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“We do not consider the purpose of this company to be returning money to shareholders. There is a broader purpose.” says Emmanuel Faber, CEO of Danone.
As the realities of climate change meet the injustices of wealth distribution, many people are struggling to see how capitalism in its current form can stay relevant. At the same time, it’s not clear how any alternative system could possibly keep a growing population fed, sheltered, and employed.
One answer is to reform the system we have, as a growing band of hedge fund billionaires and public-company CEOs have suggested. But when executives talk about serving a purpose beyond making rich shareholders richer, their words can ring hollow. Too often we find that what a company does, for example avoiding taxation, conflicts outright with these lofty new promises to society.
What’s missing at big corporations, ultimately, is accountability. Faber has found a way to provide it—and he’s bringing it to every corner of the sprawling food and dairy giant.
Subsidiary by subsidiary, Paris-based Danone is on its way to transforming itself into a “B Corporation,” which commits it to meeting a rigorous set of criteria in areas including sustainability, transparency, and legal accountability.
Faber is compelling when he communicates the clarity of his vision, practiced no doubt on the other large-company executives to whom he has suggested joining Danone in the process of “B Corp” certification.
“It’s quite clear what I’m saying, I think, and we’ve been vocal about it,” he says. “We do not consider the purpose of this company to be returning money to shareholders. There is a broader purpose.”
Danone is a yogurt behemoth. It has a global staff of 100,000 and operations stretching across Europe, Asia, and America, where it sells a range of familiar products, from dairy foods (including the yogurt, called Danone or Dannon, depending where you live) to baby formula, Evian to almond milk. Most B corps, in contrast, are small. An analysis of data from all B Corps registered as of November 2019 showed that 95% have under 250 employees. But in 2015 Danone began the process of certifying every part of its $27 billion business, with separate certifications for each subsidiary. To date, about 30% of Danone’s operations are B Corp-certified, and it aims to convert the rest by 2030.
The transformation will enshrine Faber’s vision of success, which is predicated on the idea that in order for the company to thrive, the rest of the world must be thriving, too.
Faber’s rhetoric is stronger than most CEOs will venture. But his sentiments don’t make him a total outlier. More and more, business leaders are talking about having a sense of responsibility to people other than those who own their stock. In August 2019, the Business Roundtable, an influential group of US CEOs, dramatically departed from championing the interests of shareholders exclusively, with a statement that firms had wider obligations: to customers, employees, suppliers, and communities, as well as to anyone who owns a share of stock. (Many questioned whether the statement has teeth, but it’s still a big change in focus.)
There are 2,500 certified B Corp companies globally, most of them small, suggesting the movement has been a fringe enterprise with impressive ideals and not a lot of reach. But if a massive multinational like Danone is certifying, then other vast companies can do so, too. And that means we could be witnessing not just an existential crisis in capitalism, but a possible solution.
Purpose as a product
Faber’s ideas about purpose weren’t constructed in a vacuum. Paul Polman, as head of Unilever, was also a vocal advocate of a different kind of business (and remains so despite having retired as CEO in January 2019). Several parts of the Unilever empire are certified B Corps, including ice cream brand Ben & Jerry’s, which was bought by Unilever in 2000 and became a B Corp in 2012, and Seventh Generation, a maker of household cleaners that was among the first wave of companies to certify as B Corps back in 2007, and which was acquired by Unilever nine years later.
When an artisanal ice cream maker founded by two Vermont hippiessays it prioritizes the planet, it’s not hard to believe. But large, faceless companies typically haven’t earned the same level of trust. Even casual observers of the corporate world tend to respond to big firms’ social-responsibility pledges—caring for their people, or protecting the Earth—with a particular, grim kind of laughter. Of course companies say that, we think. But we are the children of capitalism. We’ve discovered, time and again, that what they truly care about is money, and what they protect is profit.
And why wouldn’t they? Companies exist both within and because of capitalism. And at capitalism’s heart is an immutable truth: however much a leader, worker, or founder thinks the oceans, or equality, or kindness matters, shareholders matter more. At least that’s the way Milton Friedman, one of modern capitalism’s encouraging parents, explained it to us.
With an upbringing like that, what would a company—a profit-seeking structure in a world of finite resources—have to do to convince a skeptical public that it’s truly driven not by profits passed on to the investor-owners that keep it in business, but by purpose? And could a company driven by purpose possibly expect to find for support for the idea among its shareholders?
Faber notes an indication that investors are supportive of the direction in which he’s taking Danone. In 2018, the company added environmental, social, and governance (or ESG) criteria to a syndicated €2 billion ($2.2 billion) “positive incentive loan” from a group of banks led by BNP Paribas. The loan rate is structured to fall over time, so long as Danone meets its ESG goals and gets a certain percentage of its sales from B Corp-certified divisions. If the company underperforms, it pays a higher loan rate. The banks’ willingness to take on such terms is an indication, Faber says, that they see an increased upside, or at least a decreased risk, in the way Danone plans to develop over the next few years.
Marisa Drew, CEO of Impact Advisory and Finance at Credit Suisse, says there’s been “a sea change” in the extent to which big investors are seeking sustainable investments—an argument, no doubt, for why her position was created two years ago.
She says that five years ago, the evidence wasn’t clear that investors should be taking future-climate risks seriously. There surely are scientists and activists who would bristle at that, having been pleading with the world to heed their warnings for upwards of 30 years. In any case, institutional investors are now pricing in risk from climate change to their longterm plans, and corporates are “doing a lot of introspection,” Drew says. Looking at the roster of B Corps, she suggests, is a good primer on which companies have truly committed to change.
What it means to be a B Corp
When Danone’s entire North American business gained certification in April 2018, it became a Harvard case study, and the biggest B Corp in the world.
There’s no denying that the company uses its B Corp status to promote its brand, with marketing materials infused with themes of naturalness, family, and homespun values. A video released by Danone in 2018, for example, shows kids and grownups placing wooden blocks into a pattern announcing the company’s B Corp achievement, before upbeat music kicks in alongside images of flowering trees and children picking berries.
Could Danone’s message of purpose be nothing more than a slick marketing pitch? And how can a consumer tell the difference between that and real, purpose-driven change?
Any company can call itself “green,” and most now do, even traditional energy companies with most of their business in mining oil and gas. BP readily lays out its intentions to expand its renewable energy business; ExxonMobil publishes its findings on biodiversity in an area of virgin forest it is gearing up to drill.
Certification holds companies to account. But in order to trust that B Corp status means real change, a consumer would need to trust the verification process.
Chris Turner, executive director at B Lab UK, the body that walks UK companies through the certification process, says that what sets B Corp apart from other frameworks and designations is the two-fold demand it makes of a company, both to go through a process of reporting and change, and also to make a permanent legal alteration to its structure. (In contrast, the Benefit Corporation designation available in the US requires a legal change but doesn’t have an independent vetting procedure. All US B Corps are also Benefit Corporations, but not vice versa.)
To get B Corp status, a company must achieve a minimum “score” (of 80 points) across five criteria: governance, which covers a company’s ethics and its mission; workers, including their wellbeing and career progression; community; environment; and customers. And to keep its status, a company must get re-certified every three years. The B Lab Standards Trust, a global body independent of the B Labs in each country, vets company submissions to provide independent verification of the applicants’ claims.
Part of the certification process relates to transparency. One requirement is that any B Corp which is a wholly-owned subsidiary of another company has to publish its full assessment on B Lab’s website.
UK-based smoothie company Innocent Drinks is a B Corp, and a subsidiary of Coca-Cola. That means its entire B Corp assessment is available to download, so it’s possible to see exactly where Innocent racked up points (92.5 in total), and where it missed them. To take one criteria, volunteering, as an example: There are seven multi-part questions pertaining to how staff volunteer, with a total of 5.5 points on offer. Innocent scored 2.8. It could boost that if, for example, a higher proportion of the staff took paid time off to volunteer (in this assessment, it was below 25%).
The scores for Danone’s subsidiaries are available to view, too. The assessments aren’t stellar. The North American subsidiary, the company’s first division to get B-Corp certified, scored 84.9 in 2018, out of a possible 200. The assessment shows multiple areas in which the Danone subsidiary missed out on points and has room for improvement. The company didn’t offer health insurance to part-time workers, for example, had only minimal caregiver leave, and paid its top-earning employees a lot more than its lowest decile. It also gave up points on environmental measures like managing greenhouse gas emissions and waste, and publicly reporting on its impact. For comparison, Patagonia, an outdoor-clothing company that’s often cited as one of the foremost B Corps, scored 151.5.
But just getting its first subsidiary over the line to gain B Corp certification was an achievement, and not one predicated on a simple box-ticking exercise. How Danone did it could provide a useful blueprint for any company aiming to follow suit.
Blueprint for a big B Corp
Company leaders who care about happy workers, good governance, or climate change might not need a lot of convincing as to why becoming a B Corp might make sense. A bigger question is: How?
It’s certainly time-consuming. The assessment for Danone’s US business is more than 200 pages. Gathering data, and making policy changes to achieve higher scores, will likely take between eight and 14 months for large companies (i.e. those with more than $100 million in revenue), according to B Labs’ estimate. Danone’s 2030 timeline is instructive, B Lab UK’s Turner says. Transforming all its subsidiaries, most of which are themselves multimillion-dollar companies, is an undertaking so big that the company doesn’t expect to complete it for another decade.
Certification is also, surely, expensive. Danone declined to put a figure on the cost of its certification efforts so far, or to estimate what it would be in the future or in total, saying only that any expenses associated with the transition are “not exclusively related to B Corp, but rather to a wider transformation journey” in line with the company’s overall vision. B Lab charges an ongoing certification fee, starting at $1,000 a year for the smallest companies and rising to $50,000 a year for companies with up to $1 billion in annual revenue. For even bigger companies, B Labs charges more, on a case-by-case basis.
But while time and expense are measurable, many people refer to the process of B-Corp certification as something other than an administrative exercise with tangible costs. Rather, they say, it is a collaborative act.
Power to the people
Blandine Stefani has been Danone’s B Corp director since 2016. She says that, faced with the monumental task of transforming every subsidiary on every continent, Danone started with a simple hack: It asked for volunteers.
The company-wide callout went to general managers, and after some put their hands up, 10 divisions were selected to pioneer the process, among them the company’s US operations—which had recently acquired WhiteWave, a US maker of organic food and plant-milks—and Danone’s Spanish dairy business.
Stefani says she was “amazed” at the energy and passiondisplayed by those who engaged with the project, including younger workers who advocated with older managers to make changes. Stefani spends her days conference-calling with managers across the world, and often travels to meet them. But her team doesn’t swoop in and overhaul operations, she says. Rather, the work of achieving the necessary scores across hundreds of B Corp criteria is parceled out, a chopped salad of responsibility in which employees across geographies, and pay grades, partake.
At B Inspired, a conference for existing and aspiring B Corps held in London in September 2019, small business founder Pippa Murray told the same story. Murray’s experience falls at the other end of the food spectrum from Danone’s. She started her nut butter business, Pip & Nut, alone in 2013, and has since grown it into a successful company with more than 20 staff, supplying major UK supermarkets. Daunted by the breadth of criteria required for B Corp certification, Murray says she tackled the problem by sharing it out, making every person on her staff responsible for one small part of it and, she says, enfranchising them in the process. (Murray was surprised onstage when Douglas Lamont, Innocent Drinks’ CEO, presented her company’s certification to her; it had just come through.)
Danone’s Faber also notes the unexpectedly passionate engagement he discovered when he attempted to enlist staff in more decision-making by gifting every employee a share. In October 2018, management sent out a survey on the company’s goals, expecting a 25% response rate. They got an 80% response rate instead, plus offers from 33,000 staff volunteering to lend extra help to the process of becoming more purpose-driven.
Ex-Danone executive Lorna Davis confirms that the engagement from Danone’s staff was exuberant. She is a former general manger for Danone’s businesses in New Zealand, India, and France, who started with the company in 1997 and was running its China arm when Danone’s global biscuit business was sold to Kraft (now Mondelez), at which point she found herself president of Kraft China. She then moved back to the US as president of biscuits North America for Mondelez, but soon realized she was seeking something very different.
“By that time I was really over the sort of classic CEO thing. I mean, I had run [Mondelez division] Nabisco, a $6 billion business in the US selling Oreos. My heart was breaking, basically,” Davis says. Faber wooed her back to Danone with the promise of driving forward the company’s purpose journey. She returned to Danone in the sci-fi-sounding role of “chief manifesto catalyst” for the B Corp transformation.
Davis says the energy for the change she was tasked with catalyzing came, in large part, from the company’s youngest employees. (She also notes, anecdotally, that across other companies she now works with toward B-Corp certification, the change-makers are often in less senior roles than one might expect, and that women are over-represented in the cohort.)
As part of a mission to build community, Danone introduced new opportunities for its employees to spend stints with international divisions, a policy that was particularly popular with younger staff interested in spending time in countries where the company has operations, like Senegal and Bangladesh. Critical to their enfranchisement, Davis says, was an office communications app, Facebook at Work (now known as Workplace by Facebook). Having a hub where workers could communicate with one another based on shared interests—whether it was a love of dogs, or a desire to transform the company structure—made the difference between a disconnected, hierarchical, traditional multinational, and one in which rank-and-file employees could have an impact on the way their company acted in the world. The purpose drivers encouraged one another, and grew strong.
“This is something that Blandine won’t tell you, but I’ll tell you,” Davis says, dangling the promise of insider knowledge paired with a frankness that an ex-employee feels at liberty to provide. Early in the B Corp process, she says, a particular regional boss at Danone didn’t buy into the changes that B Corp certification necessitated. The manager instructed the leader of one of their business units to focus on returns rather than “this ridiculous B Corp bullshit,” Davis says. That person, who was passionate about the transition, did the necessary work in secret, then presented the manager with the fulfilled criteria as a fait accompli.
“If you’re going to do this journey,” Davis says, “you need to destabilize the classic power paradigm. Because the change will not come from the top down. It comes really from the bottom up, and the sides in.”
Who’s next?
Davis says Faber continued to pay her for two years after she stopped working at Danone, simply to talk to other companies about their potential to become B Corps. (In conversation, Davis refers to Emmanuel Faber simply as “Faber” because, she says, there were “thousands of Emmanuels” at Danone, and it’s the only first name in French where the feminine—”Emmanuelle”—and masculine versions sound the same. In texts, and in person, she tends to call him Em.) Davis now describes herself on LinkedIn as an ambassador for the B Corp movement, but she isn’t remunerated for the role.
“The way that I see it now, given that I speak to many companies: I look for wherever there’s an open door, wherever there’s any momentum, and we start from there,” Davis says. Visionary leaders are one part of the puzzle, but ordinary, young workers could be even more vital. “Once you have the young people involved in an organization, and motivated, and once you have outsiders to hold you to account, you really start to see things move,” she says.
Are other big companies of Danone’s scale getting ready to bite the B Corp bullet? Davis says they certainly are, though she doesn’t want to name names. Stefani at Danone says a significant portion of her time is taken up with discussing Danone’s experience with other big companies. She, too, declined to identify names. But in a followup email, her team confirmed that interest among big companies is on the rise, in “various sectors including food industry and utilities,” and that “several have engaged to understand Danone’s journey and how it can apply to their own business.”
Since the journey to certification is long and potentially exposing, and the chance to surprise the world with the announcement of certification makes for good press, it’s understandable why large corporations are reticent to share their journeys before they reach the destination. Recently several big names have certified, including Athleta, a subsidiary of Gap Inc., in 2018; The Body Shop, with a global staff of 8,000, in September 2019; and Guardian Media Group, which publishes the Guardian newspaper, in October 2019.
Danone doesn’t seem jealous of its position as the B Corp community’s largest occupant. It convened an advisory committee, chaired by Patagonia CEO Rose Marcario, to help facilitate its own transition and that of other big companies.
B Lab UK’s Turner notes that working on Danone has been a learning experience for the certifiers, too. “A big business like Danone certifying has enabled us as B Lab, globally, to develop some much more sophisticated, fit-for-purpose processes” to help others do the same, he says.
A natural step
Faber doesn’t plan to stop when the whole of Danone is a B Corp. His vision for the transformation of capitalism is much more radical.
In September, Faber was in New York for the United Nations Climate Summit, the event where teenage activist Greta Thunberg delivered a stinging rebuke to world leaders for failing to take action on climate change. Faber’s appearance got considerably less attention; he was there to announce the formation of a 19-company consortium pledging to protect the planet’s biodiversity through sustainable agriculture and a reduction in deforestation.
At the UN event, in a roomful of Quartz journalists he spoke with in New York later that week, and in multiple other arenas, Faber has talked seriously about a complete transformation of the way we produce food, moving away from the use of chemicals to crop and animal cultivation based on deep knowledge of soil, ecology, and the climate. He thinks we should eat less meat, and rebalance our dietsbased on the planet’s future health, as well as our own (which in some cases might mean eating less dairy, Danone’s core business, and definitely means cutting down on sugar, which Danone uses in large quantities). He rejects the use of genetic modification in food production, and enraged a segment of the US food market when Danone’s North American business made the pledge in 2016 to become GMO-free.
Becoming a B Corp was a natural step for a company with values like Danone’s, Faber insists. It’s a good line, but given how radical Faber’s positions are on many aspects of the business, it may also be true.
For other companies, indeed whole other industries, it’s perhaps not so easy. B Corp certification isn’t realistically open to every corporation. An oil major—for example—would struggle to meet the necessary sustainability criteria. Having said that, energy as an industry is certainly represented in the B Corp community (for example with the UK’s renewable energy company Bulb) as are a host of industries we might not immediately connect with ethics and transparency, including finance.
Crisis point
Capitalism has been popular in part, it could be argued, because it is simple: Make money, and that in itself will ensure that other needs are met, because money-makers pay taxes, for example, and create employment. Where it falls down is if we admit, as we are increasingly beginning to do, that the world’s resources are finite (only so much coal to burn), and that making money for one group can fundamentally damage the happiness of another (think sweatshops in the garment industry.)
Nettled by the climate-related drive to buy less, or to shift consumption habits to encourage higher-quality goods and more thoughtful purchasing, Karl-Johan Persson, the CEO of H&M, one of the world’s biggest clothing brands, recently lashed out against anti-consumerism, telling Bloomberg in October that people flying less and limiting their consumption of cheap clothing could cause “terrible social consequences.” To Persson, it’s a matter of prioritizing between climate goals and reducing poverty through job creation. To others, his statement is the frightened cry of a business built on the fiction of unlimited resources and cheap labor that now finds itself in structural decline.
The evolution of the B Corp movement, with its evangelists and its detractors, is indicative of this liminal time. Amazon, a holdout among big tech companies in the race to mitigating its impact on the planet, was essentially forced by its own staff to finally commit to a timeline for reducing its carbon emissions to net zero.
As the imperative grows stronger for companies at least to express concern for the communities around them—and to acknowledge the business case for happier workers, non-exploitative supply chains, and healthy customers—it could become less clear who are the true change-makers, and who is purpose-washing for the sake of better optics. Increasingly we’ll have to ask of companies, what are they really doing to try and make the world a better place, or at least stop it getting worse? How can they prove they are doing it? And is it enough?
Right now, B Corp certification is one of the most rigorous ways for businesses to put themselves through a gauntlet and emerge—it is to be hoped—as companies that are better governed, more happily staffed, and less environmentally destructive.
If B Corps continue to grow, with more huge additions like Danone, the governing body will have an increasing responsibility to make sure its standards don’t slip. And CEOs like Faber will have a real chance at talking credibly about the sustainability of modern capitalism.
In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring concepts shaking up today’s world. DeepMind embraces the opportunities of relentless change, the incredible latent power of artificial intelligence, and the possibilities of technology to create a different, also better, future for humanity. In the book, I explore the stories of many of the world’s most fascinating businesses and innovations right now, and develop 49 codes that help you redefine the future of your business, and yourself.
The Future Code of DeepMind
The ability to process huge amounts of data at incredible speeds, to learn through repetitive process, and to harness the strength and agility of robotics challenge many of the ways in which humans used to excel.
The game of chess has long served as a benchmark for artificial intelligence researchers. John McCarthy, who coined the term “artificial intelligence” in the early 1950s, once referred to chess as “the Drosophilia of AI” comparing it to the way in which the fruit fly is used to understand genetics.
In 1996, IBM’s Deep Blue supercomputer embarked upon a series of chess games against Garry Kasparov, the world champion. Deep Blue eventually beat Kasparov, marking the first time a machine had defeated a world champion.
Within a few years computing technology was consistently beating chess grandmasters.
However, AI developers knew that they needed greater challenges, searching for more complex games to test their increasingly sophisticated algorithms. They turned their attention to the ancient Chinese strategy game of Go, which is both deceptively simple to play, yet extraordinarily complex to master.
The game was invented in China more than 2,500 years ago and is believed to be the oldest board game continuously played to the present day. It was considered one of the four essential arts of the cultured aristocratic Chinese. Go has a larger board than chess, a 19×19 grid of lines containing 361 points, and therefore with many more alternatives to consider per move.
It took another decade of machine learning development until scientists were able to create a truly competitive AI-based Go player.
In 2014, a team at London-based Deepmind Technologies started working on a deep learning neural network called AlphaGo. Two years later a mysterious online Go player named “Master” appeared on the popular Asian game platform Tygem. The mysterious player dominated games against many world champions.
Eventually it was confirmed that the “master” was in fact created by DeepMind, since acquired by Google, and now a subsidiary of Alphabet.
The master was replaced by a grandmaster in 2017. AlphaZero, an enhanced version of the original system, embraced an even more sophisticated algorithm designed to learn as it progressed through games. The system simply plays against itself, over and over, and learns how to master whatever game it has been programmed to work with. Searching through 80,000 positions, a fraction of what other predictive software had used, it had perfected the game in 24 hours using a AI-type of intuition.
AlphaZero achieved two things: autonomy from humans, and superhuman ability. Scientist and futurist James Lovelock calls this “the novacene”, translated as “the new new” in Latin and Greek, where a new form of intelligent life emerges from a human-initiated AI-based machine into one which no longer requires human intervention.
He calls AlphaZero, and other such beings, cyborgs.
In his book Novacene: The Coming Age of Hyperintelligence, Lovelock suggests that AI-based entities can think and act 10,000 times faster than humans (and to put that in perspective, that humans can think and act 10,000 times faster than plants). He then reflects that maybe AI-based life would be rather boring, considering that a flight to Australia using physical transport would currently take 3000 AI-based years.
The real point of a cyborg, a term first coined by Austria’s Manfred Clynes to describe an organism as self-sufficient as a human but made of engineered materials, is that it is able to improve and replicate itself.
Which quickly takes us to a future beyond what Hungarian John Van Neumann called “the singularity”, the point at which technological growth becomes uncontrollable and irreversible. Both physicist Stephen Hawking and entrepreneur Elon Musk have warned of the profound implication of autonomous AI.
Of course, we already have many devices which learn and improve continually. Take Google Maps, for example, which constantly learns from all its users about realtime traffic situations, and the more users it has the better the information becomes. Or consider Google Nest, an intelligent thermostat which takes control of the temperature in our homes. For now, they are useful tools, to help us live better.
In the meantime, DeepMind continues to explore the future. StarCraft, considered to be one of the most challenging Real-Time Strategy (RTS) games and one of the longest-played esports of all time, has emerged by consensus as the latest “grand challenge” for AI researchers around the world.
In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring business leaders, shaking up today’s world. He embraces the opportunities of relentless change, the power of disruptive technologies, and the courage to create a better future in their own vision. In the book, I explore the stories of many of the world’s most fascinating leaders right now, and develop 49 codes that help you redefine the future of your business, and yourself.
The Leadership Code of Ali Parsa
Ali Parsa is on a mission to reinvent the world’s access to healthcare. Maybe now, at a time of global emergency, when coronavirus is putting more pressure on every traditional healthcare system, and people need answers fast and remotely, his time has come.
“Two-and-a-half thousand years ago” he says “you would go to the square in Babylon. It was called the Square of the Sick, I think, and citizens, if they’d come across your ailment, would share how they’d recovered. As a result of that simple peer-to-peer model, it has been estimated that Babylon had the longest life expectancy of any city in the world.”
Babylon was the capital of Babylonia, a kingdom in ancient Mesopotamia between 1800-600 BC, built along the banks of the Euphrates river, about 85km south of modern day Baghdad.
Parsa himself, grew up in nearby Iran, then escaped as a lone teenager, trekking through Afghanistan and eventually to Europe, and settling as a refugee in London. Having taught himself English and maths, he won a scholarship to study for a a PdD in engineering, whilst also running an events business called Victorian and Gilan which he later sold. He found his way into banking, as head of technology investment for Goldman Sachs.
Parsa was much more interested in people than money, and now a father, saw huge opportunities in healthcare for the use of new technologies. In 2004 he co-founded Circle Health, driven by what he saw as a terrible state-run healthcare. He secured £500m from Lehman Brothers to create a chain of luxury private hospitals designed by famous architects and run by hoteliers. However when Lehman’s crashed, so did his dream.
He realised that the biggest difference he could make was not in the hospital experience itself, but in what happened before and after. He set out to create “the Google” of healthcare information. It took the form of an AI-driven app through which people could diagnose illnesses through simple questions, and if required gain instant video consultations with doctors.
Babylon, based in London, now employs over 750 doctors, scientists, engineers and data analysts. They offer a subscription-based service to individuals wanting faster, on-demand health advice. However a deal with the UK’s NHS to create a version of Babylon’s service called “GP at Hand” has dramatically scaled-up the service, with similar partnerships internationally. For the NHS it creates a faster, more personal service to patients, and relieves the pressure on physical resources.
Parsa sees Babylon as “the biggest doctor’s brain in the world”, and loves to show how his AI-based analytics can more effectively diagnose patient’s needs than a real person. His real ambition is to create personal and predictive healthcare, using a range of wearable sensors that can monitor individual health, and take action before its ever needed.
Distinguishing between strategic shifts and current fads is not easy. The easiest way to cut through hype is to remember that trends are driven by fundamental shifts in demographics, the economy, technology, politics and social movements. They are new manifestations representing our fundamental human needs. Trends form steadily over many years, and they do not necessarily follow a linear path. Fads are much more transient.
Strategic trends share a set of conspicuous, universal features, which Amy Webb in her book The Signals Are Talking: Why Today’s Fringe Is Tomorrow’s Mainstream calls the Four Laws of Tech Trends:
1. Trends are driven by basic human needs.
2. Trends are timely, but they persist.
3. Trends are the convergence of weak signals over time.
4. Trends evolve as they emerge.
Typically all four features are present in an authentic strategic trend.
Disruptions drive trends
Disruption usually stems from influential sources of macro change. It is a way of understanding where disruption is coming from and where it’s headed next. The sources of macro change represent external uncertainties—factors that broadly affect business, governing and society. They can skew positive, neutral and negative.
Wealth Distribution: The distribution of income across a population’s house- holds, the concentration of assets in various communities, the ability for individuals to move up from their existing financial circumstances and the gap between the top and bottom brackets within an economy.
Education: Access and quality of primary, secondary, and post-secondary education, workforce training, trade apprentice- ships, certification programs, the ways in which people are learning and the tools they’re using and what people are interested in studying.
Infrastructure: Physical, organizational, and digital structures needed for society to operate (bridges, power grids, roads, wifi towers, closed-circuit security cameras), the ways in which the infrastructure of a city, state or country might impact another’s.
Government: Local, state, national, and international governing bodies, their planning cycles, their elections and the regulatory decisions they make.
Geopolitics: The relationships between the leaders, militaries and governments of different countries, the risk faced by investors, companies and elected leaders in response to regulatory, economic or military actions
Economy: Shifts in standard macroeconomic and microeconomic factors.
Public Health: Changes in the health and behavior of a community’s population in response to lifestyles, popular culture, disease, government regulation, warfare or conflict and religious beliefs.
Demographics: Observing how birth and death rates, income, population density, human migration, disease and other dynamics are shifting communities.
Environment: Changes to the natural world or to specific geographic areas, including extreme weather events, climate fluctuations, sea level rise, drought, high or low temperatures and more. (We include agricultural production in this category.)
Media and Telecommunications: All of the ways in which we send and receive information and learn about the world. This includes social networks, news organizations, digital platforms, video streaming services, gaming and e-sports systems, 5G and the boundless other ways in which we connect with each other.
Technology: Not an isolated source of macro change, but rather, as the connective tissue linking business, government and society. For that reason, we always look for emerging tech developments, as well as tech signals within the other sources of change.
Mapping the future
The Future Today Institute uses a Time Cone to represent years and certainty on the axes, and then a matrix to translate trends into implications for organisations and how they can embrace them depending on their tangibility:
With the benefit of both hindsight and strategic foresight, frameworks such as these identify risk and highlight the best emerging opportunities. The challenge for business leaders is to make connections between emerging trends, business and society, especially when there is such a huge mass of technologies and trends that will shape the world of tomorrow.
Tech trends that matter
You can download the Future Today Institutes fabulous new 386-page report here: Tech Trends 2020.
Some of the big trends emerging in the report include
AI systems that can be trained in hours rather than weeks
Widespread availability of algorithmically-traded funds
Off-planet human civilization
Bioengineered animals, plant-based proteins and indoor robot-powered farms
Autonomous cars, trucks, ships and fighter jets
Exascale computing
Quantum computing
Functional 5G networks
Here is a summary of some of the more interesting insights:
#1: The Synthetic Decade.
From digital twins to engineered DNA to plant-based pork sausages, a deep push to develop synthetic versions of life is already underway. We will look back on the 2020s as an era that brought us synthetic media, such as AI-generated characters whose storylines we follow on social media and humanlike virtu-
al assistants who make our appointments and screen our calls. Soon, we will produce “designer” molecules in a range of host cells on demand and at scale, which will lead to transformational improvements in vaccine production, tissue production and medical treatments. Scientists will start to build entire human chromosomes, and they will design programmable proteins. Foods made from synthetic techniques rather than artificial ingredients will make their way to the mainstream, and you’ll have a wide array of choices: humanely engineered foie gras, flora-derived ice cream and molecular whiskey made in a lab. Every indus- try will be impacted as our synthetic decade brings new business opportunities and strategic risks. Companies will need to ask challenging ethical questions and examine the security risks for synthetic material in order to earn public acceptance, government approvals and commercial appeal.
#2: Augmented hearing and sight.
While you shouldn’t expect to see everyone wearing smart glasses by this time next year, you will certainly start to notice some important developments throughout 2020, beginning with audio augmented reality (or AAR). Think of it as augmented reality for audio. Smart earbuds and glasses will digitally overlay audio (like directions, notifications, and verbal descriptions of what — or who — you’re looking at) without others hearing and while you continue to hear what’s going on around you. Not only will AAR help runners stay safe, it offers a sophis- ticated alternative to traditional hearing aids. Smart glasses won’t look like the minimalistic Google Glass headband, but rather a stylish pair of frames you’d find at your local optometrist’s office. Google, Amazon, Apple, Microsoft and Face- book all have connected systems on their product roadmaps. The connected glasses and AAR ecosystem offer tremendous new business opportunities—and could signal disruption to longtime market leaders in frames, prescription lens- es, hearing aids and headphones.
#3: AI-as-a-Service and Data-as-a-Service
The future of digital transformation is rooted in two key areas: AI-as-a-Service and Data-as-a-Service. Microsoft, IBM, Google, Amazon, Facebook and Apple are all developing new services and tools ranging from robotic process automation to offering GPUs (graphics processing unit) in the cloud. Amazon’s upcoming project, AWS For Everyone—a low-code/no-code platform built to enable anyone to create business applications using their company data—will be a huge differentiator when it launches.
#4: China’s new world order
The growth of China’s economy might be slowing, but it would be a mistake to assume that the People’s Republic of China has lost its influence. In the past two decades, China overtook the U.S. as the world’s dominant exporter on every continent with the exception of North America. Its imports matter, too: This year China should surpass the U.S. and become the world’s largest movie mar- ket, with a projected $10 billion in revenue. China has a rapidly-expanding middle class, an educated and trained workforce and a government that executes on long-term plans. China will continue to assert prolific dominance in 2020 across multiple areas: diplomacy throughout Southeast Asia, Africa, Latin and South America and Europe; the development of critical digital infrastructure; artificial intelligence; data collection and scoring; bioengineering and space.
#5: Home and office automation
An Alexa in every pot and a self-driving car in every garage? Nearly 100 years ago Herbert Hoover promised Americans they would prosper under his presidency: a chicken in every pot, and a car in every garage. Today, AI-powered digital assistants, home security systems and voice-controlled microwaves are being manufactured—and priced—for the masses. Robots used to be the stuff of science fiction, but this year major appliance manufacturers, component makers, and of course, the big tech companies will make compelling arguments for why our homes and offices should be outfitted with sensors, cameras and microphones. Next-generation network infrastructure should speed adoption. The global market could reach $214 billion by 2025. Which company’s operating system controls all those devices, and what happens to the data being collected, will spark public debate.
#6: Everyone is being scored
In order for our automated systems to work, they need both our data and a framework for making decisions. We’re shedding data just by virtue of being alive. From our social media posts, to our unique biology (posture, bone and capillary structures, vocal pitch and cadence), to our credit card debt, to our travel habits, thousands of data points are analysed to score us. Automated systems use our scores to make decisions for or about us, whether it’s what price to show us on e-commerce sites or if we might pose a security risk at a football game. We anticipate that in the coming year, regulators will take a deeper inter- est in scoring.
#7: The rise of fear
In the 2010s Facebook, Instagram, Snapchat, Reddit, Foursquare and Twitter caused a “fear of missing out.” Those very same networks (save for the now-defunct mobile social app Foursquare) are being used for intentional—and some- times unwitting—scaremongering. On Facebook, Baltimore Mayor Bernard “Jack” Young helped propagate a wild—and totally false—story on Facebook about a white van abducting girls for human trafficking and for selling body parts. Numerous times, President Donald Trump has used Twitter to stoke fear, telling the public about armed “large [sic] Caravans” that were “invading” America. On Twitter, he has publicly threatened the leaders of other countries: “North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!” on January 2, 2018. Social media posts like these are often repeated at rallies and protests, which only serve to amplify our fear. The Anti-Defamation League discovered a 226% increase in acts of vandalism and hate crimes in the counties hosting Trump rallies. We’re continually told that we need protection: from unsafe countries, people and even our neighbors. Fear is good for business. Amazon bought smart doorbell company Ring for $1 billion, and it now has lucrative partnerships with more than 400 U.S. police departments to share recognition tech and surveil- lance video from users’ homes.
#8: Nothing is forgotten
After a decade of posting photos, videos and written messages on social media, it’s now clear that our recent histories will persist far into the future. It isn’t possible to truly delete or erase our pasts. A centerpiece of the European Union’s landmark internet laws, the “right to be forgotten,” emerged as a stan- dard intended to force search engines to delete links to personal information if it wasn’t in the public interest. But in 2019, the European Court of Justice ruled in Google’s favor, making it much harder for people to request that negative, pri- vate or misleading information about them is removed from internet searches. A Google search team member put it more bluntly: “We’re not a truth engine.”
#9: The new trust economy
We will soon see a host of new tools built to engender and ensure—but also ma- nipulate—our trust. In the wake of deepfake videos and other manipulated con- tent, a new ecosystem devoted to trust is in the process of being formed. There’s a lot at stake: After hearing an AI fake his CEO’s voice on the phone, a gullible employee transferred $243,000 to a scammer. In the coming year, sentinel surveillance systems will algorithmically detect manipulated content—for a fee. Meanwhile, governments and interest groups around the world will try to shape the future development of A.I. and blockchain technology, proposing legislation and “bill of rights”manifestos.
The Future of AI
Artificial intelligence represents the third era of computing, one that could usher in a new period of productivity and prosperity for all.
It has potential to act as a force multiplier for good, helping to address humanity’s most complex challenges: how to mitigate climate change, how to increase the global food supply, how to develop safer infrastructure, how to manage cyberse- curity threats and how to diagnose and eradicate diseases.
However, AI also carries risks: gender, race and ethnic bias continues to negatively influence the criminal justice system; countries differ in their regulatory approaches; it enables the creation and spread of fake news and misinformation; it threatens privacy and security; and it will inevitably displace swaths of the workforce. There is no central agreement on how AI should develop during the next several decades.
In its most basic form, artificial intelligence is a system that makes autonomous decisions. AI is a branch of computer science in which computers are programmed to do things that normally require human intelligence. This includes learning, reasoning, problem solving, understanding language and perceiving a situation or environment. AI is an extremely large, broad field, which uses its own computer languages and relies on computer networks modelled on our human brains.
The global AI market should grow 20% annually between 2020 and 2024, while global economic growth generated by AI could reach $16 trillion by the end of this decade.
Weak and Strong AI
There are two kinds of AI: weak (or “narrow”) and strong (or “general”). Narrow AI systems make decisions within very narrow parameters at the same level as a human or better, and we use them all day long without even realizing it. The anti-lock brakes in your car, the spam filter and autocom- plete functions in your email and the fraud detection that authenticates you as you make a credit card purchase— these are all examples of artificial narrow intelligence. Artificial general intelligence (AGI) de- scribes systems capable of decision-mak- ing outside of narrow specialties. Dolores in Westworld, the Samantha operating system in Her, and the H.A.L. supercomputer from 2001: A Space Odyssey are anthropomor- phized representations of AGI—but the ac- tual technology doesn’t necessarily require humanlike appearances or voices.
There is no single standard that marks the distinction between weak and strong AI.
This is problematic for researchers covering AI developments and for managers who must make decisions about AI.
In fact, we have already started to see real-world examples of functioning AGI. In 2017 researchers at DeepMind, a lab owned by the same parent company as Google, announced that A.I. had taught itself how to play chess, shogi (a Japanese version of chess) and Go (an abstract strategy board game)—all without any human intervention. The system, named AlphaZero, quickly became the strongest player in history for each game. The team has been publishing important discoveries at an impressively fast pace. Last year, the DeepMind team taught AI agents to play complex games, such as the capture the flag “game mode” inside the video game Quake III. They, like humans, had learned skills specific to the game as well as when and how to collabo- rate with other teammates. The A.I. agents had matched human player ability using reinforcement learning, in which machines learn not unlike we do—by trial and error.
While we haven’t seen an anthropomorphic AI walk out of DeepMind’s lab, we should consider these projects as part of a long transition between the narrow AI of today and the strong AI of tomorrow.
Neural Networks and Deep Neural Networks
A neural network is the part of a system in which information is sent and received, and a program is the set of meticulous instruc- tions that tell a system precisely what to do so that it will accomplish a specific task. How you want the computer to get from start to finish—essentially, a set of rules—is the “algorithm.”
A deep neural network is one that has many hidden layers. There’s no set number of layers required to make a network “deep.” Deep neural networks tend to work better and are more powerful than traditional neural networks (which can be recurrent or feedforward).
Machine Learning and Deep Learning
AI pioneer Arthur Samuel popularized the idea of machine learning in 1959, explain- ing how computers could learn without being explicitly programmed. This would mean developing an algorithm that could someday extract patterns from data sets and use those patterns to predict and make real-time decisions automatically. It took many years for reality to catch up with Samuel’s idea, but today machine learning is a primary driver of growth in AI.
Deep learning is a relatively new branch of machine learning. Programmers use spe- cial deep learning algorithms alongside a corpus of data—typically many terabytes of text, images, videos, speech and the like. Often, these systems are trained to learn on their own, and they can sort through a variety of unstructured data, whether it’s making sense of typed text in documents or audio clips or video. In practical terms, this means that more and more human processes will be automated, including the writing of software, which computers will soon start to do themselves.
Nine big tech companies—six American, and three Chinese—overwhelmingly drive the future of artificial intelligence. In the USA, it’s the G-MAFIA: Google, Microsoft, Amazon, Facebook, IBM and Apple. In China it’s the BAT: Baidu, Alibaba and Tencent. Those nine companies drive the majority of research, funding, government involvement and consumer-grade applications of A.I. University researchers and labs rely on these companies for data, tools and fund- ing. The Big Nine AI companies also wield huge influence over AI mergers and acquisitions, funding AI startups and supporting the next generation of developers.
In 2015 Bill Gates warned in a TED Talk, that the biggest risk to humanity was not a global conflict, climate change, or maybe even an asteroid hitting Earth. He said it was the threat of a new global pandemic.
In recent years we have watched as the megatrends of today’s world have massed in ever greater power, and their combined effects creating diverse and increasingly extreme scenarios for the future.
Climate change drives global warming, alongside diminishing biodiversity and changing coexistence of animals and humans. Mass urbanisation brings huge populations together in small spaces, whilst globalisation creates huge intermingling of people for travel and work.
The Impact of COVID-19
As humans have spread across the world, so have infectious diseases. Even in this modern era, outbreaks are continuous though not every outbreak reaches pandemic level as the current coronavirus (COVID-19) has.
Pan·dem·ic /panˈdemik/ (of a disease) prevalent over a whole country or the world.
COVID-19 is one example of the changes unleashed. For which we are clearly demonstrating that we are unprepared, not only in lack of healthcare response, but the chaotic thinking of society too.
Whilst China acted rapidly once it realised the serious epidemic in its Wuhan province, governments like the UK’s have run around in denial, and then playing with fanciful theories of behavioural science, rather than trying to save lives. At the same time we see an incredible example of scientists, health and pharma experts around the world collaborating on a high-speed innovation journey to find a vaccine.
COVID-19 has gripped the world within weeks, as cities then entire countries faced lockdown, and global travel bans were quickly followed by plunging stock markets. We also saw new behaviours emerge rapidly, from e-Health such as smartphone video clinics treating patients, to a rapid growth of e-Learning and remote working become the norm.
A new infographic by Visual Capitalist outlines some of history’s most deadly pandemics, from the Antonine Plague to the current COVID-19 pandemic:
A Timeline of Historical Pandemics
Disease and illnesses have plagued humanity since the earliest days, our mortal flaw. However, it was not until the marked shift to agrarian communities that the scale and spread of these diseases increased dramatically.
Widespread trade created new opportunities for human and animal interactions that sped up such epidemics. Malaria, tuberculosis, leprosy, influenza, smallpox, and others first appeared during these early years.
The more civilized humans became – with larger cities, more exotic trade routes, and increased contact with different populations of people, animals, and ecosystems – the more likely pandemics would occur.
Here are some of the major pandemics that have occurred over time:
Despite the persistence of disease and pandemics throughout history, there’s one consistent trend over time – a gradual reduction in the death rate. Healthcare improvements and understanding the factors that incubate pandemics have been powerful tools in mitigating their impact.
Wrath of the Gods
In many ancient societies, people believed that spirits and gods inflicted disease and destruction upon those that deserved their wrath. This unscientific perception often led to disastrous responses that resulted in the deaths of thousands, if not millions.
In the case of Justinian’s plague, the Byzantine historian Procopius of Caesarea traced the origins of the plague (the Yersinia pestis bacteria) to China and northeast India, via land and sea trade routes to Egypt where it entered the Byzantine Empire through Mediterranean ports.
Despite his apparent knowledge of the role geography and trade played in this spread, Procopius laid blame for the outbreak on the Emperor Justinian, declaring him to be either a devil, or invoking God’s punishment for his evil ways. Some historians found that this event could have dashed Emperor Justinian’s efforts to reunite the Western and Eastern remnants of the Roman Empire, and marked the beginning of the Dark Ages.
Luckily, humanity’s understanding of the causes of disease has improved, and this is resulting in a drastic improvement in the response to modern pandemics, albeit slow and incomplete.
Importing Disease
The practice of quarantine began during the 14th century, in an effort to protect coastal cities from plague epidemics. Cautious port authorities required ships arriving in Venice from infected ports to sit at anchor for 40 days before landing — the origin of the word quarantine from the Italian “quaranta giorni”, or 40 days.
One of the first instances of relying on geography and statistical analysis was in mid-19th century London, during a cholera outbreak. In 1854, Dr. John Snow came to the conclusion that cholera was spreading via tainted water and decided to display neighborhood mortality data directly on a map. This method revealed a cluster of cases around a specific pump from which people were drawing their water from.
While the interactions created through trade and urban life play a pivotal role, it is also the virulent nature of particular diseases that indicate the trajectory of a pandemic.
Tracking Infectiousness
Scientists use a basic measure to track the infectiousness of a disease called the reproduction number — also known as R0 or “R naught.” This number tells us how many susceptible people, on average, each sick person will in turn infect.
Measles tops the list, being the most contagious with a R0 range of 12-18. This means a single person can infect, on average, 12 to 18 people in an unvaccinated population.
While measles may be the most virulent, vaccination efforts and herd immunity can curb its spread. The more people are immune to a disease, the less likely it is to proliferate, making vaccinations critical to prevent the resurgence of known and treatable diseases.
It’s hard to calculate and forecast the true impact of COVID-19, as the outbreak is still ongoing and researchers are still learning about this new form of coronavirus.
Urbanization and the Spread of Disease
We arrive at where we began, with rising global connections and interactions as a driving force behind pandemics. From small hunting and gathering tribes to the metropolis, humanity’s reliance on one another has also sparked opportunities for disease to spread.
Urbanization in the developing world is bringing more and more rural residents into denser neighborhoods, while population increases are putting greater pressure on the environment. At the same time, passenger air traffic nearly doubled in the past decade. These macro trends are having a profound impact on the spread of infectious disease.
As organizations and governments around the world ask for citizens to practice social distancing to help reduce the rate of infection, the digital world is allowing people to maintain connections and commerce like never before.
Over the past 30 years, the world has seen huge social improvements and technological progress. We have experienced unprecedented economic growth and lifted hundreds of millions of people out of poverty. We’re benefiting from a life-changing digital revolution that could help solve our most pressing social and environmental challenges. Yet despite these successes, our current model of development is deeply flawed.
Signs of its failure and imperfections in today’s markets are everywhere. Natural disasters triggered by climate change have doubled in frequency since the 1980s. Violence and armed conflict cost the world the equivalent of nine percent of GDP in 2014, while lost biodiversity and ecosystem damage cost an estimated three percent. We continue to invest in high-carbon infrastructure at a rate that could commit us to irreversible, immensely damaging climate change. Social inequality and youth unemployment is worsening in countries across the world, while on average women are still paid 25% less than men for comparable work.
Median real wages have been stagnant in developed economies since the 1980s, generating deep anxiety about the impact of automation on both service and manufacturing jobs and opposition to more globalisation. Real interest rates are historically low, even negative, in several major economies, while total debt remains uncomfortably high. Economic views lurch unpredictably between techno-optimism and political pessimism.
The resulting uncertainty makes it hard for business leaders to see the way ahead. Rather than commit to longer-term investments, many companies are treading water – sitting on cash, buying back shares, paying high dividends. The latest global report on trust in business from Edelman shows a double-digit decline in the credibility of CEOs in 80 percent of countries.
What else can business leaders do?
There is a positive alternative: setting business strategy and transforming markets in line with the UN Sustainable Development Goals by exploring the impact on business of achieving these 17 objectives, known as the Global Goals, which UN member states agreed to, initially called Agenda 2030, in September 2015. Nations committed to focus their policies towards achieving the Global Goals.
Achieving the Global Goals would create a world that is comprehensively sustainable: socially fair; environmentally secure; economically prosperous; inclusive; and more predictable. They provide a viable model for long-term growth, as long as businesses move towards them together. The goals are designed to interact, so progress on them all will have much more impact than achieving only some. Of course, the results will not be heaven on earth; there will be many practical challenges. But the world would undoubtedly be on a better, more resilient path. We could be building an economy of abundance.
These are results that business leaders will surely support. However, they are less likely to feel responsible for delivering them: one survey shows that half the business community think this is government territory.
However business really needs the Global Goals: they offer a compelling growth strategy for individual businesses, for business generally and for the world economy. Second, the Global Goals really need business: unless private companies seize the market opportunities they open up and advance progress on the whole Global Goals package, the abundance they offer won’t materialise.
The challenge for every business leader is to embrace the Global Goals for Sustainable Development into its core growth strategies, value chain operations and policy positions. In 2017 the Business & Sustainable Development Commission brought together business leaders seeking to define the business case for action.
Achieving the Global Goals, they say, opens up $12 trillion of market opportunities in the four economic systems examined by the Commission. These are food and agriculture, cities, energy and materials, and health and well-being. They represent around 60 percent of the real economy and are critical to delivering the Global Goals. To capture these opportunities in full, businesses need to pursue social and environmental sustainability as avidly as they pursue market share and shareholder value. If a critical mass of companies joins us in doing this now, together we will become an unstoppable force. If they don’t, the costs and uncertainty of unsustainable development could swell until there is no viable world in which to do business.
The business logic for sustainable development is that core strategy gets much stronger as the world achieves the Global Goals.
Achieving the Global Goals in just four economic systems could open 60 market “hot spots” worth an estimated $12 trillion by 2030 in business savings and revenue. The total economic prize from implementing the Global Goals could be 2-3 times bigger, assuming that the benefits are captured across the whole economy and accompanied by much higher labour and resource productivity. That’s a fair assumption. Consider that achieving the single goal of gender equality could contribute up to $28 trillion to global GDP by 2025, according to one estimate. The overall prize is enormous.
In 2019, 17 of the world’s leading companies came together as the The Business Avengers to better define the role that business can play and is playing in delivering the Global Goals throughout 2019 and 2020.
Each company represented one SDG in launching the campaign, whilst communicating internally and externally the importance of the SDGs overall, the opportunities that they represent, and the work that they are doing to help achieve them.
The campaign, supported by the World Business Council for Sustainable Development, The B Team,the International Chamber of Commerce and the World Benchmarking Alliance will be dedicated to driving awareness, collaboration and action from the private sector towards achieving the Global Goals by 2030. The Business Avengers include ARM, Coca Cola, Diageo, Google, Mastercard, Nike, Mars, Microsoft, SAP, Salesforce and Unilever.
They argue that the Global Goals cannot be achieved without businesses – through their core business, financial commitments, employee networks, consumer facing platforms and high-level influence they will play a pivotal role in accelerating progress. And that the goals are intrinsically linked to the future success and flourishing of organisations and businesses around the world.
A healthier, more peaceful, and more prosperous world matters to all of us. Every organisation and every person can play a role in achieving this future. The WBCSD linked with Futerra to create the Good Life Goals which are a set of personal lifestyle actions that people can take to help support the SDGs.
Example of how CEMEX has embraced the SDGs
CEMEX, the global cement business based in Mexico City, developed a Responsible Business Strategy that seeks to understand stakeholder expectations by managing impact and creating value through three priorities:
Design and implement inclusive business models with social impact,
Implement sustainable community engagement plans to improve quality of life,
Design and co-create functional responsible business practices within our operation and with our value chain.
Fernando Gonzalez, the CEO articulated the company’s commitment to the 2030 agenda in 2015 saying “Our social initiatives aim to make cities and communities more inclusive, safe, resilient, and sustainable. By building strong, high-quality infrastructure, undertaking actions to combat climate change, and offering sustainable products and solutions, we contribute to the UN Global Compact’s Sustainable Development Goals and reinforce our commitment to building a better future.”
“We execute a global multi-stakeholder materiality assessment every 3-4 year, which we have taken into account to prioritize the 11 out of the 17 SDGs to which CEMEX contributes directly. SDGs 9 and 11, are particularly more related to our core business. Through the launch of various awareness activities and pilots, we aim to gather social intelligence that helps us inform our business decision-making and generate lasting impacts. The risk of inaction is simply too large, given that a growing number of investors and analysts agree that leading environmental, social and governance (ESG) practices can generate higher profitability and may be better long-term investments.
Executives were asked to take the “SDG challenge” and write a postcard to themselves stating what action they would take to be an “SDG mover”. These postcards will be sent back by the end of the year to remind them of the commitment they made to themselves to contribute to the SDG from their day to day responsibilities. CEMEX’s Integrated Report also guides readers on how the SDGs are embedded across various functions, and throughout this year we look to better understand what we measure in each geography in which we operate. The tracking of the SDG progress is supported by specific KPI’s.
Here is how CEMEX aligned itself to each SDG where relevant:
Are we making progress?
The 17 SDGs are defined in more detail through a framework of 169 SDG targets. Progress towards these targets is agreed to be tracked by 232 unique indicators. You can see a fabulous online tracker at Our World In Data, a resource created by Hannah Ritchie and Max Roser and run by the University of Oxford.
What can business do now?
The Business Avengers have created a Business Guide to help business leaders understand the actions you can take to support the Global Goals. Answer the questions and you’ll be guided to the right resources for you. They also recommend these steps:
Step 1: Your Company … Assess the impact of your company against the seventeen SDGs, and identify related risks and opportunities across your entire value chain.
Step 2: Your Leaders… Hold a meeting of the board (or the executive management team) to set goals and targets specific to your company that align with sustainable development.
Step 3: Your Shareholders … Tell shareholders and other stakeholders the goals your company has set to contribute to the SDGs and progress made, also analysts and other influencers.
Step 4: Your Employees … Engage all your employees in advancing the Goals through their own work and distribute responsibilities across the entire organisation for achieving progress.
Step 5: Your Customers … Show your commitment by including SDG education and branding in your products, communication materials, and annual report.
Over the last 20 years, Alex Osterwalder and Yves Pigneur have been dedicated to a single mission: how to help companies continuously reinvent themselves. They call themselves “the plumbers of business”.
Alex and Yves joined me at the recent European Business Forum in a highly entertaining and interactive innovation lab for 500 business leaders. They make an interesting duo. Alex is the performer, whilst Yves is the impresario – an evolution of their earlier days when Alex was the PhD student, and Yves his teacher at the University of Lausanne.
In preparing for the event, I had a number of Skype calls with Alex, in his Swiss mountain home. It looked more like a nuclear bunker, with plain concrete walls, and a small window showing the snowy mountains outside. In the centre was Alex at his desk, surrounded by 3 huge screens, with his headphones on. It looked like Strategyzer‘s mission control room.
On the walls were hundreds of yellow Post-It notes, plotting out the new book – lots of keywords, diagrams, arrows, connections – although the Skype camera kept falling to the floor where he was surrounded by weightlifting equipment. I wasn’t sure whether “invincible” was more an aspiration for business leaders reading the new book, or for himself.
They dedicate their work to designing better tools, using the power of information design, to create deceptively simple but incredibly useful templates for business to think, plan and execute. Most famously they created the Business Model Canvas.
Now they are going further – to consider not just business design, but transformation, and relentless transformation – with a fabulous new book, The Invincible Company.
Here’s a photo from Yves’ early notebook as they thought through how to visualise the challenges of these three areas:
The book combines their focus on business models with their new approach to innovation portfolios, which are key to the long-term success of any business. It becomes “invincible” because it builds a whole series of great ideas, innovations and business models that ensure its success today, and into the future. Alex and Yves believe there are three crucial areas that every business leader needs to consider in order to remain relevant and prosperous:
Companies have to develop truly ambidextrous organizational structures where the innovation arm is given equal power alongside the existing business.
This innovation team needs its very own culture, processes, skills, metrics, and incentives to explore potentially new business models and value propositions.
They need to better manage their portfolio of existing businesses and new opportunities – sustaining today, whilst cultivating tomorrow.
Companies need a new and integrated approach to managing a dynamic portfolio of established and emerging businesses – to protect established business models from disruption as long as possible, while simultaneously cultivating the business models of tomorrow.
Exploit the current business: Every portfolio starts with a look at managing and improving the businesses you already have. Here you assess two areas:
Profitability: How much profit does the existing business models generate?
Disruption risk: How protected is your business model, and how likely is it to be disrupted? Models at risk may be established businesses, increasingly prone to disruption by new technology, new markets, or regulatory changes.
Explore: the future business: As you manage the present, you also look towards the future for new areas of growth. Here you assess two different areas:
Expected profitability: How big can an idea for a new business become? What’s the potential? How big is the size of the new market, revenue potential, pricing, etc. Here it is equally important to judge how robust a business model is, eg in terms of recurring revenues, long term growth, scalability, and protection from competition.
Innovation risk: Here you evaluate how much you de-risked a good looking business initiative. New ideas may be unproven, and risky to invest in. The more confidence you have that an initiative will work, based on tests and the resulting evidence, the more you might choose to invest time and resources into it.
Amazon is a good example of a company that intentionally manages a diverse portfolio of existing and promising new business models. The company continues to produce growth with its existing businesses (e-commerce, AWS, logistics), whilst also developing a portfolio of potential future growth engines that may become big profit generators one day (Alexa, Echo, Dash Button, Prime Air, Amazon Fresh, etc).
Investors who seek long-term sustained growth, should be demanding an “invincible” organization built on a portfolio of short and long-term innovative business models Such companies can better allocate capital and resources better at each stage of development. It also demands a continuous flow of new ideas and innovation to sustain your business in a turbulent and uncertain future.
You can download the sneak previewhere, and order the book here.
Innovation drives the world forwards at incredible pace.
Augmented reality that brings joy into the daily lives of more than 163 million people. Drones deliver vital medicines across the remotest parts of Africa. Brands develop creative business models to reduce society’s addiction to new clothing and single-use plastic. Platforms allow the most obscure talented fiction writers and video producers to become recognised.
Fast Company’s “Most Innovative Companies” ranking is based on companies with great ideas, that can change the world, that disrupt industries, and inspire society. It is less about the innovation statistics (BCG produce a deeply analytical ranking each year, based on R&D spend and business performance, hardly a measure of creativity or quality of strategic innovation).
I love the Fast Company annual ranking for it stories – amazing organisations doing incredible work – and for its drill downs into different sectors, and parts of the world. The top 50 list is a little American obsessed, but look further into the regional list for great innovators. It truly is an inspiring source of inspiration, insight and ideas.
#1 Siemens … For paving an electric highway: an Authobahn that charges hybrid electric trucks. It broke new ground this year in the sustainable transportations pace by opening the first “e-highway” that allows electric trucks to be charged as they drive. This technology, if widely adopted could simultaneously help solve some of the pain-points associated with electric vehicles—and have a massive positive effect on climate change
#2 Sprout World … for designing a pencil that can be planted in the ground so a tree can grow from its used body. It packs a lot of innovation into a small, everyday object, demonstrating that everyone can make a positive difference. Surreal, yet brilliant.
#3 Elvie … for fashioning a silent, discreet breast pump that women can use throughout the day. The UK company’s smart, wearable breast pump received FDA approval 2019 and expanded to the U.S. The design allows new mothers to pump through the day, discreetly, silently, and hands-free. It’s a great example of how “femtech” is being created to address the specific needs of women.
China’s most innovative companies 2020
#1 Luckin Coffee… For brewing the tech-centric chain restaurant of the future. It launched its chain of coffee shops in October 2017, and since then it’s grown remarkably fast, so fast that Luckin surpassed the number of Starbucks outlets in China by the end of 2019, with more than 4,500 outlets. The chain’s distinctive, digital model allows it to learn where its customers are and proliferate its small, pickup-only coffee counters as close to them as possible. Luckin’s focus on data ripples through the rest of its business, informing its decision-making on everything from its staffing to its supply chain. It launched tea and juice last year to offer more choices to its more than 30 million customers, and it introduced a new “partnership model,” which is a new spin on franchising that will allow the company to expand even more rapidly—and globally—while still controlling the data and selling experience. Luckin’s model started to kick in over the course of 2019, with store growth (more than 200%) being outpaced by returning customers (397.5%), and that impressive stat is being lapped by the number of products they buy (470.1%) and the revenue they’re generating (557.6%). “We effectively started as an online model, spending a year setting up the entire operation before opening our first store, so 100% of the transactions give us data,” says Reinout Schakel, Luckin’s CFO and chief strategy officer. “Traditional retailers might have 20, 30, 40%, so you’re always going to have to rely on people making decisions. That’s going to be a big competitive advantage for Luckin.”
#2 Meituan Dianping … For proving the transactional super-app can be profitable by boosting its food-delivery membership program and increasing its ad revenue. The Chinese super-app, which connects more than 400 million customers to such services as food delivery and hotel booking, did what skeptics did not think possible: Show a profit. To achieve this milestone, the company goosed its transaction volume in food delivery with its membership program, with members on average ordering three times more frequently than other Meituan users. In addition, the company increased its efficiencies across its delivery network, improving its gross margins by the end of June last year (its last financial report) to almost 23%, up from 15.8% a year earlier. With its large user base and almost 6 million active merchants, Meituan benefited from offering advertising services for those businesses to try to reach hundreds of millions of customers as well.
#3 Alibaba … For powering China’s digital transformation with its “business operating system”. The Chinese e-commerce giant continues to push its technological prowess deeper into the real world. Its aggregation of its digital services for branding, channel management, customer service, finance, logistics, marketing, product development, sales, and more seeks to accelerate the digitization of businesses large and small across China. Flagship customers include Nestlé and Starbucks as well as Universal Parks & Resorts, which intends to use Alibaba’s range of services to serve customers from booking their trip to its Universal Beijing Resort (set to open in 2021) to speeding their entry into the park to running everything on Alibaba’s cloud-computing platform.
Why is Snap the world’s most innovative company?
From the company’s remarkable turnaround to its creation and popularisation of augmented reality, CEO Evan Spiegel talked to Fast Company about how he changed and how he built a structure for innovation.
Spiegel has also pulled off a remarkable comeback from 2018, when Snap itself was said to be ailing. Snapchat lost 5 million daily users over the course of that year. Between its March 2017 IPO and the final weeks of 2018, 17 executives departed. Facebook’s unabashed adoption of Snap’s features—executives have acknowledged the similarity between Instagram Stories and Snapchat Stories, for example, but stated that Stories is a format that it had built upon and not proprietary technology—was taking a toll. An app redesign flopped. Heading into Christmas, Snap’s stock dipped as low as $4.82, 84% off its onetime high of $29.44. Forbesargued, “Why Snapchat’s Trainwreck Stock Will Never Have a Facebook Rebound,” while business pundit Scott Galloway declared the company “roadkill” and predicted that Snap would get acquired before 2020, probably by Amazon.
Unknown to most observers, though, Spiegel had been aware of the issues plaguing the company and had put critical fixes in motion. He worked on his leadership skills and altered Snap’s executive team and management structure to make it more effective at executing on innovations. Snap recoded its Android app so it could run better on the 85% of phones in the world that aren’t the iPhone, and simplified its tools for ad buying, helping it boost revenue year over year by 65% and add 31 million daily users to the platform in 2019. As investors caught on, Snap’s stock price rose almost 250% last year. Although the company is still losing money, Snapchat is poised for international growth. “I’m now rooting for Snap,” Galloway wrote in January after admitting he’d been wrong. “Snap is on the verge of writing its own ‘Cinderella story,’ ” wrote MoffettNathanson analyst Michael Nathanson last summer.
Snap is now ushering in the next wave of computing. While tech giants hope to make augmented reality mainstream within a decade, Snap has already made the software commonplace. On average, more than 75% of Snapchat’s 218 million daily users play with its AR “lenses” every day. That’s more than 163 million people putting silly digital effects like biker beards and puppy ears on their faces. Last year, the company expanded its AR purview even further, turning its attention to augmenting the world around users rather than just their faces, with lenses that can transform buildings into giant pizzas and products into shoppable pages.
Snap has also constructed a formidable premium content business on its Discover platform, which functions like a mini, mobile-optimized Netflix, with five-minute-long shows that users can subscribe to and binge on. There are now more than 450 channels of content worldwide, and in the fourth quarter of 2019, more than 50 shows had a monthly audience of over 10 million people. The first season of one of its teen-oriented scripted shows, Endless Summer, produced by the company behind The Real World and Keeping Up With the Kardashians, racked up 28 million viewers.
“I don’t have to feel trapped by the way everyone else [operates],” says Spiegel. He could build Snap to function in the way that worked best for what he wanted to accomplish. “We can try new things.”
Adidas, Google and the FIFA online game have teamed up to create a smart football boot. The technology known as “Adidas GMR”, tracks how people play in real life, allowing them to complete challenges or hit milestones. When they do, they will be rewarded with improvements within FIFA Mobile, allowing them to unlock in-game rewards or improve the performance of their team within FIFA Mobile Ultimate Team.
The technology brings together insoles made for Adidas football boots with Google’s Jacquard technology, which allows smart fabric to be sewn into otherwise normal pieces of clothing. It has already been integrated into backpacks and denim jackets, for instance, allowing wearers to swipe on a sleeve and change the song that is playing on their phone.
The new tie-up with Adidas puts the tag inside of an insole so that it can be placed into any type of footwear. Once it is in, players will be given challenges to complete in the real world. One of the first, for instance, tells players to take 40 powerful shots from within the penalty box to complete the “Master Finisher” achievement, and the power of their shots will be ranked on leaderboards within the game.
The companies say the tag uses machine learning to understand how players are moving around in the real world, while playing on the pitch. It will be able to measure the kicks they take, the power of shots, the distance they run and the speed they do it, the companies claim. The shoes are available to buy through Adidas now for £29.95. They also require the Fifa Mobile app, which is available on Android or iOS.
More things happening this month in the world of business and brands:
Dazed unveils the “beauty counter of the future” at Selfridges, merging digital beauty and IRL experiences. Via Dazed.
The psychology behind ASMR’s appeal is rooted in formative memories of being cared for, suggests i-D.
Fenty Beauty opened a TikTok house as “a platform for the next generation of creators,” announces Glamour.
H&M plans to share its production chain with rivals as part of a new program to help mid- and large-sized brands expand, reports the Financial Times.
Fans of the Netflix show Sex Education will be able to rent the main character’s house, reveals Teen Vogue.
CNN explores how North Korean millennials are using beauty to express political freedom.
Hyundai’s Prophecy car concept takes design inspiration from nature and is meant to “build an emotional connection between humans and cars,” writes Dezeen.
TikTok has announced plans to open a “transparency center” in Los Angeles, California under heightened scrutiny from US lawmakers and officials, reports the Wall Street Journal.
Fashion house Balenciaga is turning political instability and eco-anxiety into artistic inspiration, “channelling the ongoing turmoil into creative output” in a new SS20 campaign video that mimics an evening news broadcast, writes Dazed.
Doctors and lawyers are taking to TikTok to give advice and clear up misconceptions in their fields, reveals BBC.
A new jewellery store in New York City was designed to be a “sensory retail experience,” informed by darkness, materiality, scent and sound, says Dezeen.
Could micro-credentials replace traditional degrees? BBC explores.
Sephora is rolling out new standards for its CBD products, making it the first national retailer to do so. Via Glossy.
Australia is leaning into voluntourism with a new visa that lets tourists extend their stay to help with bushfire recovery efforts, reveals Travel + Leisure.
Big Tech brands continue their play for healthcare. Amazon has launched a new digital health care service for employees, reports The Seattle Times, while Apple has partnered with Johnson & Johnson to see if Apple Watch can reduce the risk of stroke, announces CNN.
Durex reveals a new “sex-positive” brand manifesto in an effort to tackle stigmas around sex, explains Marketing Week.
Delta has announced that it will go fully carbon neutral in March 2020, reveals CNBC.
Adidas is using WhatsApp as a direct marketing channel, describes Digiday.
Amazon opened its first cashierless grocery store, evolving the Amazon Go retail concept, announces Business Insider.
Kickstarter has become the first tech company to unionise, reports The New York Times.
Time investigates how AI is being used to help patients find the best antidepressant treatment.
Forgo is a new mix-it-yourself waterless beauty brand that cuts down on carbon emissions and plastic waste. Via Dezeen.
France has introduced a raft of environmental policies under the new French Office of Biodiversity, including a protected nature reserve surrounding Mont Blanc to cute down on overtourism, announces BBC.
Artist Ai Weiwei has created self-assembled ‘democratic’ artwork to make high art more attainable, says Dazed.
The Verge explores how creators are using video games to make climate change education more engaging.
British pop rock band The 1975 has committed to only performing at music festivals with gender-balanced lineups. Via The Guardian.
Theory’s new clothing labelling system prioritizes conscious design by communicating sustainability and ethics alongside material composition, announces Fast Company.
Teens are using TikTok “as an important springboard for discussion” to critique mental health services, describes i-D.
High-end wellness drink Dirty Lemon drink is partnering with Walmart as the latest example of how the wellness is being democratized, reports CNN.
Unilever will stop marketing ice cream to kids for obesity concerns, reveals CNBC.
Artist James Casebere imagines post-climate change dwellings, projecting “a quiet optimism in the face of catastrophe.” Via Wallpaper.
The Guardian explores the gender bias in sustainability.
The New York City government is stepping in to address discrimination in luxury fashion, overseeing sensitivity training for Prada, reports The New York Times.
Automaker Ford wants to make the roads safer for cyclists with its new “emoji jacket” that displays bikers’ emotions to drivers. Via Designboom.
The North Face is sending its designers back to school to teach them how to “improve the longevity of the garments they make,” writes Fast Company.
CNN is launching a culinary documentary series starring Stanley Tucci, announces Deadline.
Designer Tanya Taylor is forgoing New York Fashion Week this year, instead releasing five short star-studded films and a digital lookbook. Via Nylon.
Glossy unpacks the migration of oral-care brands to the beauty aisle.
A newly proposed Dutch neighbourhood is designed around car-free urban living, where there will be “one shared car for every households,” describes Fast Company.
Vegan fashion in the UK will have new government-mandated regulations to standardise products marketing themselves as animal-free, reveals The Guardian.
Dyson has patented a new wearable air purifier with built-in headphones, announces Engadget.
A “better” business
Has purpose beyond profit … believes that profit is not its purpose, but the outcome of an effective business that seeks to achieve a better purpose for society.
Acts for broader society … acts beyond self interest, demonstrating respect for people and building relationships that benefit business and society
Enables good … becomes a platform for change, and force for good, to deliver clear benefits to society as well as delivering long term sustainable performance.
The Blueprint Trust is an independent charity seeking a better business. It defines a blueprint for better business.
Here is how Mark Carney, Governor of the Bank of England, described it in July 2018: “Blueprint for Better Business challenges companies to be a force for good and contribute to a better society. Such a system is fundamentally about delivering a basic social contract comprised of relative equality of outcomes; equality of opportunity; and fairness across generations. Blueprint’s Five Principles provide guidance for businesses and reflect the foundations needed for responsible business: honesty and fairness; good citizenship; responsible employment; guardians for future generations; and a purposeful business that delivers long-term sustainable performance.
The ‘Five Principles of a Purpose Driven Business’ is a picture of what a company that is guided and inspired by a purpose that serves society might look like. It sets out where an organisation seeks to get to rather than where it is, and not intended to be exhaustive.
The ‘Framework to Guide Decision Making’ outlines the behaviours needed to sustain purpose. It also provides the link to the underlying provenance of Blueprint, which is one of its distinguishing features. The provenance is derived from a strong foundation of learning from society, including social and behavioural sciences, faith and philosophy.
Similarly Richard Branson has been the driving force behind “The B Team”
Beck in 2013, when launching the initiative in Davos, he said “I’m excited about debating the need to develop deep reforms that can have a lasting positive impact on the world. From climate change to shortages in natural resources, bio-diversity loss to economic inequality and corruption, we are taking on 10 big Challenges. The way we work is changing forever and the sooner businesses recognise this, the better. The B Team members are starting at home by committing to advance these 10 Challenges within their own companies.”
Key people on the B Team include Paul Polman and Jochen Zeitz (Kering), Emmanuel Faber (Danone) and Marc Benioff (Salesforce), Muhammad Yunus to Hamdi Ulakaya (Chobani).
The B Team set out to address 10 big challenges:
Drive full transparency
Foster collaboration
Restore nature
Scale true accounting
Create thriving communities
Reinvent market incentives
Ensure dignity and fairness
Redefine reward systems
Value diversity
Lead for the long run
“We believe that for a better tomorrow for our communities, our companies and our planet, we need bold leadership now.
Our current economic model is broken. But it did not break itself. And it will not repair itself. We, as private sector and civil society leaders, envision the way forward as a better way of doing business. That’s why we’re working to shift the culture of accountability in business to include not only numbers and performance, but people and planet.
We acknowledge that while we are part of the problem, we have the responsibility—and the power—to lead on the solution. We will create new norms of corporate leadership that go beyond commitment and toward fundamental transformation today, for a better tomorrow.”
“This shared value has brought together a close community of peers where difficult decisions can be embraced, and timely, large-scale change can be achieved. We are driven by a clear strategy and dedicate our collective influence to encourage others—and ourselves—to take personal risks to do what is right. We at The B Team choose to take the more difficult yet more rewarding path.”
Purpose and principles: Leading with purpose means examining why it is you do what you do—and that isn’t to make a profit. Purpose sets forth intentions that will make a tangible difference in the world. But purpose alone is not enough. It might be a starting point, but leaders need a strong set of principles to bring their purpose to life. And at this crucial turning point for leadership, we believe there are three principles leaders must holistically and boldly embrace: sustainability, equality and accountability.
Humility: Leaders operating with humility have an honest understanding of their strengths and limitations. They are not seeking to be the hero of their company, but rather a part of a community. A humble leader actively and continually admits to their imperfections while seeking to learn and grow.
Courage: Courageous leaders are willing to take a personal risk for what is right and use their voice when it matters most. They choose to take the often difficult yet more rewarding path. They acknowledge that the global economic model is broken, but it did not break itself and they have a responsibility to repair it.
In 2015 The B Team launched the 100% Human at Work initiative and network as they believed it was “time for businesses to stop looking at people as resources and to start seeing them as human beings”. The B Team have built the People Innovation Network, to bring companies together to share and learn from one another about how to help their employees thrive at work.
In 2016, as part of their work for The B Team Sir Richard Branson and Benioff launched a movement of entrepreneurs and business leaders building their companies with people and planet alongside profit as part of their DNA from the outset, called “Born B'”.
