From the Paris Agreement to COP26 in Glasgow, John Robinson, a Strategic Client Advisor within SAP’s global manufacturing and Industry 4.0 team, looks at whether industry has shown enough leadership on climate change and sustainability.
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”
A Tale of Two Cities – Charles Dickens
The paragraph above was written 162 years ago and yet, I think, it is a perfect summary of where we are today in late 2021. Our knowledge and understanding of the universe together with the advances in technology are truly awe-inspiring. In that respect, it is the best of times.
At the same time, however, we face a global climate change crisis of our own creation and we seem unable to avert the disaster. So, in many ways, it is also the worst of times.
Sustainability and the climate crisis are currently hot topics in industry (no pun intended). Critics will say that industry is paying lip service to this issue and that the efforts being shown are nothing more than a reactive response to market demand.
The demands regarding sustainability mainly come from two sources, government regulation and customers. Failing to meet these needs could have a financial impact on an organisation. Financial penalties, lower profits, loss of market share and brand damage are just some of the factors that lead to the development of new products and services. A cynic might even argue that ESG criteria are only important due to the need to secure investment.
The changing market demand on manufacturers places the same demands on the supplier ecosystem and results in them also bringing new technologies, products, and services to market. If the suppliers don’t respond then they too face the same financial consequences as the manufacturers.
With that in mind, I would like you to think about the following question:
How much of the innovation that we are seeing is reactive to market conditions and driven by commercial considerations?
Then ask yourself the following:
How much of what industry is doing is proactive and driven by the need to solve the climate change problem?
Whilst I don’t have a fact-based answer to share with you, my experience tells me the vast majority are the former.
If a concept was perceived as risky or didn’t meet the investment and profitability criteria for an organisation, would they still do it? What if a solution could only generate a small profit or break even but had a big impact on the climate problem? Would they still do it?
My view is that the majority wouldn’t. So why is that the case when we are facing a disaster?
We must consider the dynamics at play in the overall business environment we are a part of. In a large organisation, how often is an entrepreneur or an inventor also the CEO? My limited understanding of psychometric profiling would suggest to me that the answer is not very often. I like to think of myself as a creative person who tries to think outside the box but I also know that I do not have the desire or discipline to be a CEO.
Late last year Elon Musk made some controversial comments about too many MBA’s running corporate America. People may question his methods and bluntness but, in principle, I agree with the point he was making. If our industry leaders are all taught to run organisations in the same way and they are all measured by the same success criteria then it stands to reason that deviations from the norm will not see the light of day.
Albert Einstein is often quoted as saying “Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.” How many amazing ideas and inventions are still on the drawing board because they didn’t pass the corporate tree climbing test?
‘A paradigm shift’
Just over 12 months ago I developed an idea for a highly disruptive new business model. If this model is adopted it will bring about a paradigm shift in global manufacturing and one that will have a hugely positive impact on the climate.
Since then, I have been challenging the status quo with my idea but there is a very real possibility it will just fade away. Almost everyone I have explained the concept to understand it and agree that it makes a lot of sense. Only a few however seem prepared to act and I know why.
The answer is ‘The Five Monkeys Parable’. In short, it is because “that’s the way we’ve always done it”. Some people won’t challenge or question the way we do things even if they can see it doesn’t make sense. It doesn’t follow the business model and it is not how they are measured. This is a problem in the middle management layer but the root cause is the business model they are told to follow by leadership.
I think that what Elon Musk was criticising is the system that creates our business leaders. It provides them with a very formulaic ‘curriculum’ and measures success on a specific set of mainly financial driven KPI’s. Maybe the current MBA model is too focussed on the mass production of leaders and not enough emphasis is on creating a batch size of one.
Many people are taking direct action on the climate by protesting and I completely agree with the urgent need for change. At the end of the day, however, we live in the real world and it is a world driven by economies. Until altruism and Life Centred Design become more important on the curriculum the inventors and entrepreneurs will have to become better at learning how to sell ‘value’ to each stakeholder in the system. How does the solution help them improve their KPI’s? Because it is the right thing to do is not good enough, yet. A lesson I am learning every day.
Challenging the status quo is very difficult but luckily, my idea is gathering momentum. A growing number of stakeholders are now seeing the value to them as well as the greater good and discussing what it will take to make it a success.
I will be discussing the problem with status quo, my proposed new business model and the value it offers to your organisation with a panel of leading figures at the Manufacturing Leaders’ Summit on November 10 in Liverpool. Please register now for the session to understand more and join the discussion.
Related reading: Crossing the Abyss
About the author
John Robinson, SAP.
John is currently a Strategic Client Advisor within SAP’s global manufacturing and Industry 4.0 team.
Prior to joining SAP in June 2019, John’s career included global roles at EY, Atos and Schneider Electric (Wonderware) as well as roles in manufacturing and manufacturing automation. John’s client experience includes many of the world’s largest manufacturers across all sectors and manufacturing process types. His work has involved global travel and this combined experience provides him with a unique insight into the challenges of digital transformation in manufacturing.
*image courtesy of Shutterstock