September 20, 2014

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Get Ready for the Breakthrough Decade

A new theory of change is emerging on the shoulders of past waves of progress.

Elkington

By John Elkington

There is a growing—and uncomfortable—sense that the decade from 2015 to 2025 will be make-or-break. It was nicely (if tersely) summed up in a tweet by Alex Steffen of worldchanging.com on May 10th:

"What happens in next 40 years critical for all humanity for centuries to come. What happens in next 10 years sets the range of what's possible."

It is hard to disagree.

A New Theory of Change

Indeed, two years on from our 2012 Breakthrough Capitalism Forum, Volans is now working to frame the period 2015-to-2025 as the “Breakthrough Decade.” This will involve defining and embracing a new, stretch theory of change.

By way of background, the past decade has seen growing interest in so-called theories of change, particularly in the fields of social entrepreneurship and venture philanthropy, but it turns out that such theories are themselves subject to change.

To get a sense of where all of this has come from, and where it may now be headed, let’s take a quick look at highlights of the four societal pressure waves we have mapped for the period 1960 to date.

Figure 1-Societal pressures waves_1960-present day_Copyright-Volans-2014

We expect the transition from change-as-usual approaches to breakthrough strategies to be spurred by a growing sense that much of what happened in Waves 1-4 was unambitious, incremental. No blame attaches to past change initiatives designed to boost the efficiency, transparency and fairness of the current system, it’s just that to ensure a desirable, sustainable future we now need timely, effective system change.

From Wave 1 to Wave 4

The first societal pressure wave (Wave 1, keyword Environment) built through the 1960s – and peaked between 1969 and 1972. Business analysis began to involve the use of new tools like environmental impact assessments and audits. Downwave 1, running through to 1987, saw a massive wave of regulation across the OECD world, with business largely on the defensive, forced to comply.

Wave 2 (keyword Green), peaking between 1988 and 1991, saw the collapse of the Soviet-centered Communist bloc. In parallel there was a new focus on moving business “beyond compliance.” One result was the launch through the subsequent downwave (1992-1998) of a range of voluntary market standards such as AA1000, the Global Reporting Initiative (GRI), ISO14000 and SA8000. Business analysis embraced total quality management, triple (and then double) bottom lines, and environmental (and then sustainability) reporting.

The Wave 3 (keyword Globalization) agenda included many Waves 1 and 2 agenda issues but increasingly in the context of the processes of globalization, liberalization and privatization. Globalization also weakened many governments, as did the hyperpower status of the United States. As markets and supply chains globalized ahead of global governance systems, the spotlight was on multinational corporations, particularly their stumbles. Then, after Wave 3 was cut short by the events of 9/11, the third downwave (2002-2006) focused on much narrower definitions of security.

Wave 4 (keyword Sustainability), peaking around 2010-2012, saw a growing use of the S-word—with many business leaders announcing they had already “embedded” the agenda. Meanwhile, we saw the beginning of a generational handover as the Boomers began to retire—and Gen X and Y made their priorities felt. New forms of social media and social networks began to transform not only business (e.g., Amazon, iTunes) but also activism (e.g., 350.org, Avaaz, 38 Degrees).

[Join us LIVE in conversation with John Elkington - Searching for "Breakthrough" - July 24, 2014: Learn more!]

With governments distracted by the Great Recession, we saw the emergence of multiple theories of change, including a growing emphasis on the role of entrepreneurs (e.g., cleantech, social), plus a growing interest in the rise of the BRICS and MINT economies. Business analysis increasingly embraced concepts like Integrated Reporting and Shared Value but organizations like WEF signaled the systemic crisis building across what it called the Water-Energy-Food-Climate nexus.

The Breakthrough Decade 

Through the Wave 4 period, Volans was evolving its Breakthrough Capitalism agenda. We also began to shift our work from observing and mapping the waves and downwaves to creating the conditions in which the next upwave would be more like a rising tide. That said, we have been instrumental in mobilizing change movements in earlier waves and downwaves, in such areas as green consumerism, sustainability reporting and social innovation and entrepreneurship.

This new perspective will be at the heart of Phase 3 of our Breakthrough Program, which aims to get a better sense of the economic, social and environmental upsides of at least some of the global market shifts that are now building.

Breakthrough and Big Data

One key trend we foresee is a growing interest in numbers and data. This is a theme we begin to explore in our latest report, Investing in Breakthrough: Corporate Venture Capital.

More broadly, we conclude that we are now seeing major shifts in relation to the sustainability agenda.

Once this mainly focused on downside risks (such as pollution and species loss) and was largely driven by people outside the economic mainstream. The process was fueled by bottom-up rather than top-down pressures.

Now the agenda is increasingly embraced by insiders (including a growing number of CEOs and other business leaders), driven by top-down dynamics and critically, focuses on future market growth opportunities.

With the timing of any Wave 5 (suggested keyword, Breakthrough) still highly uncertain, we plan to give things a nudge. The idea is that while the Breakthrough Decade will coincide with the period for the implementation of the proposed UN Sustainable Development Goals, the focus on the need for breakthrough innovation, enterprise, investment and public sector policy-making will help encourage leaders in all sectors to do more, better and faster. For more details, contact us at breakthrough@volans.com.

[Join us LIVE in conversation with John Elkington to discuss what Capitalism 2.0 might look like July 24, 2014: Learn more!]

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