part of the website, which is also improvable with diligententry exams for the imperial civil service, with effort.the IQ approach getting a big boost duringWWI with the need to evaluate and assignrecruits. There are now many different formsof IQ assessment, but the central idea is thatan IQ score is an effective predictor of anindividual’s capabilities. @FutureQuo 2011 a year of transition Will it lead to Breakdown? Distraction? Or Breakthrough? #FutureQuo Breakthrough President Obama Live Earth events Haiti earthquake GRI G3 guidelines Indian Ocean tsunami Hurricane Katrina CSR on WEF agendaJohannesburg Summit COP15 Invasion of Iraq 9/11 terrorism Progress Distraction Arab Spring Japanese tsunami Fukushima disaster Osama Bin Laden killed Breakdown Murdoch trial2000 Anti-globalisation Wave US heatwave Norway killings 2010 Sustainability Wave US credit downgrade UK riots 2020 2030
  8. 8. IntroductionThe ChasmThe global sustainability movement is 25 Leadership in crisisyears old, with 2012 marking a number ofmilestones—among them: 40 years from the It is in the very nature of things that aLimits to Growth study,3 25 years from the proportion of leaders will fail, but when the rateBrundtland report 4 and 20 years from the first of failure increases dramatically, the chancesEarth Summit in Rio de Janeiro.5 But has real are that system failure is at the heart of theprogress been made—and how well positioned problem. The current generation of leadersare we to make progress tomorrow? have fought their way to the top of the pile in a system whose rules they understood, indeedOn the upside, corporate commitments helped to define and sustainability-focused initiatives actuallyincreased during the first phase of the global As a new order begins to emerge, theirdownturn, with almost 60% of companies in instincts, reflexes and well-honed solutionsa recent survey saying their investments in increasingly fail to address the increasinglyrelated areas increased in 2010.6 complex challenges. The question is: do our leaders have the skills and ability to adapt toOn the downside, a key element of the the new order?Brundtland agenda was the issue of long-term and intergenerational timescales and As the financial and ecological systems weakenequity—and here we are failing, badly. With and stresses build, human nature dictates thatvery few exceptions, leaders, decision-makers we try to do more of what worked in the past.and policy-makers are not yet thinking and We focus even more on the conventionallyacting for the longer term. Indeed, stressed by defined bottom line. Stuck in a hole, wethe protracted downturn, too often they are continue to dig, despite clear signals thathunkering down, lowering their ambitions, and radical change is needed. Eventually, naturalshrinking their timescales. selection will sort winners from losers, but will the winners be any better at addressing theWe seem to be at a make or break point, core elements of the sustainability agenda?teetering on the edge of the sort of chasm Will they be more adept in considering theillustrated in Figure 0.1. The failure of 2009’s long-term resilience of their organizations?Copenhagen COP15 climate summit and In what follows, we sketch out a means oflater meetings suggests caution in terms of measuring the future-readiness of leaders—expectations about the outcomes of current and offer a short survey of some of the toolsglobal governance processes. For the used by our FQ50 finalists and others.sustainability agenda to cross over into themainstream population without serious dilution, While measures such as IQ, EQ and Eco-Qnew forms of leadership are urgently required— (Panel 1) can contribute to evaluations of theaspects of which are demonstrated by our capacity of an individual, team or organization50 Stars in Chapter 3. to make sense of, manage and even improve the future, none is designed to provide an overall assessment of future-readiness, let alone the ability to address the needs of future generations.@FutureQuo 81% of CEOs say they’veembedded sustainability (Accenture survey).But only 29 publicly traded US companies haveCSOs (Weinreb) #FutureQuo
  9. 9. 7We need a tool—or tools—that can help We researched, scanned, interviewed andus measure what we’re calling our Future conducted a part-quantitative, part-qualitativeQuotient. A high Future Quotient can help survey surrounding the issue of long-termindividuals or groups identify new risks thinking and acting (Appendix A, pages 45–47).ahead of the pack, and play more effectively This was emailed to several thousand membersinto emerging areas of opportunity. As the of the Volans and JWT networks, resulting in 500Canadians say in ice hockey, it can help players fully completed replies from thought-leaders andskate to where the puck is going to be— practitioners worldwide.rather than where it is. Drawing on this collective wisdom, and working closely with MindTime, who we discoveredThe Future Quotient project along the way, we began the development of a beta version of our methodology to measureThe project began as a response to evidence your own FQ (Chapter 4). Building on thethat CEOs, and C-suites generally, were recommendations of our respondents, weconcluding that they had already embedded compiled a listing of ‘50 Stars in Seriouslysustainability.7 Ahead of the 2012 sustainability Long-Term Innovation’ which we term as themilestone events, we felt that some sort of FQ50 (Chapter 3) as well as an FQ Playbook tocounterblast was needed. The FQ idea evolved help individuals and organizations stretch theiralong the way—as a means of testing those FQ (Chapter 5).C-suite assumptions.Figure 0.2 Source: Geoffrey Moore, Crossing the Chasm:Make or break 8 Marketing and Selling Technology Products toAdoption Lifecycle Mainstream Customers, Capstone, 1998.Innovators + Early adopters + Early majority Late majority Laggards +enthusiasts visionaries pragmatists conservatives skeptics The Chasm Time
  10. 10. Chapter 1 033What Tomorrow Wants 032 043 009 026 010 033034 046 025 017 028 046 010 011 024 049 003 029 022 030 002 037 004 012 001 027 047 014 041 013 015 050 020 006 016042 018 006 039 031 025 045 007 038 035 016 044It’s time to get a better fix on what the futurewants from us today. Our visual refers to themapping of stars. In this section we look at 048who’s good (and bad) at long-term thinking. 021
  11. 11. 9If you ask a CEO—or similar—to sketch their As Volans argued in an earlier report:business universe on a flipchart or whiteboard, “Properly understood, sustainability is notwhich we have, you quickly notice something the same as corporate social responsibilitystriking about the diagram they produce. (CSR)—nor can it be reduced to achieving anTypically, they place their organization at the acceptable balance across economic, socialvery centre of the mapped universe. This and environmental bottom lines. Instead, it isshould come as no surprise: this is their world, about the fundamental, intergenerational taskand their perceived centrality powerfully shapes of winding down the dysfunctional economictheir worldview. and business models of the nineteenth and twentieth centuries, and the evolution ofThis simple fact has huge implications for the new ones fit for a human population headedcapacity of CEOs and other members of the towards nine billion people, living on aglobal C-suite to improve their Future Quotient small planet which is already in ‘ecologicaland effectively engage the sustainability overshoot’.” 11agenda. It means that business leaders areoften in the same position as cosmologists pre- The key word here is intergenerational. VeryGalileo, seeing the agenda in corporate terms, few businesses operate on anything like arather than in wider societal or biosphere- generational timescale, though in Chapter 2 wecentric terms. spotlight a sample of those that come closer than most to operating on such timescales.And it shows in survey data. In 2010, forexample, the UN Global Compact and As several CEOs told us during the course ofAccenture reported the results of a global this project, recessionary pressures and widersurvey of 766 CEOs—in which 93% said that uncertainties in the system have encouragedthey saw sustainability as an important part of short-termism to proliferate, with even pensionthe business landscape and 88% knew that funds becoming increasingly myopic in theirthey now had to drive related requirements investing.through their supply chains.9 The real jolt,however, came when 81% said that they had Andrew Haldane of the Bank of Englandalready “embedded” sustainability. Whatever has tried to quantify short-termism. “Ourthey may have embedded, the chances are evidence suggests short-termism is boththat it does not address the need for system statistically and economically significantchange. This is backed up by a recent study in capital markets,” he and his colleague,by Weinreb Group which found that only 29 Richard Davies report.12 They underscore thepublicly listed US companies have a Chief impact of the fact that “information is streamedSustainability Officer (CSO) and they, on in ever greater volumes and at ever risingaverage, only have 4.2 direct reports on their velocities. Timelines for decision-making,” theyteam.10 say, “appear to have been compressed.”Many companies now have a cycle of annual More significantly still, they conclude: “Thesenon-financial reports; they may now engage a forces may be altering not just the way we act,wider range of external stakeholders than they but also the way we think. Neurologically, ouronce did; and they may be one of the few who brains are adapting by shortening attentionhave appointed a Chief Sustainability Officer. spans,” they conclude. “Like a transistor radio,But some may be surprised to discover the our brains may be permanently retuning todegree to which they have failed to understand a shorter wave-length.” This is a theme alsothe fundamentals of the sustainability agenda explored in books like The Shallows.13they have signed up to—which is now set tobecome the operating code of twenty-first In the US and UK, cash-flows five years aheadcentury markets. are now discounted at rates more appropriate to eight or more years into the future. Haldane and Davies tell us, “10-year ahead cash-flows are valued as if 16 or more years ahead and cash-flows more than 30 years ahead are scarcely valued at all. The long is short.”14
  12. 12. Chapter 1What Tomorrow WantsWorse, our ability to make long-term Panel 2investments seems to be weakening, at least Who’s good—and bad—according to the World Economic Forum at long-term thinking?(WEF). It concluded that in 2009, long-terminstitutional asset holders held slightly under In our first Future Quotient survey (seehalf of the world’s professionally managed Appendix A) we asked: ‘In general, do youassets—some US$27 trillion out of US$65 think that the capacity to think with long-termtrillion.15 Haldane and Davies conclude that: horizons in mind is getting better or worse?’“Public policy intervention might be needed to for each of four actors: individuals, businesses,correct this capital market myopia.” 16 investors and governments. We asked the same question to track their capacity to actAs global population pressures build and with long-term horizons in mind.emerging economies find themselves lockedinto resource-intensive economic models, For each actor, we calculated an indexthere are growing grounds for concern that the representing the net belief that they arepace of climate change and of other pressures improving in these capabilities. For instance,on the biosphere will outrun our capacity the positive index along the horizontal axisto innovate, at least at the scale that will be for businesses means that more of ournecessary. respondents see businesses as getting better at thinking for the long-term than thinkAs the Stern Review on the economics of they are getting worse.climate change argued, climate change looksset to become the biggest market failure in Strikingly, no actor has a positive index on theour collective history.17 Meanwhile, the risk vertical axis, meaning that, in total, respondentsof intergenerational tensions, in the sense of see a decreasing ability to act with long-termtensions between current generations, grows horizons in mind. One point to highlight is thatby the day. There are significant concerns despite governments being scored so poorly,about the future of public health care provision, we believe that some of them do indeed thinkpensions and climate change, to name just a and act with long-term horizons in mind.few increasingly problematic fault lines between Perhaps not as effectively as we might want,generations. Governments are proving ill- but governments are generally responsibleadapted to the emerging challenges, as Figure for such things as healthcare planning,1.1 suggests. Though, as Chapter 2 argues, infrastructure provision and social services.the very nature of what government does As Dalton McGuinty, Premier of Ontario,means that, at its best, its time horizons can Canada, recently put it, “The responsibilitybe significantly longer than those of most of leadership is to represent the future to thebusinesses. present”. For more on government, please see Chapter 2 where we highlight 12 sectors thatWarning bells have been sounded by, among are playing long (pages 20–23).others, the US National IntelligenceCouncil in a series of reports looking outa decade or two into the future.18 Amongtheir conclusions: “The whole internationalsystem—as constructed following WWII—willbe revolutionized. Not only will new players—Brazil, Russia, India and China— have a seat atthe international high table, they will bring newstakes and rules of the game.”These things go in cycles, of course, but ourgovernments, financial institutions and manybusiness leaders appear to be failing even interms of the old market rules—let alone thenew rules imposed by new considerations likeenergy, food, water and climate security.
  13. 13. 11Figure 1.1Who is getting better at thinking—and acting—long term? 50 Long-Term Acting Improving 40 30 20Long-Term 10 Long-TermThinking ThinkingWorsening Improving -40 -30 -20 -10 0 10 20 30 40 50 Individuals Businesses -10 -20 Investors -30 -40 Long-Term Governments Acting Worsening @FutureQuo Survey says individuals + businesses are improving at thinking long-term, but how to translate this into action? #FutureQuo
  14. 14. Chapter 1What Tomorrow WantsPanel 3Cultural dimensions of long-termismThe degree to which we engage with long- It is interesting to see South Korea and Chinaterm thinking differs from person to person, positioned leading the long runner pack, whilebut there are also significant differences across Egypt—land of the age-old Pyramids—bringscultures. Experts like Charles Hampden- up the rear. By contrast to the situation inTurner and Fons Trompenaars have mapped China, where long-term planning has been onedifferent cultures in terms of the time bubbles key part of the impressive, sustained expansionthey occupy, shown as different sized bubbles of the economy and of the country’s politicalrepresenting the past, present and future.19 position, the West appears to have been hamstrung by an aggravated case of politicalIt is no accident that some of the pioneering short-termism and market with tools like scenarios planning wasdone in sectors that have to think particularly It is important to note, however, that theselong-term, particularly defense and natural examples are not without controversy. Theresource extraction. Or that some of the most long-term outlook of some countries on the leftintense interest in cultural differences in terms of the chart can ignore severe social injusticesof time-horizons has come from multinational in the present. The positioning of countriesbusinesses operating multi-cultural teams. A like Russia, Slovakia, Bosnia and Albania issensitive understanding of the time orientations provocative and raises a number of questionsof different internal and external stakeholders about the links between long-term orientationis crucially important. This is a field in which and economic success.Geert Hofstede excels—see Figure 1.2.20Figure 1.2 Source: G. Hofstede, G. Hofstede, M. Minkov,Hofstede’s long-term orientation, by Cultures and Organizations, McGraw Hill, 2010country 100 80 60 40 20 South Korea Japan China Germany Russia Singapore France Indonesia Italy Sweden Great Britain India Pakistan Spain Bangladesh Turkey Brazil Canada Saudi Arabia South Africa Thailand PhilippinesUnited States Mexico Australia Argentina Morocco Iran Nigeria Egypt
  15. 15. 13Discounting tomorrow One key question: “Whether the timescales considered by boards and senior managementA fundamental tool of modern capitalism in evaluating corporate risks and opportunities,explicitly involves discounting the future. and by institutional shareholders andEconomics 101 tells us that a discount rate is fund managers in making investment andthe percentage by which the value of a cash governance decisions, match the timeflow in a discounted cash flow (DCF) valuation horizons of the underlying beneficiaries.” Thisis reduced for each time period by which it is is becoming a question of fiduciary duty.removed from the present. The estimation of asuitable discount rate is often the most difficultand uncertain part of a DCF exercise. The Our shifting paradigmchallenge is made even more difficult by thefact that a small change in the discount rate A review of management timescales andcan cause large changes in value. discount rates would certainly be a start, though it seems unlikely that the interests ofMost environmental experts see the impact future generations, in the Brundtland sense,of discounting as pernicious when applied to will be directly addressed. However, there arenatural systems like fisheries, forests or the other reasons for optimism. James Lovelockclimate. These concerns are legitimate, though (one of our 50 Stars, see page 28) may wellthe precise implications critically depend on turn out to be a modern Copernicus, and if wethe timescales within which the discounting is track his work back to the early 1960s—it isdone. very possible that we are about 55-60 years into a paradigm shift that will have profoundThree such timescales are suggested by implications for the way we view and managethe Long Now Foundation (one of our 50 Earth resources and security.Stars, see page 31), as they explore differentconceptions of deep time. These time-spans ‘Paradigm’ is a much-overused word theserange from a few days through roughly a days, but when introduced by Thomas Kuhnhuman generation (30 years) and then out to in 1962, it had a very specific meaning.22the millennia over which the evolution of human It refers to the basic assumptions and thecivilization can now be tracked. People with a underlying rules of the current way of doinghigh Future Quotient can operate conceptually science, to how reality is seen. Paradigm shiftsbetween multiple time domains—and are typically take many decades—even humanparticularly conscious of these longer-term generations—to work through, partly becausetimescales. those ‘infected’ with the outgoing paradigm have to retire or die to open up space for theOne hopeful initiative announced as we were incoming one.preparing The Future Quotient was a reviewof the impact of equity market dynamics on Before the Industrial Revolution, for example,the longer-term competitiveness of the UK the prevailing energy paradigm mainly revolvedeconomy—led by Professor John Kay and around renewable energy, including powersupported by the Department of Business, extracted from the wind, sun, animals orInnovation & Skills (BIS).21 slaves. We then moved into the fossil fuel era, with its defining ‘Cornucopian’ paradigm. Now, with growing concerns about ‘Peak Oil’, the peaking of other key resources and climate change, we are racing towards a new paradigm—whose character is yet to be determined.
  16. 16. Chapter 1What Tomorrow Wants2012 offers an important opportunity to look to Even the best-intentioned leaders can hit thethe past and review progress to date. Whether wall when attempting the transition from cellswe take a 50-year time horizon (back to Rachel 1 to 2. They make the announcements, butCarson’s Silent Spring,23 which helped launch their behavior remains unchanged: they rely onthe environmental movement), or a 40-year a (flawed) ‘do as I say, not as I do’ approach.(UN Stockholm Conference on the Human Still, if you get this even partially right, theEnvironment, Limits to Growth 24), 25-year process can go viral, as it has with bans on(Brundtland Commission Report, Our Common public smoking in some countries. Those whoFuture 25) or 20-year (1992 UN Earth Summit do make it into cell 2, must then make the evenin Rio de Janeiro) horizon, the underlying trend tougher transition to cell 3. Here the focus is onis clear. There has been a global awakening: integrating new values into corporate, urban,concerns about demographics (for example, national, or global cultures. It must be abouthuman numbers and aging), natural resource enrolling the right stakeholders and using ideasavailability, water scarcity, climate and a range to capture collective imaginations and catalyzeof other environmental and social issues have change at this cultural level.increasingly penetrated the consciousness ofordinary people, policy-makers and business Culture is the new frontier—and we need toleaders—even if they do not yet know what to get dramatically better at intelligent culturaldo in response. engineering. One key area of concern, for example, must be the impact of the ageingBut, as Figure 1.3 suggests, changing trend on the willingness of our societies tomindsets are only part of our overarching, support and invest in solutions designedmulti-dimensional, non-linear challenge.26 The to effect system change.27 Older people, indiagram, developed by Volans, indicates that addition to being politically active and moremindset change is only useful if it translates into conservative, also tend to have their pensionseffective changes in behaviors—and behaviors invested in incumbent, older order industriesare often very hard to change because they and companies. How to green the greys?are ‘locked in’ by cultures. Typically, thesethree domains are anchored in the underlying Then, as we probe the margins of cell 4, theparadigm, which often takes a very long time spotlight shifts to paradigms. However the nextindeed to shift—with 70-80 years being a paradigm crystallizes out, intergenerationalrelatively speedy shift. timescales, responsibilities and investments will need to be at its core.@FutureQuo New leadership is needed toalign mindset and behaviors with longer timehorizons. Pls RT to build collective movement.#FutureQuo
  17. 17. 15Figure 1.3From Mindsets to Paradigms1 2Mindsets BehavioursIndividual Thought Individual Action4 3Paradigms CulturesCollective Thought Collective Action
  18. 18. Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long 180Civilization depends on the ability to holdsocial groups together and to build thenecessary infrastructures and institutions.For our civilization to make sense of the 21st-century, we must stretch our timescales.
  19. 19. 17Broadly stated, the first 50 years of If fission is the status quo, what would needenvironmentalism saw processes of social to happen to take us into a future of fusion?fission at work. The one overarching agenda What would that future quo be? Stretchingsplit into a set of different issues, each with the time horizons of leaders in boards,different advocates and organizations rallying C-suites, cabinets or other centers of powerbehind them. The result has been the release is part of the solution. But we believe thatof an immense amount of negative energy as there are actually five dimensions acrossthey fragmented society into different camps which leadership must stretch to take us to aon key issues. The toxic consequences of fusion future. These are shown in Panel 4 onthese silos live on, particularly in areas like pages 18–19.climate change. Nor have we seen the backof this political fission: it is still at work in the It is important to remember that the job of anyrelations between business and government, leader is not only to focus on the future, butthe BRIC and non-BRIC countries, and also to have the ability to work in the spacebetween present and future generations. If between their vision and what is neededthis continues, we risk a future described by at a practical level in order to implementa ‘fission scenario’: a world where the focus that vision under present conditions. Likeis narrower, shallower, lower and shorter than a pendulum swinging to both extremes toit should be—and where, as a result, the best reach the middle, leaders need increasinglythat can be achieved is incremental change. to swing to the right side future quo characteristics (for example, incremental toA more positive scenario foresees a future systemic, or shorter to longer) in order tobased on social fusion, where new initiatives make up for the huge momentum with whichconvene leading businesses and other society has been pulling us back towards theactors to address key challenges. The fusion status quo.agenda depends critically on creating marketand governance conditions where doing theright thing becomes the default setting forbusiness and financial markets. Leadershipwould then involve thinking and investing oversignificantly longer time-scales in pursuit oftransformational system change. @FutureQuo 5 dimensions of high FQ leadership: 1. Systemic 2. Wider 3. Deeper 4. Higher 5. Longer. #FutureQuo
  20. 20. Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play LongPanel 45 Dimensions of high-FQ leadershipDimension 1 2 Change Scope Incremental Ô Systemic Narrower Ô WiderDescription This first dimension refers to Here we aim to measure the the type of change desired. breadth of organizational In times of fundamental horizons, networks and shifts in the economy, we thinking. In times of intense need to change the focus change, focusing in harder from incremental to system on what has been done in change. If the first 25 the past can be a cardinal years of the sustainability error. Instead, opening agenda have defaulted to horizons for a 360-degree citizenship, responsibility perspective—and creating and accountability goals, partnerships that help the ultimate aim was always migration into new systemic change—which domains. now looks set to be central to the agenda in the next quarter century.FQ50 examples Airbnb London Organising page 31 Committee for the 2012 Olympic and Arab Spring Paralympic Games page 31 (LOCOG) page 30 TED page 30
  21. 21. 193 4 5 Analysis Ambition TimescaleShallower Ô Deeper Lower Ô Higher Shorter Ô LongerAs globalization has Here we focus on the To succeed in these wider,extended supply chains, scale of ambition—and the deeper and higher strategies,the capacity for deeper degree to which there is leaders need to operateunderstanding has organizational willingness to against longer time-scales.become stretched to—and stretch. Under stress, human As Seth Godin puts it, peoplesometimes beyond—the beings tend to reset their don’t care about the long-termlimit. The time has come expectations. They typically because: “You don’t intendto dig deeper, to better lower their targets, hoping to to be around; you’re going tounderstand the history, cling on to what they have. make so much money in thescience and likely future Yet the historical evidence short term it doesn’t matter;dynamics of key challenges. suggest that successful or you figure you won’t getWe must fight to avoid the leaders have often done caught.” But, he says: “Theshallow thinking that’s so the complete opposite, thing to remember about thepossible in the world of embracing stretch goals short-term is that we’ll almostendless flows of information. and setting their targets way certainly be around when the higher than others thought long-term shows up.” 28 sensible.Gapminder Lester Brown / Google / Virgin /page 29 Earth Policy Institute 100 Year Plan* page 28 page 31Jochen Zeitz /Puma Paul Polman / *See Appendix F: Addendumpage 30 Unilever page 30 Long Now Foundation page 31
  22. 22. Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long At the same time, such challenges willStretching across the Thames open out tomorrow’s markets. Tomorrow’s economic leaders will be those who map,So where would you look for industries, build and capture a share of emerging mega-companies and business models that address opportunities, advancing transformativethese different dimensions of change—and strategies at the pace and scale required toparticularly extended time dimensions? One meet the relevant challenges. The ‘winners’answer spotlighted in our 12 sectors is civil will be those with solutions that meet globalengineering. A particularly striking example demands for resources like energy and water,of explicit, thoughtful trading between the eliminate greenhouse gas concentrations, andinterests of present and future generations, enable climate-resilient development.30brought to our attention by the WorldResources Institute (WRI), was the processthat resulted in the Thames Barrier—whichcost nearly £500 million. 12 long-sighted sectorsDecision-makers embraced a flexible approach We have identified 12 sectors that havefor managing uncertainty—so that the Barrier, a propensity for long-term thinking anddesigned to protect London from flooding, acting. The leaders in these sectors havecan withstand multiple levels of future sea demonstrated a high future orientation, thoughlevel rise. For each adaptation option, WRI they do not uniformly have this property. Theynotes, the project assessed: the key threshold are listed below—and it is no accident that fourof climate change at which that option would (venture capital, private wealth management,be required (e.g. the extreme water level); the pension funds and reinsurance) are from thelead time needed to implement that option; financial sector—this is increasingly where theand therefore, the estimated decision-point Future Quotient spotlight must shine. Whatto trigger that implementation (in terms of an lessons can we learn from such sectors inindicator value, such as the observed extreme designing systems that promote and reinforcewater level, along with an uncertainty range). high-FQ attitudes, behaviors and cultures?The Thames Estuary 2100 project is nowlooking at the next 100 years of this barrier. 1 Animal BreedingIt has identified adaptation measures that canbe sequenced over time, depending on the The first of our ‘long now’ sectors dates backsignificance of the risks identified—in terms to the dawn of the Agricultural Revolution.of rising sea levels off the UK coastline. The The generations are shorter, but animalapproach was informed not only by forecasting, breeders—by definition—think inter-but also by socio-economic scenarios used generationally. Whether they use artificialto explore cultural and consequent land-use insemination, in vitro fertilization, geneticpossibilities for the coming decades. The costs modification or cloning, they aim to accelerateof defending London against flooding are huge: evolution.modeling suggests that investment in buildingand maintaining of flood defenses will need to From Kentucky stud farms, through attempts toalmost double to £1 billion a year (compared engineer species that produce pharmaceuticalsto £570 million now) by 2035.29 in their blood or milk, there is an ongoing tension between the desire for purebredsTrading off the need—and ability to pay— and the necessity for crossbreeding. In someof present and future generations led to a cases, hybrid vigor may result. Unsustainabledecision to design a modular system, good outcomes are very possible, for example whenenough for the foreseeable future, but modular new breeds of farmed fish escape and reduceso that it can be extended to meet future the resilience of wild fish.contingencies.
  23. 23. 212 Research & Development (R&D) 4 Higher EducationThis is an immense, crucial part of the global Few sectors have had a longer-term orientationeconomy. A few years back, it was estimated than higher education when at its best.that US-headquartered companies alone were Globalization, however, has driven a rapidspending $330 billion a year on R&D.31 expansion of the global higher education market. Coupled with neo-liberal economics,There is a continual tension between the the dominant paradigm in recent times, thepressure for short-term paybacks and the historic emphasis on education as a ‘publicneed for longer-term innovation. The need good’ has increasingly been counter-weightedfor sustainability-oriented innovation is made by education seen on a user-pays basis.35in the WBCSD Vision 2050 study.32 Relatedinvestment in infrastructure, technology and One impact of globalization, however, hashuman services could reach US$ 3-10 trillion been a greater focus on the practical, technicalper annum in 2050, creating new opportunities value of education, coupled with the spread offor business to thrive and grow. Will China’s private high education provision and financing.long-term outlook power sustainability-oriented While there is nothing intrinsically wrong here,R&D, or will its unwillingness to tolerate dissent one area of concern is whether this refocusingundermine the necessary creativity? Will the potentially acts as an even greater brake on theWest wake up and play catch-up? provision of longer term, sustainability-oriented education. Anecdotal evidence suggests that it does, though only time will tell.3 Petroleum and ChemicalsIt is dangerous to generalize about something 5 Family Businessesas vast as the oil and global chemicalsindustries, but both are critically important to Unless they are royal families, family-ownedour future—and plan and invest long-term. businesses are easy to overlook in the marketsWith more than 70,000 products and annual focused on publicly listed companies, yet theyrevenues of some $4 trillion,33 the global are thought to create some 70-90% of globalchemicals industry is a massive investor—and GDP annually.36 Recent evidence suggestsis a major contributor to global R&D. that they managed fairly well through the Great Recession. A PwC survey of more than 1,600In terms of the future, we need to watch family-business owners and managers aroundtrends in location, ownership and values. New the world suggests that most are stronglyglobal chemical players continue to appear focused on future growth.37in emerging markets. In 2009, only two ofthe ten largest companies by revenue in the Family firms can operate on a huge scale,‘Chemical Week Billion Dollar Club’ were based like India’s Tata Group, and—at their best—in emerging markets.34 By 2020, up to seven their intergenerational nature can help themof the ten largest chemical companies could think and act longer-term than many publiclybe based there as the current largest players listed firms. Stewardship is a natural conceptpursue profitability over scale. for many of them.38 That said, they can also be compromised by family factions andWherever based, few sectors are more critical, intergenerational disputes. Family businessesboth because of the long-term impact of are part of the global economy we need torelated products on the biosphere and the engage more effectively.potential contribution of sustainable chemistryto a lower-footprint global economy.
  24. 24. Chapter 2The S-t-r-e-t-c-h Agenda and12 Sectors that Play Long6 Venture Capital 8 Pension FundsThey may not hold investments for Although several CEOs and academics warnedintergenerationally-long periods, but us that even pension funds are becomingventure capitalists have to envision radical, shorter-term in their thinking, due to pressurestransformative change in order to find suitable from short reporting timescales, this sectorearly-stage companies to back. The last has been involved in a number of initiativesdecade was a helter-skelter ride for the global designed to explore and address longer-venture industry.39 In 2000, it experienced its term societal challenges. They include thegreatest boom, fueled by the potential of the P8 Group and other efforts to engage withInternet and rising stock markets. In 2009, climate change in terms of strategic assetit faced the challenge of continuing to build allocation 40 and PharmaFutures, which hasinnovative companies as the global economy helped pensions funds and pharmaceuticaltouched the depths of the greatest economic majors deliver long-term value to societydownturn in a generation. and shareholders. This includes addressing critical issues such as the management ofIn between, it responded to the emergence social contract, the environment, and accessof China and India as venture capital centers, to medicines. There has also been growingas well as changes in the public markets and interest in how best to alert pension fundinvestor appetite for venture-backed IPOs, and trustees to potential risks and opportunitiesthe sudden rise of investment opportunities associated with the wider sustainabilityin social media and cleantech. Firms like agenda.41 The evidence of truly long-termKleiner Perkins, Khosla Ventures and zouk sustainability investment is mixed: in Germany,ventures are among those spurring cleantech there is interest among pensions funds, butforward. A sector to investigate and cultivate. actual investment is below average;42 in Denmark, meanwhile, PensionDanmark is investing in wind power.43 With aging societies,7 Private Wealth Management this sector can only grow in importance.Very much under-the-radar, this sector helpshigh net worth individuals and families handle 9 Reinsurancesuch areas as investment, estate management,retirement planning and inheritance tax. Time Another relatively stealthy sector, but one withhorizons are different here, with concerns unusually extended time-scales, reinsurancenot only about the interests of individuals, involves insurers transferring portions of theirbut also about families and about the risk portfolios to other parties—in this caseinstitutions or businesses created. There reinsurance companies like Munich Re oris a potential crossover with the field of Swiss Re—through some form of agreementprivate equity, another financial sector that, to reduce the likelihood of the insurers havingat its best, thinks longer-term. There is also to pay a large obligation resulting fromsometimes a crossover, through the interests insurance claims. As the insurance industryof the individuals, between these areas and is increasingly hit by claims linked to naturalphilanthropic support of wider causes. disasters, particularly those driven by climate change, reinsurers have become much moreAs a result, some family offices are notable interested in environmental changes and theinvestors in areas of the economy linking to broader sustainability agendas. Munich Resocial or sustainability challenges, steered by has been among those warning about the likelythe interests and perspectives of investors. future impact of climate change.44A growing number of financial institutionsspecialize in helping investors to apply a green Among the systemic risks spotlighted by theor sustainability lens, including Deutsche Centre for Global Dialogue, founded byBank, Pictet and Bank Sarasin. Swiss Re, challenges around sustainability are high on the list.45 Stealthy, but a natural ally for the long-term change movement.
  25. 25. 2310 Forestry 12 GovernmentDepending on whether it grows softwoods There is concern around the role ofor hardwoods, a forestry business operates governments in thinking and acting long-on commercial time-scales that are short-, term, as shown in our survey data (Figure 1.1,medium- or long-term by mainstream page 11), but there are few truly free markets:standards. The plight of the global forest governments influence how business is donehas been a defining environmental issue, in many ways, direct and indirect. In manywith sectors like cattle ranching and oil palm societies, governments—at their best—alsoplantations particularly controversial in terms of think longer-term than most businesses. Fortheir contributions to forest loss. each of the other eleven sectors spotlighted, effective, sustainability-oriented governmentTheoretically, there is enough wood to supply is necessary for future progress. Equally,global wood requirements.46 An analysis carried governments around the world face newout by WWF and the World Bank indicated demands, new expectations and a fast-that by sustainably managing 60% of the growing array of new technologies and’s forests, at different levels of intensity In most countries, the civil service systemsand for different purposes, we could protect of today’s governments require considerablethe remaining 40%. Our success in protecting modernization.51 At the same time as slimmingthe global forest will be a key indicator of down governments and their civil services,sustainability—and the sector’s leading edge we must rebuild the social contract betweeninitiatives could provide a useful model for other governments and citizens through the usesectors. One company to watch is Sweden’s of such techniques as open governmentSveaskog, which sees a bright future in such and open data. And more can be done toareas as ecological services.47 Another key attune public sector purchasing to emerginggroup focusing on this issue is REDD+, the realities, something the US General ServicesUN Collaborative Programme on Reducing Administration (GSA) is increasingly workingEmissions from Deforestation and Forest on.52Degradation in Developing Countries. There is not the space here to dig into the11 Civil Engineering lessons to be learned from such sectors—nor the ways in which their own Future QuotientsFew sectors think longer-term than civil might be expanded. But it is no accident thatengineering, whether building oil refineries, we end with Government. Rarely popular withmotorways, dams, urban infrastructures or sea business, and rated lowest of all in Figure 1.1defenses. As Siemens notes, what happens in (page 11), governments nonetheless have athe world’s cities will largely determine whether crucial role to play in ensuring markets thinkhumanity can lower its common environmental and invest for the long-term.footprint, or whether it will face a greaterenvironmental risk.48 The UN Population There is no such thing, it is often said, as a trulyDivision estimates that over half of the world’s free market, and our challenge for the comingpopulation now lives in urban areas, likely to decades is to design, incentivize, regulate andgrow to almost 60% by 2025 and 70% by police our markets in new ways fit for purpose2050.49 Today’s cities are already responsible in the twenty-first century. To get some sensefor about 80% of greenhouse gas emissions,50 of the directions that high-FQ pioneers aremaking them carbon inefficient—but this need taking, we now spotlight 50 Stars in seriouslynot be so. long-term innovation.Cities have built-in economies of scalethat should enable much lower averageenvironmental footprints for residents.Achieving these savings means takingchallenges like global warming, water use orwaste seriously—and creating the enablinginfrastructures.
  26. 26. Chapter 350 Stars in SeriouslyLong-Term InnovationAt times it seems that everyone wants to be astar, but few are prepared to put in the necessarytime and effort. Here are 50 individuals, initiativesand organizations that are first magnitudestars—or headed in that direction.
  27. 27. 25“We are on a journey,” CEOs like to say as Clearly, the best leadership decisions playthey sign up to the sustainability agenda. across many—or all—of these dimensions.What they often mean is that the outlines of To take just one striking recent example, recalltheir enterprise are vague, the destination the decision of 200 Japanese pensionersunclear, the captain and crew distracted, and to volunteer to begin the cleanup at thethe sailing date still to be agreed. But the Fukushima power station.53 Made up of retiredleaders who feature among our 50 high Future professionals, the ‘Skilled Veterans Corps’Quotient Stars mean something very different clearly think long-term, arguing that they shouldwhere they use the phrase. be facing the radioactive risks, not younger people, because they would be more likely toSo what are the characteristics we need to die of natural causes before the cancer risksadopt to ensure the new, stretched, future- told. Such forms of collaboration and cross-friendly forms of leadership highlighted in the generational sensitivity are deeply cultural,previous chapter? We asked our 500 expert which is why the cultural dimensions of changerespondents what qualities enable thinking and are critically important.acting with stretch. When we crunched thenumbers strong patterns began to emerge— On pages 28–31 is the final sample of 50and, ultimately, seven key themes surfaced. Stars we identified, as mini cases of differentMost of them are now commonplace in the characteristics of high-FQ thinking and and leadership literatures, but The selection is based on rigorous discussion,a couple are not, and the combination of all but is by no means definitive—indeed is quiteseven helped develop the framework used to skewed to the USA and Europe. As youidentify the FQ50. view the 50 Stars, think of them as the sort of pattern you might see when you shake aOur respondents suggested that high-FQ kaleidoscope of brilliant crystals. It would beleaders know how to navigate what we call fascinating to see what happened when wethe 7Cs (see Panel 5 on pages 26–27). shake the kaleidoscope in different parts of the world—or with different age groups. To draw out the narrative a little, we have clustered the Stars under five categories: Pole Stars, Superstars, Constellations, Pulsars and Neutron Stars—and will explain each as we go. @FutureQuo FQ50 7Cs criteria: 1. Challenging 2. Curious 3. Collaborative 4. Courageous 5. Creative 6. Cross-generational 7. Culturally connected #FQ50Star MagnitudeM0 M1 M2 M3 M4 M5
  28. 28. Chapter 350 Stars in SeriouslyLong-Term InnovationPanel 57Cs of High FQ LeadershipCharacteristics + FQ50 example Descriptionkeywords used byrespondents to theFQ survey1 Challenging X Prize Foundation Leaders need a capacity both to scan values, empathy, demonstrate a strong 360-degree horizons and to focus down like passion, purpose change orientation a laser on critically important priorities. page 31 They understand the risk posed by the ‘Chasm’ described earlier. They challenge the status quo. They are driven to change the current order. If they are CEOs, they see beyond the bottom line. If politicians, they operate beyond normal electoral cycles. But the critical point is that they take their investors, customers, employees or voters along with them—to the point where they ask for more change, not less.2 Curious Janine Benyus In times of change, successful—and openness, playful, remain intensely useful—C-suite members are likely to have understanding curious a voracious appetite for new ideas, for new page 28 conversations and for different ways of doing old things—or new things to be done.3 Collaborative Ushahidi The recent business bestsellers tell us that connected, experiment with success comes from being connected, being fusion, generous, new ways to be collaborative, tapping into society’s “cognitive networked collaborative surplus”—or willingness to contribute to open page 30 source methods for developing solutions. Successful leaders are as good on internal collaboration as they are on external forms— and at linking the two.
  29. 29. 27Characteristics + FQ50 example Descriptionkeywords used byrespondents to theFQ survey4 Courageous James Lovelock System change demands immense courage, focused, patient, a courageous stand sustained over long timescales. High-FQ risk-tolerant over decades for leaders have courage and stamina, plus an a new scientific ability to adapt when necessary. They also paradigm motivate others to follow their lead. page 285 Creative Living Bridges Low-FQ leaders are the victims of the analysis, ideas, play into creative processes of creative destruction mapped optimism destruction and out by economists like Joseph Schumpeter. renewal Their high-FQ competitors, by contrast, page 28 understand the macro-economic trends, the lessons of history and the drivers in the sustainability agenda that will reshape global markets. For a high FQ solution from the rural world, see Living Bridges, which were born from the need for flood-proof means of crossing rivers.6 Cross- Ian Cheshire / Generational agendas come in many forms. generational Kingfisher and B&Q They differ for product designers and for having children, are comfortable with animal breeders, for family businesses and legacy, long-termist cross-generational pension funds. There are natural selection timeframes processes in most long-sighted sectors page 29 (see Chapter 2) that ensure a better alignment of the business with the interests of stakeholders, and lessons can be learned and transferred to other sectors.7 Culturally The Elders Changing mindsets is tough, but changing connected work to co-evolve the behaviors is almost impossible at times systemic thinking, cultural context unless you also change cultures. That is what vision page 29 a growing number of pioneers are attempting. Done well, this takes us several steps towards paradigm change.
  30. 30. Chapter 350 Stars in SeriouslyLong-Term Innovation She has continued to lead long- Living BridgesPole Stars sighted change through her work as Unknown IndiaReliable, navigational reference points Director-General of the World Health Organization (1998-2003), and Special Perhaps the epitome of inter-Aspen Institute’s Envoy of the UN Secretary-General on generational innovation, and certainlyLong-Term Value Principles Climate Change (2007 to date). the most sustainable bridges in the2007 USA world, these beautiful and Jeremy Grantham / strong tree-root bridges span rivers ofRepresenting an unprecedented GMO Northern India. Taking half a generationconsensus among companies, 1977/2011 UK/USA to complete, as roots are teased andinvestors, and corporate governance woven to create bridges up to 100 feetprofessionals, the Principles promote A British-born investor who co-founded long, many last for at least 500 years.exactly the sort of thinking and Boston-based asset management A benchmark for innovators of todaypractices that are critical to long-term GMO in 1977, Grantham takes a very who aim high for future-fit ideas.value creation. long-term view in his investment—and has published several fascinating letters James LovelockJanine Benyus for investors on where we currently find 1919 UK1958 USA ourselves. Also funds research, for example, on climate change.54 Originator of the Gaia Theory, heA natural sciences writer, innovation A fascinating model for other financial argues that the earth as a whole is aconsultant, and author of six books, analysts and investors. self-regulating system able to keepincluding Biomimicry: Innovation the climate and chemical compositionInspired by Nature. Although standing James E Hansen comfortable for organisms. Patienceon the shoulders of giants, she branded 1941 USA and conviction saw this paradigm-levelan emerging discipline that seeks theory weather many criticisms, andsustainable solutions by emulating Described as the Paul Revere of elements of it achieved widespreadnature’s designs and processes (e.g. impending climate chaos, Dr Hansen acceptance in the early 2000s. It hassolar cells that mimic leaves, agriculture is a world-class climate scientist, who been described by one former critic asthat models a prairie, businesses that has take an active stance on the policy a ’Copernican insight’.run like redwood forests). issues—including writing the book Storms of My Grandchildren. Stockholm Resilience CentreLester Brown 2007 Sweden1934 USA Institute for the Future 1968 USA Resilience—the ability to deal withFounder of the Worldwatch Institute change and continue to develop—isand the Earth Policy Institute, author For the past 40 years, this non-profit a property closely linked with fitnessand co-author of around 50 books, has helped organizations make better for the future. This international centrepublished in some 40 languages, decisions through foresight. Their 2008 advances research for governanceand careful to balance coverage of Sustainable Outlook Map explored of social-ecological systems, lookingthe world’s greatest challenges possible strategic responses to the at how we can culturally, and(e.g. loss of biodiversity, climate sustainability agenda, and they have intergenerationally, manage and governchange, poverty) and emerging a rolling 10-year forecast. for the (e.g. smart grids, electricvehicles, bicycles). Recently has The Intergenerational Foundation The Economics of Ecosystemstaken a civilizational perspective. 2010 UK and Biodiversity (TEEB) 2007 InternationalGro Harlem Brundtland This fledgling non-profit seeks to place www.teebweb.org1939 Norway intergenerational issues at the heart Biodiversity loss is often framed in of public debate—both between living intergenerational terms—we haveharlem_brundtland generations and on intergenerational species today that our children willA medical doctor by training, and timescales. Working in partnership with never see. TEEB aims to spur theaged just seven when she joined a German counterpart—Foundation for development of cultures that valuethe Norwegian Labour Movement, the Rights of Future Generations—they biodiversity. It treads the middleBrundtland served as Norway’s are encouraging research into the area ground between the moral imperativeminister for environmental affairs before with a prize. Watch this space. and the hard economic case for thebecoming the country’s first female conservation of ecosystems. Under theprime minister in 1981. She was leadership of Pavan Sukhdev, TEEBinstrumental in propelling environmental has developed an agenda for decision-responsibility to the international takers and policy-makers that will beagenda through the 1987 report hard to ignore.Our Common Future (also knownas the Brundtland report).