Breakthrough Capitalism: “We are more than consumers, more than tax payers”

A UN Global Compact survey reported that 81% of CEOS believe sustainability issues have become part of their company’s strategy and operations.

Most people would see the survey as a positive sign for sustainable business. Volans’ Executive Chairman, John Elkington does not.

A few short weeks ago, John shared these survey findings to a crowd of Canadian business leaders and posed the question: if CEOs are ‘accounting’ for sustainability issues in their core business, why are we experiencing escalating pressures on our environmental, economic, political and social systems?

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John Elkington speaks to business leaders in Toronto, Canada.

The Volans team believes that part of the answer rests on the shoulders of executive level corporate leadership. Around one thousand companies control half the value of all the world’s publicly listed organizations. The power of some of the largest corporations and their leaders has become colossal in magnitude.

In response to the expanding dominance of business, Volans catalyzed a movement called Breakthrough Capitalism. Breakthrough Capitalism is a global call to action for corporate leaders to “reboot” capitalism through radically re-envisioning their business models. Volans has hosted Breakthrough forums in Berlin, London, Singapore and most recently Toronto.

In early November, Canada’s Breakthrough Capitalism forum challenged Canadian business leaders to rethink the way they do business in context to increasing global complexity. In his opening address, John Elkington acknowledged the increasing linkages between systems such as the food-energy-water-finance nexus, where one system cannot be fully understood without considering the others.

Toronto’s event brought together leaders from a cross-section of industries including financial services, energy, consumer goods, food, health, media and retail. The day was heavy on interaction and light on speeches. It opened the space for candid dialogue, questioning and brainstorming. Participants were asked to understand their business in relation to projecting three future world scenarios: Breakdown, Change-as-usual, and Breakthrough as depicted in the video below.

Following a fairly morbid discussion, participants recognized that the Breakdown and Change-as-usual scenarios are one and the same. Both will result in over-consumption, resource depletion, widespread poverty, and failed governance. The only distinction is that Breakdown will reach systems collapse sooner. Consequently, managers were quick to agree that the only viable way forward is the Breakthrough scenario.

 

What does Breakthrough mean to Canadian Business Leaders?

 

1) Executive Leadership

All participants agreed that buy-in from the top is critical. One only has to look at the likes of Paul Polman at Unilever or Jochen Zeitz at Puma to understand that executive level leadership holds immense power over corporate strategy.

2) Aligning Language

From shared value to corporate social responsibility, conscious capitalism to constructive capitalism, corporate social innovation to sustainability, the field is a cacophony of competing language. It’s painfully ironic that each movement is attempting to achieve the same goal of making the world a better place. Participants accept that language needs to converge in order to shift the movement from the periphery to the mainstream.

3) Creating Opportunities to Act

During the afternoon, the forum broke out into four groups prepared to hack the assumptions and models driving their respective industries. These breakout groups gave attendees permission to dig deep into the heart of their business and posit potential solutions.

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Hal Hamilton, founder of Sustainable Food Lab, facilitating a breakout session.

I.     Accountants

Generating a storm of new ideas and next steps, the accountants led the way for actionable solutions. Real time performance indicators, responsible resource stewardship, long-term thinking, and embedded sustainability education represented a handful of the accountant’s proposed objectives.

II.     Consumer Behaviour

Marketers wrestled with their dependence on ever-increasing consumption in order to meet their sales growth objectives. Group participants agreed that enabling consumers to align their social and environmental values with their purchases is the future of responsible consumer behavior.

III. & IV. Food

Solutions that bubbled up from the food systems group included creating a “sin food” tax, mitigating food waste, educating consumers, investing in local food, and collaborating along supply chains.

 

4) Personal Transformation

Although much needs to be done at the office, change must also start at home. Too often we ask the world to act differently and forget our own role in embracing the change we seek. It was widely recognized that we should be mindful of our own values and beliefs, and channel that energy beyond our workplace to permeate all aspects in our lives. Sandra Odendahl of RBC captured this spirit in her closing remarks: “We are more than consumers, more than tax payers. We are citizens.” As citizens, it is our duty and privilege to care for one another and support a healthy environment.

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Sandra Odendahl

What Now?

It’s up to us – business leaders, civil society and government – to push one another forward. As the CEO of MaRS Discovery District, Ilse Treurnicht, declared, “It feels like the world expects more of us than we expect for ourselves.” Let’s cut loose from the status quo and rise to meet the demands of wicked problems. We are ready. It’s time for a breakthrough.

Top Ten Takeaways from the Social Enterprise World Forum

Last month Calgary hosted the annual Social Enterprise World Forum. Here are Charmian Love and Tim Draimin’s top 10 takeaways from the conference.

1.   System Change. The Next Frontier.

While “entrepreneurship is about the creation of tangible value,” says the godmother of social entrepreneurship, Pamela Hartigan, “in the case of social entrepreneurship, it is about creating systems change.”

 2.   The Social Enterprise Movement Is Tax Status Agnostic.

Calgary was the sixth SEWF and the first to be tax status agnostic. For example, the competition for TRICO Foundation’s Enterprizes were open to for-profits and nonprofits. “Social entrepreneurship,” said Pamela Hartigan, “… is paving the way toward a much larger transformation of capitalism where the creation of positive social change through markets will be the key to success rather than the result of a special kind of business.” The corollary is that blended value can produce change regardless of its tax status. Ultimately the biggest impact of social enterprise will be its ability to help kick-start the shift from traditional capitalism to Capitalism 2.0, or what John Elkington calls Breakthrough Capitalism, or Umair Haque’s constructive capitalism.

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Pamela Hartigan spoke at the Social Enterprise World Forum

3.   Heroes Welcome. Teams Required.

Not everyone can be a social entrepreneur, says Pamela Hartigan, if it doesn’t stand for “promoting disruptive business models” and transformational change that addresses root causes.  At the same time, visionaries require teams to make change. While Pamela highlighted that only a few are social entrepreneurs, many people can be involved in the entrepreneuring (Pamela’s term) efforts to make societal change happen.

4.   Disruptors Need Bridging and Receptive Innovators.

Al Etmanski, the co-founder of Planned Lifetime Advocacy Network (PLAN) and social entrepreneur behind the Registered Disability Savings Plan (RDSP), described entrepreneuring systems change roles slightly differently. He says that “it takes three distinct types of innovators or entrepreneurs to achieve broad systemic change: Disruptive, Bridging, and Receptive.” Al’s Disruptive Innovator is the social entrepreneur. Bridging Innovators excel in identifying big ideas and leveraging their connections, reputation and resources to make the value of the disruptive innovation clear to the system. Receptive Innovators are the institutional entrepreneurs or intrapreneurs, who are skilled at advancing the big idea throughout the system. All are required.

5.   Events Can Kick off the Conversation.

MaRS Centre for Impact Investing and TRICO capitalized on the unique character and size of SEWF by hosting a half-day lead-up event: Canada’s first gathering of impact investors. The event began with an update from Sir Ronald Cohen, video-conferenced in from Washington where he had just hosted the G-8 Impact Investing meeting. Also joining this landmark event were federal and provincial ministers and their delegations from across Canada who also attended Canada’s first-ever national social enterprise gathering by government policy makers.

6.   Labs, Labs, Labs.

It appears there is a huge push in Canada to develop labs to support multi-sector collaboration in solution generation and scale up.  How these activities happening across the provinces stay connected to each other – and learn from one another’s successes and failures – will be instrumental in making sure this movement transcends the fad-ism that some fear will consume their activities.

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The Social Enterprise World Forum hosted several Finance Solutions Labs that generated plenty of ideas

 7.   Top-down support from across party lines

From Federal Minister Jason Kenney to Ontario Minister Eric Hoskins to Alberta Premier Alison Redford, intergenerational and cross-party support signal growth for the social enterprise sector. Whether through an openness to explore addressing the needs of the sector through policy reform or through investment funds or tax credits for social enterprises – the bottom line is that very senior levels of government are watching and ready to do something different. The question will be how to make their interest leap from conceptual conversations to practical and pragmatic action.

8.   Community capitalism.

Dr. Wanda Wuttunee has devoted her research to understanding how Aboriginal values interact with capitalist values. Opening the conference alongside Dr. Ilse Treurnicht of MaRS and Mary Gordon of Roots of Empathy, Wuttunee asked attendees to reflect on the unique lens indigenous experience provides to enterprise and economic opportunities. The term “community capitalism” reflects her emphasis on the need for economic development to be in sync with Aboriginal communities. There are under-valued benefits in seeing the economy through this perspective.

9.   Resiliency Required.

The SEWF taking place in Calgary was a metaphor for the change needed. This is about resiliency and an ability to pick up when times get tough. This was most pointedly drilled home by the Mayor of Calgary indicating that only 52 days earlier the venue for the evening rodeo was under water due to mass city-wide flooding. As he pointed out, responsive community cohesion led to a quick recovery.

 10.   Value – for whom?

One of the most re-tweeted one-liners from Ilse Treurnicht, CEO of MaRS.  Harvard’s definition of innovation is invention with value.  But Ilse rightfully asks – “value for who?”  This is a powerful reframing of the role of innovation and how it must be leveraged as a force for good.