We are living in a polycrisis. We know this. But, what are we going to do about it?
A recent survey has found that over half of the IPCCs scientists now predict the 1.5oC target is beyond reach, and we are careering towards (at least) a 2.5oC world. In terms of impacts, in January 2024, we pushed the 12 month average over 1.5oC for the first time, and experienced $280b in damages. Only 38% of which were insured. The climate finance to fix it? Ca. 650% less than where it should be. ($1.25tr Vs $8.1 tr in 2024).
What about the global markets? Well, while the oil and gas ($100b in 2023) companies reported record profits, the rest of the world is reeling from the chronic cost of living crisis. An additional 71 million people in developing countries were pushed into poverty as a result of a surge in food and energy prices in 2022 alone, and global debt rages on at 330% of global GDP.
It’s okay, policy will fix it, right? Wrong. In the most consequential election year in the history of democracy, we are either seeing a pendulum swing to the right (e.g. Bangladesh, Finland, France, Portugal, European Union), expecting one (e.g. United states, Belgium, Iran, Austria), or a stronghold of near or total autocratic positions (E.g. India, Russia, Iran).
An intrinsically linked result to all of the above? Civil unrest: Witnessed in 101 of 198 countries in 2022.
Too much? I hear you. But I needed to make this point:
In this era of market and system failure, now more than ever, targeted private sector leadership is critical.
While politicians are increasingly paralysed on the policies that matter by an ever more divided electorate, corporations can act in spite of policy and win the benefits of doing so. And if they are suitably informed, they can become systems leaders to responsibly make and shape markets for the better.
So, what is systems leadership?
Systems leadership is the act of exemplary leadership in systems transformation.
It is not about doing all things, all at once, to please stakeholder expectations. It is not comprehensive CSRD reporting, nor accelerating with tunnel vision towards your 2040 carbon goals.
It is about knowing your materiality, knowing exactly where you can intervene in a system to create change (for you, for the industry, and for the wider natural and social systems upon which your company depends), and — most importantly — knowing how to harness your unique contributions towards that goal with the optimum use of resources to deliver.
It’s about precision activism, if you will. Something I’ve written about before — where taking specific market-shaping action makes good business sense.
So, what does it take to be a systems leader?
Having personally been in and around the “systems” space for about 10 years now, one thing is for sure: A lot of companies talk about systems transformation and systems change, but barely a handful are truly prepared to deliver on it.
It is for this reason that the team at 103 developed a readiness assessment to help companies understand their current position and how they can embed systems leadership deep into their company strategies. We see 3 critical readiness phases:
- Individual Readiness.
Individuals who are ready to become systems leaders, have the right personal and professional competencies to navigate complex problems in an ever more VUCA world. These span from empathy and deep listening, to systems mapping and influencing multi-stakeholder partnerships beyond the sphere of control. Further, individuals need to be personally and consistently demonstrating their commitment to collective culture which will enable systems leadership to thrive.
2. Company Readiness.
Companies who talk about system change, but don’t have an aligned purpose (that is integrated from company statement through to team objectives and incentives), are working with a strapline, not a strategy. This is a fundamental foundation of systems leadership. So, too, is ensuring clarity over your materiality and its integration into all strategic decision making. Getting clear on the nature, social and carbon impacts of your company and their inherent trade offs will avoid potentially disastrous consequences, and empower the company to build resilient breakthrough business models of the future.
3. Systems intelligence.
Consider this readiness stage the sharpening of your tools before action. Systems transformation is such a misunderstood term — to you, to your team, to everyone. This is why getting a common understanding across the key stakeholders of your organisation is critical before delivery. Upon this solid foundation, we see two critical elements: 1. Clarity on what — exactly — your company brings as a USP to the responsible future of your industry, and 2. Razor sharp focus on where you can harness those USPs to intervene, with the optimum use of resources.
Sounds like too much hard work in a time of sustainability backlash? A cautionary tale for you.
Now, if you’re wondering if all this is important or if it is just distracting you from what matters, let us walk you through a cautionary tale. Systems leadership and knowing how to responsibly make and shape markets is core to business. If you think otherwise, have a look at the plummeting share price of Beyond Meat thanks to a cost of living crisis and insufficient field building. Reflect on Tesla’s catastrophic fall from grace, for, amongst others issues, wildly underestimating its social impacts and company culture as an externality. Then pause for a moment at the plight of Stefan Scherr, the exiting CEO from Hertz, who switched their entire fleet to EVs without readying his stakeholders and developing a suite of supportive actions to better enable success.
Right, now that’s cleared up — How to get started.
The good news is that identifying your current status and working to embed it in your organisation does not take a huge amount of time or money.
In terms of timeframes, we estimate 3 months to conduct a detailed readiness assessment and mindset shifting workshop, and a further 6–12 months to further embed the foundations for delivery inside an organisation. There are readily available tools to help you and ways to tweak your performance management and management models, to better enable it, too.
Critically, it doesn’t require you to throw out your rule books or strategies, just refine them with a precision lens. This will naturally be an iterative process. You may choose to inform your current strategy with systems thinking — Which is perfectly okay. However, if you are more mature in your journey, you may choose to conduct some systems intelligence to help chart the course. You will reap the benefits if you do.
One thing is for sure, with all of this, it must come from the top. Senior leadership, and by that we mean both Executive Leadership and the Board, must be engaged with this work for it to be a success.
Curious? You don’t have to hire us (!), we are trying to spread the word.
At 103, we firmly believe equipping companies with the right tools and systems intelligence to take action will transform our collective ability to achieve the level of transformation our industries require. This, together with our mission to become an ever evolving and open source toolbox to intervene in industrial systems to create positive change, is why we are keen to share these insights far and wide.
To help in this process, I will be presenting about 103’s experiences in supporting systems leadership development at several events this year and also releasing a case study with a brilliant academic partner. We will share these dates, times and materials as they come.
As always, thoughts and builds are welcome. In the meantime, keeping myself out of trouble at kate@103.ventures