Rethink Sustainable Business (2 of 7) The AHA Model

The AHA Model. Will be covered in detail further down.

Warm welcome my friend to this seven-part series, where we answer:

How can businesses accelerate their profits by building a better world?

In Part 1 we looked at the short answer. This time we’ll dive deeper. We’ll cover chapter 1 (opportunities, the future, and reasons to think in new ways) and kick off chapter 2 (AHA model and its platforms).

1. Opportunities for growth

What are Industry Leaders 3.0 doing to grow 2 times in 5 years?

1. From 2017 to 2020, Industry Leaders 2.5 generated annual shareholder returns of 30%. Industry Leaders 3.0 achieved returns of 70–80%.
2. All CEOs agree sustainability is a top priority for business success, but 93% have yet to integrate their tech and sustainability strategies.
3. Companies stand to gain at least $12 trillion in annual revenue opportunities by aligning with the Global Goals for sustainability.
4. From a technology aspect, just Artificial Intelligence (AI) is likely to contribute with $16 trillion to the global economy by 2030. The metaverse; $5 trillion.
5. Venture capital investment in climate tech is growing five times faster than the average rate of investment across all industries.
6. Companies aligning with global trends are 4 to 8 times more likely to speed up their cash flow the most; a top market performer.

These opportunities demonstrate that sustainability coupled with technology is a major opportunity to build a long-term strategy around. And, as digitalization forced every company to become digital, now every company is forced to become a sustainability company. To turn these opportunities into tangible business results it is helpful for leaders to better understand where the world is headed.

Where is the world headed?

Welcome to the age of instant access. Here we will access the things we need locally; energy (rooftop solar), food (3D printers), and mobility (Robotaxis). The American dream is estimated to cost less than $250 a month by 2030, even less by 2035, and will include transport, nutrition, energy, water, education, and living space.

MOBILITY-AS-A-SERVICE
This connects electric vehicles with autonomous technology so we can access cars when needed and pay per mile or subscribe; causing the end of car ownership.

Cost per mile will be 4–10 times cheaper than buying a new car and avoided emissions of 90% by 2030.

The decrease in cost opens the way to free transportation — and trillions of dollars in business opportunities — where the low cost of transport (1–2 cents per mile) is covered by other revenue sources, such as: entertainment, demand management, data monetization.

ARTIFICIAL FOOD TECH
This combines food-as-software with precision biology, where we will use molecular cookbooks, and where food designers create more nutritious, tastier, and cheaper foods; causing the end of animal-agriculture.

Modern foods will cost 50–80% less, with net avoided emissions of 65% by 2035.

The disruption of food is inevitable and constant iterations will rapidly improve products and price, where this speed and scale of disruption in the modern food system will create opportunities in areas such as biological technology, food distribution, and software.

100% CLEAN SWB
This creates energy systems of solar, wind, and battery (SWB), which by 2030 will offer the cheapest electricity; causing the end of coal, gas, and nuclear.

In 2030, SWB electricity will cost less than 3 cents per kilowatt-hour, avoiding all greenhouse gas emissions from the electricity sector.

As the Internet created trillions of dollars of new value by reducing the marginal cost of information to near zero, SWB will similarly reduce the marginal cost of energy to near zero, creating big business opportunities: road electrification, cryptocurrency mining, cloud computing, and more. But what are the trends driving this?

What trends will propel leaders forward?

Today, leaders are riding an ever-increasing number of global trends; digitalization, urbanization, and sustainability to name a few. The world is changing. Exponentially.

In this change, globalization has made the world more connected and interdependent. As an effect, it is causing social, environmental, and economic exponential shifts.

THE SOCIAL SHIFT
This shift underpins everything. It is caused by the changes in global demographics. They include, but are not limited to, population growth, people living longer, and people becoming more prosperous.

Averaged until 2050, about 1.5 million people are estimated to move to cities. Every week. 90% of this growth will unfold in Asia and Africa. As living standards rise, so will consumption. And resource use. Given the growing population, it will take 3 more Earths to sustain current levels of consumption by 2050. This shift is energy-intensive; causing more shifts.

THE ENVIRONMENTAL SHIFT
80% of global energy is supplied from fossil fuels. This affects climate change, which has many implications. The warmest seven years have all been since 2015. Fires, droughts, and storms have doubled since 1980. Floods have quadrupled.

THE ECONOMIC SHIFT
From 2016 to 2030 the US and EU will decrease their global GDP share with 10%, while China and India will increase their share with 10%. The power is changing from west to east.

Our current economic system is based on unlimited growth on a finite planet, benefiting a small number of people. Since 1971 we are consuming more from Earth than it can regenerate.

MORE WITH LESS
We’re standing at the crossroads; either we stop growing or we find smart ways to create more with less. Innovation through business models, powered by ecosystem partnerships and technology, has the potential to decouple growth from resource use and seize the potential in these trends.

THE TREND IS YOUR FRIEND
Making sense and making use of these trends will help leaders make smart strategic decisions to speed up better value at greater scale. To successfully seize the green business opportunities, in line with the global trends and shifts, leaders are also advised to shift their thinking.

Is the world better off because your company is in it?

People demand more. 64 of 100 say that a company’s primary purpose should be making the world better. Patagonia, for example, are in the business to save our home planet.

What impact leaders make will matter and it will be extremely transparent with the advances in digitalization. If leaders choose not to align with the global trends now, the cost of inaction can be devastating. In 2027, 75% of the companies quoted on the S&P 500 in 2019 will likely have disappeared.

NEW WAYS OF THINKING
A scary scenario for some leaders is that leading competitors, investors, and partners have already moved on and that they have become irrelevant.

This possibility of irrelevance is rising fast because of old ways of thinking. Most companies still see each other as competitors. Not as partners. In this rivalry they can be completely blind to the concealed competitors disrupting every fiber of their business model. Leaders are starting to realize that their customers’ needs are being satisfied in entirely new ways. To stay relevant, it’s time to think in new ways.

Instead of defending their old business model, the innovative leaders are exploring partnerships and how they can become part of accelerating new and better solutions to satisfy the core needs of customers in a sustainable way.

ARE YOU READY FOR SUSTAINABILITY?
Until now, many leaders have seen sustainability as a barrier. However, as customer are demanding more and investors are radically shifting their assets, many leaders are also shifting their thinking from why to why not.

One thing is clear: the world is transforming. Rapidly. To survive and thrive, companies are starting to radically transform themselves as well.

Those leaders that understand the urgency and inevitability of acting on becoming a sustainability company will be first in line to seize the twelve trillion-dollar opportunity.

If the unspoken question now is: “How do we know if we’re ready for sustainability?”, then let’s note that the better question to ask is: “How do we get started with sustainability?”

It’s time to answer that.

2. The AHA model

You never change things by fighting the old ways of thinking. To change something, create new and more desirable ways of thinking that make the old ways of thinking irrelevant.

AHA — A Handy Aid to accelerate new ways of thinking

An Industry Leader 1.0 improves.
An Industry Leader 2.0 innovates.
An Industry Leader 3.0 impacts.

The model shows how a company evolves from left to right through its PEAs (platforms, enablers, and accelerators).

Impact builds on innovation, which builds on improvement. No industry leader is completely in one maturity stage. The primary intention of each stage is to offer an indication of each company’s PEAs to better understand their complete picture.

Eating peas strengthens most immune systems. In this case, that of the company and planet. Great cash flow is a result of investing in high-quality PEAs. In part 3, let’s dive deeper by looking at them. More specifically we’ll cover purpose, leadership, talent, value proposition, and strategy.

See you in the next one.

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