Time for a revolution: bold new business models for the 21st century

I wrote this for the October edition of British Airways in-flight magazine, Business Life. 

If you’ve read Culture Shock, this is like a refresher, reinforcing some of the key points and specific examples.

And if you haven’t read Culture Shock yet, well, this is the essence of it…

Dear business-as-usual, it’s time for a revolution

Business as usual is utterly screwed. It values the wrong things, rewards the wrong people and behaves in the wrong ways. Here we are in the 21^st century and the world has changed so completely, so profoundly, yet if you took a CEO from the 1950s and parachuted him – and it would be a him, not a her – into 99% of our business organisations today, he’d know his way around. It would generally look, behave and operate in ways that he’d be familiar with.

But look out the window – that world you peer down on is transformed from the post-war 50s when the high principles of ‘modern’ business practices emerged. Right now business must make sense of new technologies, generational differences, geopolitical shifts in power from West to East, continued economic crisis and the needs of a planet that is increasingly ravaged. But most all, business must adapt to a world where people are beginning to demand much more from it – where the pursuit of profit alone is no longer enough. We need a revolution.

Change is coming

Meanwhile, in dry and dusty California, Patagonia has created a sustainability initiative to actively encourage owners of their outdoor apparel to sell their used Patagonia products on ebay, potentially limiting new product sales. In wet and windy Scotland, upstart craft beer makers BrewDog have twice raised millions from their customers to fund expansion, turning fans into investors, whilst in the close humidity of Bangladesh Grameen has created a pioneering bank and a mobile phone company both of which allow people living in poverty to improve their lives and are financially sustainable. This is what 21^st century business looks like: different and better.

Changes like these are happening in pockets and often at the edges at first. For the complacent, these evolutions are easy to ignore or deride – ‘pah, might work in California or Bangladesh, but not in my business – what matters here is the bottom line’ or maybe just sheer lack of time is the smokescreen – ‘heh, we’ve got enough on our hands without worrying about this airy-fairy hippy business stuff’. But my argument is this: that the time is now, and a tidal wave is growing in size out at sea, a wave that will wash through the whole of business and more. And soon it will come crashing down on the aging structures and stale, dated attitudes of 20^th century business. This is no time to be complacent, great change is coming. Time to build a better boat!

So if we were to step back from the businesses of today, and ask ourselves ‘what can we learn from these early pioneers to help us design a 21^st century organisation?’, what would we come up with? Here’s a flavour of what I found when I researched my book Culture Shock drawn from three chapters: Purpose & Meaning, Leadership and Fair Finances.

Purpose & Meaning

21^st century businesses have a higher purpose and creating meaning that goes beyond the work itself and the creation of profits. They stretch to solve a great problem that matters to society. I call this a ‘Purpose of Significance’.

Here’s an example – have you heard of Noma? If you’re a foodie, the answer is of course yes. Noma was ranked as Best Restaurant in the World by Restaurant in 2010 and 2011. Noma isn’t in New York City, Tuscany, the hills of Catalunya, Paris, London or Tokyo. Noma – famous for dishes and flavours that celebrate the very best of Nordic produce – is in Copenhagen, the gorgeous capital of Denmark. When you start to look into the story behind Noma there’s a fabulous and inspiring story of how purpose and meaning can fuel incredible achievement, and simultaneously empower a whole generation of likeminded changers.

As Claus Meyer, co-owner of Noma, describes on his website: “Less than 10 months after the opening of our restaurant “noma” November 2003, head chef, manager & partner Rene Redzepi and I took the initiative to organize “The Nordic Cuisine Symposium”. The day before the symposium September 2004, at an 18 hour long workshop, some of the greatest chefs in our region formulated the New Nordic Kitchen Manifesto. The Nordic Cuisine Movement was born!”

The whole manifesto is simple and inspiring, but for me the tenth aim is the most powerful of all: “To join forces with consumer representatives, other cooking craftsmen, agriculture, the fishing, food, retail and wholesale industries, researchers, teachers, politicians and authorities on this project for the benefit and advantage of everyone in the Nordic countries.” Basically, to go beyond our own self-interests.

In doing so Noma created and placed itself in a context of higher meaning that could engage and impassion every would-be employee, every diner, every producer and supplier. It triggered a great change in how Danish society thinks about food. This is what can be done with the power of Purpose of Significance – change that affects millions, for the good.

Conscious leadership

21^st century businesses demand much more from leaders. This networked age, with workforces dispersed across different nations, working fluidly from various locations connected in new ways by digital tools, requires a different leadership approach. As John Chambers, the long-standing CEO of Cisco put it in an interview with the New York Times: “I’m a command-and-control person. I like being able to say turn right, and we truly have 67,000 people turn right. But that’s the style of the past. Today’s world requires a different leadership style — more collaboration and teamwork, including using Web 2.0 technologies.”

So key to success as a leader in the 21^st century are these values of collaboration, dialogue, transparency and authenticity – command and control just won’t work any more.

A great example of this that I discovered is at W.L. Gore, makers of Gore-Tex. Gore is quite a different business, and has been way ahead of its time for more than half a century – it’s just taken the rest of us a while to catch up! At Gore they talk about Leadership being ‘defined by followership’. That is, that the group nominates its leaders – they “vote with their feet” as CEO Terri Kelly puts it. Quite simply, you cannot be a leader at Gore without having people that are willing to follow you. Love it!

I believe that this mindset will grow in a world where our teams are dispersed, increasingly made up of freelancers associates and the influx of Millenials who are more willing to ask ‘why?’. We increasingly need to manage our teams like volunteers rather than conscripts. So the questions then for any of us that lead are ‘how do I create followership?’ and ‘why do people choose to follow (or not follow) me?’. This search will lead us to developing a much deeper understanding of people’s intrinsic motivations, beyond money alone. If we can do that, people will follow us, and we will successfully lead in this changing world.

Fair Finances

In the 21^st century there are exciting new ways to raise funds to get businesses financed. And it is no longer acceptable for businesses to reward leaders grossly more than the workforce that contributed so much to those rewards.

On the funding side, we are also seeing 21^st century innovations happening around how businesses raise cash for growth. I mentioned the rebellious Scottish brewers BrewDog and their fan-funding programme earlier. Whilst those guys organised their own scheme, the web platform Kickstarter is opening up the same possibility to many more businesses.

Kickstarter is a platform where I – a creative or entrepreneur – can outline a project I’d like to bring to life: a film I’d like to shoot, a book I’d like to write, a technology I’d like to develop. After describing my would-be project, I can invite the world to become ‘backers’ – that is, to co-fund the development of the project in return for a small reward – a signed copy of the book for $25 or a private reading for $250!

Some projects are hugely over-subscribed – like the Pebble customizable watch project, which raised a whopping $10,266,845 against an original target of $100,000 goal, whilst others just meet their targets and some don’t at all. The crowd decides, and the crowd funds: this is crowdfunding and it’s here to stay. And what a powerful prize: turning consumers into investors.

Mondragon is an enormously successful Spanish employee-owned conglomerate whose 250 odd businesses turn over in excess of €14bn annually, despite the disastrous performance of the Spanish economy in recent years. At Mondragon a democratic vote within each individual operating company agrees what the ratio will be between the general manager and executives, and those on the frontline – those the ratios vary from 3:1 to 9:1 in the 250 different Mondragon businesses, and the average is 5:1.

Why is it that Mondragon has been able to buck the travails of the Spanish economy and continue to thrive? Perhaps this inherent fairness binds the workforce together, creating a culture that is more resilient in challenging times. That certainly makes sense to me.

What really matters?

I’ll finish with a story. About a month ago I went to my little boy’s infant school for his leaving assembly. We sat in the school hall in small chairs, lines of us parents, like giant overgrown kids. It smelt like school used to smell, it sounded like school used to sound and I found myself remembering what it was to feel like a kid back at school. Our children came out and danced, spoke and sang. And then they sang the Heather Small song with the chorus ‘what have you done today to make you feel proud?’. Boom. That chorus hit me like a hammer. The innocent intensity of the children singing, the simplicity of the words, it cut through. I know it’s cheesy. It’s kids, it’s a pop song, but really – just then – I thought ‘what have I done to make me feel proud?’. What an epic, challenging question. It makes me wonder, when we stand together as a business community and look back, what will we see? What will we have left behind, what will we have improved, solved and positively changed? Will we be proud of what we did?

There are many more examples to share, and I am still discovering more every day, but I hope you can see what I see – that business has to evolve. I believe that it is time for a revolution in business. That it is time for us to reach for more than profits alone. And that the time is now.

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For more, see the reviews and buy Culture Shock.