Welcome to Radical Disruption
A column to set the table
By Alexander Díaz
At the heart of our thinking, what powers everything we do for you, is the exciting combination of climate science and behavior science, which in turn informs the combination of consulting, stakeholder communications and organizational culture at the core of our Deep Adaptability model.
Animating our thinking is the expectation that our clients will be the world's most adaptive companies, the brands that make it through, led by the world's most clear-minded, courageous women and men. And that the one way to do this, to become this kickass adaptive, is with the advanced combination of internal and external strategies we have assembled after roughly two years of research and analysis.
Inspiring our thinking is the vision that in the midst of this mess and moved by their (your) example, we will embrace a real hope, the only one fit for the times, built on the most realistic probabilities of the crisis (hint: we're no longer likely to actually solve it!), and come together as never before to face whatever the climate throws at us, including — especially — within companies.
Welcome to COMMON Future. (To accompany this column, check out the Deep Adaptability deck here.)
First, the climate science
It is captured by the graphs below. If you're like most managers and you follow facts and data, you're well advised to follow these facts and data, because the latest Equilibrium Climate Sensitivity (ECS) study July 2020 left zero doubt. When combined with numerous other studies, the only conclusion to draw is that the world will overshoot the much-warned-about 1.5°C temperature rise as early as this decade and toy with 5°C before century's end.
This brief article walks you through the significant, now unavoidable underlying climate trends driving the temperature rise, what we refer to as Real Science, as opposed to the interpretation that says we're still on time to stay below 1.5°C or 2°C. That said, we're the first to recognize the world is primarily focused on staying within 1.5°C and 2°C. The science, though, cannot be clearer: we will overshoot. So our mission is to help companies build what we call 4C Resilience — our definition of Adaptation Ambition — and not fall short of what you'll need. We're the only group in the world that helps you do this, which includes protecting your value and optimizing it by capitalizing on the historic opportunities adaptation ambition creates.
As you do with all risk analysis, this one comes down to probabilities. What are the most likely outcomes and how should you plan for them?
Climate data helps. So does artificial intelligence, or AI firms that map risks to your company's facilities and other assets. The latter, though, comes in too many flavors and is often overwhelmed by climate events. Multiple efforts to standardize and globalize it, to give us all a universal language and process, are continually met with frustration. Its absence inhibits such things as insurance and finance. Like you, we're cheering on that process, but fear it won't prevail in the face of climate tipping points and unpredictables that will continue to overwhelm.
The bigger risk is that entire management teams and boards will remain paralyzed, unwilling to move until they do get that elusive data, or reliant on today's inherently insufficient AI. In both cases, you will surely fall short, given the climate that will actually play out — clearly worse than those models assume. The current thrust toward net-zero, while important, is also insufficient, given the likelihood it, too, will fall way short of what's needed. Our role is to step in and focus your data-based management on the climate science you can definitely bet on, and then prepare your people and stakeholders accordingly.
How critical is this vs. what other adaptation groups offer?
- The risk models they use cannot fully capture the tipping points driving extreme events, nor the higher-temperature scenarios and radical disruption you will face in the 1.5-to-5°C Economy. Risk data has limitations.
- As a result, consultants tend to stay strictly within near-term possibilities, where you risk falling short of the robust adaptability you will need in the longer term, the one thing you do not want to do!
- Also as a result, they generally stay at a core-team and senior-management level and fail to execute the degree of enterprise-wide, full-engagement communications and culture you need to make all your stakeholders part of the project.
Said another way, as a business you always bet on the probable, not the miracle. Miracles happen, yes. In this case, the timing might still be altered in our favor; we might get lucky and Mother Nature will cut us some slack. But given the science and the facts, it is simply ludicrous at this point to plan for that. The high-probability scenario we face instead is what we call the Radical Disruption of the 1.5-to-5°C Economy.
The future, that is, will be dramatically different from the past we know and the present we master. But it's the future we will actually have, and therefore the one your company must immediately plan for and adapt to.
Everything on the sustainability front you and we are pursuing to keep this from happening? It remains indispensable, but the purpose now is to stay within 5°C. So to a large extent, sustainability and adaptability go hand in hand. It's not either-or; it's both-and. Completely symbiotic. Your challenge is to extend your sustainability by incorporating adaptability.
As to your 1.5-to-5°C life and business? That's where you and all your stakeholders need to be all in on adaptation, because it's gonna get nasty. You can only win if everyone is on board, and it is our mission to help you get there from here on time.
We have the detail and would love to share it with you on just how nasty and on the nuances of the science. I shared some in this early August 2020 post. The good news is that you, your brand, can make it through, but only if you ADAPT. Therein the new hope.
To that end, the critical distinction to understand is between First Wave and Next Wave adaptation. First Wave is below 1.5°C, or now through late this decade, circa 2030. There is a mature field of adaptation professionals and risk-modeling firms to help you weather that level of higher intensity, higher frequency extreme-climate events. The global TCFD framework helps immensely.
Next Wave is what will happen when we overshoot 1.5°C, as the temperature curve continues the relentless, now inevitable climb we see in the graph. One of the things that makes us powerfully different as a firm is our equally relentless commitment to guide you through the Real Science and help you navigate that future, the one you will actually have as a company and brand, and we have designed the world's first and only model to do that. Our job is to help you get ready for, and to navigate, the Next Wave by getting you off to a strong start right now, during the First Wave.
The behavior science
Which brings us to the second differentiator that makes our Deep Adaptability approach uniquely powerful: behavior change, namely working within the human biases that drive how people manage extreme natural disasters. Our focus: your people and stakeholders.
When confronted with a scenario or threat that seems too daunting and complex (Ambiguity Bias), people's natural instinct is to stay within, or not stray too far from, the comfortable and familiar (Status Quo Bias). We also tend to follow what everyone else is doing (Bandwagon Effect) and assume with irrational hope that "it won't happen to me" and that "things will work out in the end" (Optimism Bias).
These ingrained biases can literally kill your business, when allowed to carry the day among your leaders or, worse, the rest of your stakeholders. Because they keep you and them from doing what you must, individually and collaboratively, to plan and adapt thoroughly and on time.
The thing to grasp, worth repeating, is that the future will be dramatically different from the past we know and the present we master. The Next Wave, that is, is no joke. COVID has given us but a taste. In the 1.5-to-5°C Economy, climate events (including pandemics) will compound and worsen continually through century's end as temperatures continue to rise. You and every stakeholder must keep that curve in mind at all times. We won't have breaks between events to recover and restore normalcy, and your response must be such as to develop a different skill set, which McKinsey alludes to in this analysis:
"Our approach to the hardest problems—and the anxiety those problems create—is fundamentally misdirected. We typically fall back on our standard operating procedures...respond to uncertainty with analysis...look for leaders who know the way and offer some assurance of predictability. We should [instead] broaden our range of interventions by breaking familiar patterns and using a new approach that expands our options."
Breaking familiar patterns and using a new approach that expands our options is precisely what Deep Adaptability does. And given the alternative, you really have no choice if you want to be one of the brands left standing, perhaps even standing tall. Which brings us to the different skill set you'll need, the "broader range of interventions." From the perspective of stakeholder management, aligned with the latest behavior science, it has three parts.
First, redirect your and your stakeholders' behavior biases. The biases will be there. It's our nature as humans. Your job is to channel them in another direction. Clear the Ambiguity by painting a Future Picture in your/their thinking that allows everyone to truly see where we're going. Nurture a new sense of Optimism with a Hope Taxonomy built for the future we will actually have. Create the Bandwagon and movement within the company that your people will jump on and follow enthusiastically. And more. You have to work with and redirect the biases. That is precisely what our five-point org culture and communications suite, called FIVE TASKS, is designed to do.
The second part is a mix of three old ones: agility, initiative and fearlessness. Talk about breaking free of familiar patterns! You know all too well the disruption created by new foreign competitors you face every day, thanks to globalization, and the dizzying pace of disruptive new technologies, thanks to digitalization. Your business model may have adjusted to this constant change and threat environment, maybe even profiting from it.
Perhaps you think climate disruption is comparable. But it is not. It's not even the same conversation. The net of those disruptions (competition and tech) is growth, and your job is to ride it. Climate's net effect is downward. As temperatures rise on that upward curve, economic activity takes an ever-worsening dive, not to recover until temperatures return to normal — sometime next century.
Whatever your take on this outcome, your job is to ride this, as well. And you can. But as McKinsey suggests, only if you reset your expectations to manage the always unpredictable and unknown, as opposed to the predictable and known we all love to manage. Ingrained, instinctive agility must become a given. Your mind must be completely open and reset to whatever comes, your company (people and systems) ready to pivot and move. We call it the Resilient Mindset.
Your COVID response has given you a taste of what extended, systemic, global disaster management looks like. But this, too, is only a taste. As temperatures climb the curve, events will multiply, cascade, compound and become even more devastating. Our job at COMMON Future is to help you institutionalize the best possible approach.
To recap, first you must redirect the biases. Then, ingrain the mindset. But I did say there are three parts to the challenge of working with behavior science to make it successfully past the First Wave and through the Next Wave. This dramatically new future must be invented by someone. Maybe including you. So far, sustainability innovation has offered a glimpse into how exciting and game-changing this can be. As we extend that to adaptability innovation for the Next Wave...wow! Just imagine the possibilities. Part of our job is to help you identify the opportunities, but more so to create the culture where you and your people become climate-literate enough and inventive enough to own the future and lead the world.
The companies best suited for this kind of visionary Deep Adaptability leadership? YOU, the world's sustainability leaders. Years of trying to solve climate change have given you the staff, DNA, strategic alignment, and vision to now simply add Deep Adaptability to your toolkit and incorporate the latest behavior science to absolutely unleash your people's innovation superpowers.
That's why you are our starting point, because you're ready to go and can accelerate the adaptation scale needed across the rest of society everywhere on the planet. That happens to be the grand social mission that stems from this thinking. For society to adapt, companies must adapt — one of the three pillars, along with governments and families. And when companies adapt, each one carries the potential of becoming Cypriana, the name we have given to a place ruled not just by planning, effectiveness and a redirected-bias resilient mindset, but by solidarity, community and humanity. As I said in this recent column:
"This is not a geographical or location place. It’s a living place. Come up with your own name and script, and make this, too, a central part of your adaptation plan, so that as your company tackles the inherent systemic fragility of the global economy, your people discover the strength inherent in their nature as communal beings and make the company far stronger and more resilient as a result."
So, would you like to become one of the most adaptive companies, if not the most, in all the world?
If you answered yes, know one final thing. You can't do this alone. No one can. Adaptation is by nature a collaborative, interdependent endeavor. You may become resilient inside your walls and across your value chain but still fall to climate change if the economy and society around you collapse as others become victims of extreme events.
To say you're one of the most adaptive companies on the planet, therefore, means you take a leading role in owning broader societal adaptation. That's where our CASCADE solution and the Adaptation Ambition movement enter the picture, by helping you navigate that dimension as part of the Paris Agreement adaptation process (Articles 7 & 8 of the accord) in each and every country on Earth.
It is, as you'll discover, the most rewarding path to take.