IKEA’s expansion of their affordable, sustainable housing business Part 2
What sort of People do you need in and around your organisation to imagine and execute a regenerative strategy?
In Part 1 we used IKEA’s BoKlok expansion as a framework to discuss the difference between a regenerative strategy shaped by non-linear people an exciting, but nonetheless, logical response to a gap in the market.
A Regenerative Strategy has 3 components, bold in vision and action.
- Assumes Deteriorating Government and Civil Society Models
- Seeks to help regenerate them whilst regenerating their own models
- Commits to building a movement of other regenerative businesses
WHAT ARE NON-LINEAR PEOPLE?
People will shape the world’s destination, so what sort of people do you need in and around your organisation to re-imagine, commit and deliver on such a bold strategy.
We believe people who have haven’t just worked across multiple systems, Business, Governments, Investors but people who have gone further and worked to re-imagine how they might function more effectively together in the future are key. Those who understand the strengths and weaknesses of the current models, play a critical role in creating the space for the emerging models to thrive.
We call these, non-linear people and where and how you deploy them, a Non-Linear People strategy
There are two big challenges for a non-linear people strategy
- Non-Linear people are scarce
There aren’t enough people in the world who have worked across systems, let alone reimagined them. Businesses have prioritised more diversity — gender, ethnicity, technology, cross functional, cultural, geographical etc, etc over experience across systems for generations.
Perfectly logical if current systems and the role of business within that system broadly remain the same. A problem if that fundamentally shifts.
2. You need Non-Linear competency across all your people groups.
This is such a fundamental shift that you can’t just focus on hiring and developing more non-linear employees at the board level and across functions. Although that’s important and critical, it’s relatively ineffective unless it’s backed by abundant regenerative capital. Capital with the multiple objectives required to be regenerative in addition to short term profitability.
Scarcity — Where should your Non-Linear People priorities lie?
Most investors/owners have linear experiences like most CEO’s and Political leaders. They need to be exposed to enough non-linear perspective in the form of advisors and influencers. Employees can deliver, but the investors give permission. You need non-linear skills and perspective in your ownership, employee and advisor groups.
A lot has been written about the Pros and Cons of the different ownership structures. Shareholder primacy is obviously a hot topic. We’ve highlighted some of the potential advantages of privately held businesses in Part 1.
In a private or family held business where owners are fixed you aren’t looking to attract what you might call non-linear or regenerative investors.
A listed business seeks to inspire current investors to re-imagine success and attract new.
Whether listed or private, advisors and influencers have a huge role. Does the business even have any non-linear advisors? Of course they are increasingly diverse but diverse experiences within the current system isn’t non-linear. Confusing more diversity with different applies to the advisory group as much as it does, the skills we seek from our employees and future leaders.
There’s a global scarcity of people who have worked not just across systems but with the goal to reimagine them. We haven’t needed or prioritised those skills since the 1930’s and 1940’s which was the last time our systems failed in the West. Because of that scarcity you need to prioritise where you need non-linear experiences immediately and where you can develop them.
In an ideal world, you would have some non-linear experience in every function. Because your most linear function will dictate the pace of any ambitious regenerative strategy.
Where should you look to hire non-linear competency as a priority?
Innovation and Sustainability
Let’s assume that you have non-linear people at the interface of Sustainability, Innovation and Strategy. If you don’t have non-linear competency here, then it’s doubtful you would be reading this paper in the first place.
We know being backed by abundant, committed regenerative capital is critical so if we were working with a listed business this function, which is often full of linear people interacting with linear investors, would be a priority to strengthen. The right non-linear strategy here is critical to inspiring investors to re-imagine success.
If we take the three components of a regenerative strategy outlined in Part 1, as the basis for hiring priorities then you might consider the following as priorities.
If you can identify and attract a non-linear CFO hire one or key people in their team. Finance has traditionally followed more conventional career paths. Either way regenerative products and services are underpinned by regenerative investment models, with more complex objectives.
Non-Linear competency across the finance function is critical. This function needs to act as an accelerant not a break.
Communications (2 Key Elements)
Vision — A regenerative strategy will be scrutinized and challenged, more than that, initially it will be criticised. Truly regenerative strategies are rare and un-proven, trust is low.
So how you communicate the reasons why you are following this path to all people groups, not just owners and employees but all your stakeholders is critical. Communicate the right message and stick to it. Too often we’ve seen bold and promising initiatives diluted when subjected to hyper scrutiny
Movement Building — IKEA or any other firm with a regenerative strategy need to build movements of other likeminded businesses and capital, that’s a key component, they can’t change the system on their own.
Non-linear communication people are critical.
HR or People Function
3 Key Elements
Non-Linear People Strategy across all People Groups not just employees:
The big challenge for HR is to develop a Non-Linear People strategy that considers all the people groups in the ecosystem, not just the employee group. They can be much less comfortable outside the employee people group. Advising owners to seek more non-linear advice for example.
Non-Linear competency layered over existing leadership development models:
Non-Linear skills will be increasingly in demand as government models come under more and more stress, but in addition to, not instead of current leadership wisdom. More a re-balancing from more and more diversity within the current system. In our experience there’s a real appetite for this and is welcomed by current and future leaders alike.
Talent Share across systems:
It might take a decade and a complete shift in the way we live and learn for us to close the scarcity gap.
Collaborating across systems or secondment isn’t immersive enough. A regenerative strategy needs to consider talent share across local and central government models globally, as well as other regenerative businesses across multiple sectors.
The fragility of our current Government and Civil Society models.
In conclusion, when we speak to boards there is almost universal agreement that our current government models are increasingly struggling to create the appropriate policy frameworks and platforms the world needs. Much less consensus on the pace and extent of that failure, which of makes it very difficult for businesses to judge how far they need to shift their models to provide what citizens need instead of or in addition to what customers want, to thrive. Identifying where your business is going to operate along that need/want axis and committing to get there as quickly as possible is possibly the biggest challenge business faces today.
Get it wrong and your current boldest ever transformation strategy becomes insignificant perhaps irrelevant.
However, a regenerative strategy can also be seen as a unique opportunity, to build agility. A single unifying idea as a wrapper for the challenges of Technology, Climate, Peak Western Influence and everything else.