COBRA 2010 COBRA 2010 Paris Paris “REAL ESTATE AND CONSTRUCTION FUTURES: “REAL ESTATE AND CONSTRUCTION FUTURES: SUSTAINABILITY, RESPONSIBILITY AND SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP” LEADERSHIP” ‘Prevailing Pessimism’ ‘Prevailing Pessimism’ or or ‘Rational Optimism’ ‘Rational Optimism’ John S Ratcliffe D Tech, MA, BSc (Est Man), FRICS 1 Professor Henley Business School University of Reading Emeritus Professor DIT Ireland Visiting Professor SOBE University of Salford “THE PHOENIX” “ICARUS”
Transcript
COBRA 2010COBRA 2010
ParisParis
“REAL ESTATE AND CONSTRUCTION FUTURES:“REAL ESTATE AND CONSTRUCTION FUTURES:
SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP”SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP”
‘Prevailing Pessimism’‘Prevailing Pessimism’
or or
‘Rational Optimism’‘Rational Optimism’
John S RatcliffeD Tech, MA, BSc (Est Man), FRICS
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Professor
Henley Business School
University of Reading
Emeritus Professor
DIT
Ireland
Visiting Professor
SOBE
University of Salford
“THE PHOENIX”“ICARUS”
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We are all made of stardust. Many of the atoms in our body were formed in the
explosions of ancient suns, the products of the mystery and magic of creation and
evolution. We would not be here if it were not for the web of life that surrounds and supports us. An intricately interconnected wonder that started to evolve before there were humans, before there was the planet Earth; in the beginnings of space and time.
We have been around, as humans, for more than 200,000 years. In front of us, however,
is an immense challenge and perhaps a wonderful opportunity. Using popular
parlance, we face some tipping points which could lead either to collapse – or to
transformation.
With appreciation and apologies to Carl Sagan and Graeme Taylor
Contents
EXORDIUM..........................................................................................................................4‘ICARUS’ OR ‘THE PHOENIX’?..........................................................................................5
FIVE BIG QUESTIONS......................................................................................................101. Why Did it All Happen?.........................................................................................102. Where Are We Now?............................................................................................113. Which Future Lies Ahead?....................................................................................124. Can We Do Something About It?..........................................................................145. And, If We Don’t?..................................................................................................16
CREATING A NEW MINDSET:.........................................................................................18Futures, Foresight and Scenarios
CHALLENGES FOR THE BUILT ENVIRONMENT PROFESSIONS................................26Meta-Challenges (Exploratory).......................................................................................26Macro-Challenges (Interpretive).....................................................................................27Micro-Challenges (Empirical)..........................................................................................30
SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP.............................................35Sustainability...................................................................................................................35Responsibility..................................................................................................................36Leadership......................................................................................................................38
REAL ESTATE AND CONSTRUCTION FUTURES:SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP
Professor John S. Ratcliffe
EXORDIUM
The spirit of this work is founded on the premise that a new mindset, reinforced by fresh ways of thinking about the future, is needed by all those involved in conceiving, planning, designing, funding, constructing, occupying and managing the built environment so as to face the challenges, and grasp the opportunities, that lie ahead over the next few decades.
At the global scale, there is a growing awareness that humankind is on a non-sustainable course which could lead to ‘grandscale catastrophes’ (e.g. Lovelock, 2006; Rees, 2004; Taylor 2008). At the same time, however, we are unlocking formidable new capabilities (e.g. Senge, 2008; Nordhaus and Shellenberger, 2007; Ridley, 2010). This could be humanity’s last century, or a century that sets the world on a new course towards a spectacular future (Martin, 2006). The global economy seems to be outgrowing the capacity of the earth to support it. We are consuming renewable resources faster than they can regenerate : forests are shrinking, grassland are deteriorating, water tables are falling, fisheries are collapsing and soils are eroding (Hawken, et al, 1999). On top of this, there is climate change, rising and moving populations, an increasingly polarized world, impending energy and water wars, failed nations, food shortages and economic crisis. We live at a time of accelerating changes – both positive and negative – with the uncertainty of new technologies potentially more powerful than the sum of their parts. Indeed, it is possible to think that we have become like the sorcerer’s apprentice, having started something we can barely control!
Arguably, one of the single most important issues entwined In this imbroglio is the power of large corporations, and the professions which serve them, to shape the future of the planet. For the construction industry and the world of real estate, in all their forms, this means how they are proficiently led and properly managed. The debate, of course, rages around those twin concepts of ‘sustainability’ and ‘responsibility’, and few involved in the processes of land use development and property construction management can remain untouched or agnostic about either the ethics or economics of each. Palpably, both urban sustainable development and corporate responsible behaviour are fast becoming mainstream business imperatives, and, thereby, the lenses through which the future stewardship of the built environment is viewed by a more informed, imaginative and insightful professional leadership. As that great visionary, Buckminister Fuller, by whom I was inspired in the late 1960’s in Oxford, once declaimed:
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete”
The overarching proposition in what follows, therefore, is that individuals, organizations and agencies throughout the real estate and construction milieux must cultivate a change in mindset and foster a longer, deeper and wider view. For the greatest risk of our time is to be overtaken by inevitable surprises that could have been foreseen and for which we could have been prepared.
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‘ICARUS’ OR ‘THE PHOENIX’?
No one knows for sure what the future will bring, but there are sundry significant harbingers that a truly big change is happening.
A Confluence of Powerful Trends. Huge, extraordinary, universal trends, anyone of which could impact upon our present way of life, are coming together to precipitate an historic transition event.
Problems Seem Increasingly Intractable. Issues arising from these trends all individually tax the capacity and competence of bureaucracies, for if these exceptional disruptive events end up being concurrent, then the whole system is at risk.
The Demographics of Discord. Populations across the world are growing, declining and diversifying – all at the same time, offering social and economic opportunities for some regions and severely challenging established arrangements in others.
The ‘New Players’. The relative political and economic clout of many countries will shift over the decades ahead, so that an emerging multi-polar system portends less cohesiveness and effectiveness for the international system than does a bipolar or unipolar.
The Problems are Structural. They are deeply systemic, and constantly producing a complex set of interrelated situations that are not capable of understanding.
Some of the issues are a product of the way we live, our priorities, our perceptions and our paradigms. We are actually creating or exacerbating these problems because of the values we hold and the principles to which we adhere. Without singular and remarkable changes in the way we manage ourselves, each other, and the world at large, we will keep getting what we are getting!
In my own thinking, I am constantly finding myself swinging from the doom-laden prophesies of the prevailing pessimism to the prognostications of prosperity propounded by those of a more rationally optimistic persuasion. I call these conflicting visions of the future ‘lcarus’ and 'The Phoenix’ respectively.
‘Icarus’ – Prevailing Pessimism
Over the past few decades there have been any number of books and reports pronouncing just how dire the future looks, and how little time we have left to act (e.g. Erhlich, 1968; Meadows et al 1972; Tickell, 1986; IPCC, 2007; Stern, 2007). More recently, there has been a spate of alarming publications declaring that the warnings have been ignored, and it is now too late (e.g. Lovelock, 2009; Schneider, 2005; Hamilton, 2010). My own initially agnostic studies of the past few years as context and frame for the Built Environment Foresight 2030 project (Ratcliffe, et al 2009) increasingly led me down the latter pessimistic path, of humanity’s progress towards self-destruction. Strewn as it was with strange obsessions, collective hubris and a particular penchant for avoiding the facts, I called the resulting narrative ‘Icarus’. Some of the main recurring themes can be listed as follows.
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Population Growth. The carrying capacity of the Earth is critical. The explosion might be over, and, after peaking around 9-10 billion in 2050, it is likely to decline somewhat later in the century. In the meantime, however, there will be enormous social, environmental and economic pressures as populations grow, move, age and seek to fulfill their desires.
Climate Change. The evidence of global warming now seems overwhelming, and the Stern Review on the economics of climate change concluded that the rising temperatures (Stern, op cit):
“Create risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic recession of the first half of the 20th century”
(I was myself convinced of the veracity and threats of global warming by the findings that measured sea levels between 1970 and 2007 had risen 1.6 times faster than was forecast in the worst case predictions of the IPCC).
Food and Water Shortages. Demand for both necessities of life is likely to exceed supply. The Millennium Ecosystem Assessment (MEA, 2005) predicted that world demand for agricultural products will increase by up to 85% between 2000 and 2050. Is it possible for farmers to grow this much more food, when they are also faced with looming energy shortfalls, rising temperatures, topsoil erosion, spreading deserts, pollution, overfishing, loss of arable land to growing urbanization and decreasing supplies of fresh water? On the last point, the MEA ( ibid) estimates an increase in demand by 2050 of at least 30%, and possibly up to 85%. Water is a finite resource, and water resources are severely stretched in many regions of the world today. Yet the problems of supplying sufficient useable fresh water will clearly worsen over the decades ahead.
Safety and Security Issues. Fear and violence permeate the global culture. Terrorism of one kind or another is a likely hallmark of the century. Resource wars loom. Organised crime is one of the biggest growth industries in the world. Civil strife might materialise from the breakdown of law and order in cities unable to cope with a turbulent society. And the media continues to celebrate and popularize violent behaviour. It can be argued that as long as the world system is organized by values that promote greed, conflict and materialism in such measure, global avarice and consumption will continue to increase and the environment will continue to degrade.
Energy Deficit. Demand for energy by 2030 is judged to be 50% more than we use now. If present trends continue, most of this extra energy will still have to come from three non-renewable fossil fuels – oil, coal and natural gas. There are many other technologies under development with the potential to produce cheap, clean energy. Renewables, such as bio, solar, wind, wave and tide energy. And non-renewables, such as new nuclear fission, nuclear fusion and hydrogen conversion. There is little indication, however, that either government or business are taking the necessary investment steps to generate most of the world’s energy from clean or renewable sources in the next few decades. So everything will still depend on cheap oil. But, in a world of dwindling oil supplies and steadily mounting demand, very soon there will be no such thing. Take away cheap oil and the global economy will get the shock of it’s life. For, as Jeff Rubin proclaims (2009):
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“Whether you like it or not, your world is about to get a whole lot smaller!”.
My researches over the several years to the publication of Built Environment Foresight 2030 : The Sustainable Development Imperative in November 2009 painted an ever more disturbing picture of what lies ahead. That the world is now heading on an inevitable path to a grim and gruesome future, and that it is too late to divert it. The very next month saw the dismal deliberations of the Copenhagen Conference (December, 2009) where, with the manifest lack of urgency to act, there was a sense that we witnessed, not so much the making of history, but the ending of it.
‘The Phoenix’ – Rational Optimism
Over the past year or so I have sought to redress my own preoccupation with the prevailing pessimism. Defeatism is never a joyous state of mind. Though as John Stuart Mill wistfully wondered:
“I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.”
[Speech on ‘perfectibility’, 1828]
Pessimism is scarcely a new phenomenon. Societies contemplating: the epic saga of Gilgamesh; the ravages of the Black Death; the bitter strife of civil wars; the dark Satanic mills of the industrial revolution; the debauched gin-soaked populace of Victorian London; the abject horror of the Great War; Auschwitz, Hiroshima or the ‘killing fields’ of Cambodia; must all have questioned both the sanity and sustainability of humankind. Indeed, as Ridley (2010) relates, pessimists have always been ubiquitous and frequently been feted, quoting Adam Smith at the start of the industrial revolution:
“Five years have seldom passed away in which some book or pamphlet has not been published pretending to demonstrate that the wealth of the nation was fast declining, that the country was depopulated, agriculture neglected, manufactures decaying and trade undone”
[The Wealth of Nations, 1776]
The evidence, however, suggests that life is getting better, and at an accelerating rate. As Ridley avers (ibid): food availability, income and lifespan are up; disease, child mortality and violence are down – all across the globe. Africa is following Asia out of poverty; the internet, the mobile phone and container shipping are enriching people’s lives as never before. The pessimists who dominate public discourse insist that we will soon reach a ‘turning point’ and things will start to get worse (ibid). But they have been saying this for several hundreds of years.
Unquestionably, some profound transformations are under way on Earth, such as climate change, urbanisation, and biotechnology. As Stewart Brand asserts in his seminal work Whole Earth Discipline (2010), climate change is finally pushing us towards recognising the need to manage the planet as a whole; urbanisation is altering fundamentally humanity’s land impact and wealth; and biotechnology is becoming the world’s leading engineering tool.
So what, rationally, do we have to be optimistic about?
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Urban Prospect. In both my travels and my travails I have become increasingly aware that the slums, shanty towns and informal settlements that inevitably characterise the pervasive process of global urbanisation and the inexorable growth of mega-cities are not to be feared in the way that many suggest. To planners, for instance, they seem chaotic – yet to ecologists they are organic, and fine examples of complex adaptive systems. Slums can be seen as catalysts of innovation and engines of income generation; exhibiting the beneficial economics of agglomeration and the greater productivity of connection. With their maximisation of density, their minimisation of energy and their optimisation of proximity, they can also be deemed to be ‘green’! Of course there are problems of crime, disease and disorder, but civic focus should fix on the faulty social supports for these facets of behaviour, and not on the urban form that facilitates economic function.
Bio, Nano, Info and Geo Technology. We have been aware of the profound impact of technology for a long time. Indeed, it was Cicero who observed how:
“By the use of our hands we bring into being within the realm of Nature, a second nature for ourselves.”
[de Natura Deorum, 45BC]
It is not possible in this restricted text to explore all the potential innovations and impacts of technological change that could help tackle the dilemmas and dangers ahead and offer bold and creative sets of policies and solutions for producing a more optimistic future and a more sustainable society. Some of the main threads that will weave through the tapestry of technological change can, however, briefly be laid out as follows.
(i) Bio-technology. Humanity is on the brink of wielding greater control over the biology of life – how we are born; how our food supply is created; the traits that our children may have – than has ever been imagined. Taking one issue alone ,however, the hysteria and hyperbole surrounding genetically modified food must sometime cease if we are to feed ourselves in the future. As far as I can tell from my reading, there is not a shred of evidence of risk to human health. The problem with the much vaunted ‘precautionary principle’ is that it makes all scientific progress guilty till proven innocent. What is needed, perhaps, is more of a ‘reversibility principle’ or ‘anti-catastrophe’ principle instead [ibid]. On a wider scale, there can be little doubt that the domestication of biotechnology will dominate our lives over the next 50 years, like computers have the last.
(ii) Nano-technology. Linked to this is the basic idea that instead of making things by cutting or otherwise shaping bulk material with tools that we can see and handle, extremely tiny machines – molecule sized – can just about build anything by putting it together atom by atom. It can design completely new things from scratch. The main problem is getting the process started, for it would appear that you need nanotech assemblers to make nanotech assemblers. But there is now a group of researchers called the Nanofactory Collaboration putting together the first road-map for nanofactory development [Schmidt, 2008].
(iii) Information and Communications Technology (ICT). To date, the ICT revolution has largely been confined to the simple technological feat of converging telecommunications with personal computing. But there is a hope it could hold a higher promise – to transform communication as a human act of sharing meaning about values, attitudes, beliefs and experiences. Some argue that to create sustainable futures, new ways must be found to make information and
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communication inclusive, participating and mindful of future generations. Further, that this new means of communication must also emerge authentically from humanity’s diverse cultures, be more concerned with the quality of information shared than with the sheer volume of the internet across the world, and be transformed from its technocratic bias in order to move toward a truly global “conversation of civilization” [Inayatullah & Legett, 2002]. At a more prosaic level, but with massive impact, the mobile or cell phone is transforming the lives of people throughout the world in ways hitherto unimaginable. Connectivity, it has been said, is productivity (Sullivan, 2007).
A New Economics. When viewed in out-of-equilibrium formation, economic patterns are all too often simplified into the facile equilibrium of standard economic models. In reality, economics are ever-changing, showing perpetually novel behaviour and emergent phenomena. The challenge is to portray the economy not as deterministic, predictable and mechanistic; but as complex, process-dependent, organic and continually evolving (Ratcliffe, et al, 2008). My own search for a ‘new economics’ was enlightened a decade or so ago, first upon discovering the works of Hazel Henderson who, in Building a Win-Win World (1996), demonstrates how the global economy is unsustainable because of its negative effects on employees, families, communities and the ecosystem. But how win-win strategies can become the norm at every level when people see the true current and future costs of short-sighted, narrow economic policies. And second, when I was introduced to the concept of Natural Capitalism (Hawken, et al, 2000) which espouses a new type of industrialism that values natural capital and focuses on resource rather than human productivity. This, proclaims Bill Clinton on the cover, is a big deal!
The Natural Step for Communities. As the signals of distress from our planet become increasingly shrill, the best hope for a sustainable future, some argue, lies in enlightened local leadership. I would add, that the major causes of planetary suffering need global stewardship, universal standards and world governance. We actually need both. Nevertheless, one can sense a wave of optimism spreading from two roughly similar movements. First, the Natural Step, which, through its founder, Karl-Hennik Robert, has pioneered a ‘backcasting from principles’ approach to effectively advance society towards sustainability. Derived from the laws of thermodynamics, the Natural Step framework establishes a four-system set of conditions that lead to a sustainable society, and has been the successful basis for over 70 towns and cities in Sweden and the United States to form eco-communities (James & Lahti, 2008). Second, is the Asset Based Community Development (ABCD) movement. This is a concept that seeks to uncover and highlight the strengths within communities as a means for sustainable development. The basic tenet is that a capacities-focused approach is more likely to empower the community and, therefore, mobilize citizens to create positive and meaningful change from within. Instead of concentrating upon a community's needs, deficiencies and problems, ABCD helps them become stronger and more self-reliant by discovering, mapping and marshalling all their local assets. Few people, it is held, realize how many assets a community possesses (Kretzmann & McKnight, 1993).
New Nuclear. In terms of securing a sustainable future with any degree of rational optimism, I have come to the conclusion that not only is energy the key, but new forms of nuclear power are the solution. Within the next 10 years most major economies will choose nuclear power as the clean, efficient, high capacity, baseload source of electricity. It will also become safer, cheaper and less controversial as third-generation
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fission reactors take over and fourth- generation ones start to materialise. By 2030 nuclear fission might also be a reality. Within the same period, the current 16% share of total electricity generation by nuclear will approach 30%. Distributed energy generation, moreover, is generally accepted to be a critical component of future energy policy, and there already exist prototypes of small nuclear generators for local power supply [Hyperion, NuScale, Adams Atomic Engine, Toshiba 4S]. These use low-enriched uranium hydride as fuel, which cannot make a bomb, or meltdown, or need containment. The process is self-limiting and runaway chain reaction impossible. They are buried about 3m underground and need minimal intervention being monitored around the clock by sensor, factory sealed, producing waste the size of a football. They are efficient, safer, transportable, scalable, and swappable. If only they weren’t nuclear! Having closely examined the pro’s and con’s of nuclear power for some years, I am firmly convinced that our sustainable future – certainly for the period to the end of this century depends on it [Ratcliffe & Saurin, 2007].
FIVE BIG QUESTIONS
Over the past several months I have been reflecting upon the turbulence of the last few years, contemplating the current complexity of the world and exploring, in my mind, what the prospects are for the future. Quite a quest! But one from which ‘Five Big Questions’ emerged.
Why did it all happen?
Where are we now?
Which future lies ahead?
How and when can we do something about it?
And, what happens if we don’t?
Some random thoughts on each conundrum are ranged below.
1. Why Did it All Happen?
The suddenness of the recent financial crisis resembled, in retrospect, all the nightmarish qualities of a Kafka tale. One moment all was well – the next a dark dream descended. Some deeper causal trends can now, with what we hope is hindsight, be discerned.
Waves of Creative Destruction. Socio-economists would tell us that the only way capitalist economies develop is through successive waves of creative destruction. These are waves based on a set of technologies that surge over a long period, 50 to 80 years, throughout society. The ‘industrial revolution’, the ‘age of steam and railways’; the ‘age of steel, electricity and heavy engineering’; the ‘age of oil’; and now the ‘age of ICT and resource constraint’. Characteristically there is a period of ‘eruption’; then ‘frenzy’; then ‘crash’; and then a ‘turning point’ to a new Golden Age and Time of Maturity before the next wave comes. Arguably, we are witnessing the last ‘hurrah’ of the age of oil and at a turning point towards a new common sense through a growing awareness of the need to conserve our resources and protect our planet. Hopefully, the current crisis represents what James Alexander (2010) calls a transition between eras. It was inevitable – and necessary.
Depletion of the West. A chronic cause of the crisis is a growing difficulty of western economies to attract sufficient resources from elsewhere to compensate for its own
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domestic depletion. Indeed, it can be argued that the West institutionalized the globalization of markets, especially capital markets, in order to attract resources from the rest of the world [Attali, 2010]. It has now lost self-respect, confidence, vitality and even demographic vigour. The West preserves some strength and dominance due to the savings of others – but for how long?
Flawed Financial Systems. The immediate causes of the global financial crisis were manifold, but include [Hu, 2010]: excessive leverage; the inadequate capital base of banks; over-reliance by financial institutions on wholesale funding models; a failure to heed against liquidity and counterparty risks; blind faith in external credit ratings; the opacity of markets for credit derivatives; the process of securitization running amok; lax supervision of sub-prime mortgage lending; the absence of an effective resolution regime capable of the orderly unwinding of large failing financial institutions; and the flaws of munificent compensation practices that led to short-term behaviour and excessive risk-taking. If we fail to understand and correct the systemic implications of large complex financial institutions, the global financial system will likely be haunted by the ‘too big and too connected to fail’ syndrome for years to come [ibid].
Macro-Economic Mismanagement. Perhaps one of the greatest casualties of the recent crash, and its aftermath, has simply been ‘economics’ itself. Almost all the long-held ideas at the core of the economic discipline have been shattered – the resilience of markets, the power of monetary policy and the stability of the business cycle for starters. This is made most obvious by the clear disconnect that exists between the ‘real’ economy, which produces value, and the ‘financial’ economy, which recklessly, gambles peoples savings and tax revenues. In the words of economist Paul Krugman:
“The surge in asset values has been an illusion, but the surge in debt has been all too real.”
It has to be added that the reputation of the West for economic comprehension and financial competence lies in tatters. China quietly exults!
Sheer Greed. Who can really cast the ‘last’ stone? Don’t most of us who borrowed the money, invested avariciously, and spent foolishly have to bear some part of the blame? Whilst human greed and self-deception are an historical constant, what was different this time in this era of super-connectivity was the speed and virulence with which it reverberated around the world.
2. Where Are We Now?
Hopefully, as we look around, we are experiencing a societal shift from an era defined by consumption in an age of abundance to an era defined by sustainable living in a resource-constrained world [Alexander, op cit]. What do we see?
The End of Market Fundamentalism. Events over the past few years have certainly highlighted the defects of capitalism, shaken the faith in market fundamentalists, and enhanced the case for greater government control. Arguably, however, what failed above all else was market regulation, not capitalism as a whole. Most modern economies are ‘mixed economies’ already subject to extensive government intervention and regulation, but within which, market failures persist. The focus,
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perhaps, should be on improving the elimination of these failures not on setting aside the efficiencies yielded by markets. Nevertheless, it is worth remembering for a moment the words of Joseph E. Stiglitz in 2008:
“In this sense, the fall of Wall Street is for market fundamentalismwhat the fall of the Berlin Wall was for communism”
[Huffington Post Interview, 16/9/08]
Perhaps we can start to take our values from culture and bring morality to the market?
Loss of Trust in Institutions. Almost as never before we have lost our trust in the institutions of society. In banks, in companies and in government. Crises are very psychological once trust and confidence are shattered and it will always take time to rebuild them. This crisis will be no exception. It will require a serious structural change in the architecture of economic and financial systems to get it right, and get people believing in it again.
Enterprise Not Speculation. The aim must be to replace the ‘speculator’, whose main function is to provide liquidity to the markets, by the ‘entrepreneur’, whose main function is to create value in the real economy, as the new ‘saviours of the global economy’.
Peak Oil or Peak People? The world is not running out of oil – at least not yet. What society faces, and soon, is the end of abundant and cheap oil (Taylor, op cit). Though in terms of efficiency gains it has been shown that it would cost less to displace all the oil that the US uses than it would to buy that oil from new sources (Lovins, 2007). What we really need is for oil companies to transform themselves into energy companies. The question that almost dare not speak its name, is whether or not the world will have the resources to provide for the needs of a growing population? Let alone their wants. Have we already reached ‘overshoot’? (Meadows, et al, 2004).
What Would Google Do? This, however, is the question I am most fond of posing at the moment. As Jeff Jarvis does in his book of the same title (2009), where he ponders that no company, executive, or institution truly understands how to survive and prosper in an internet age – except Google! In management, commerce, news, media, manufacturing, marketing, service industries, investing, politics, government, education and even religion, answering the question – what would Google do? - is the key to navigating a world that has changed radically and forever (ibid). A world of flat organizations, endless innovation and new digital order where power and wealth are more evenly distributed. A post-organisation age in which the masters of the new universe are those ‘numeratii’ with doctorates in mathematics (Baker, 2009), and the internet will empower everybody. The power of the individual has, perhaps, never been greater.
3. Which Future Lies Ahead?
There is a mantra of the moment which almost monotonously maintains that we are at a turning point in history. The chant is not new, but the case currently can be made that we are potentially on the cusp of a fresh industrial revolution which can address the triple challenges: global economic recovery; energy security; and climate change. What is missing, however, is a collective and collaborative vision and game-plan that can bring the
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myriad issues and priorities together for combined action. What follows suggests a few factors that might influence this coordinated approach.
Sustainable Living In A Resource Constrained World. This has to be the overarching goal, though it will require sweeping societal changes by individuals, by business and by government. In turn, this will require a move from growth being defined purely by economic production to growth being understood as sustainable wealth in its broadest sense, including well-being as a measure. Most of all, it will need intervention and strong leadership at all scales of governance – to which I shall return.
From West to East. A profound shift in the balance of power is taking place. A shift which could usher-in a super-cycle of strong sustainable growth for those economically best positioned to succeed. One thinks immediately of China and India, but there are others. The flow of savings should also switch. Hitherto, they have flowed ‘uphill’ from surplus economies in the East to deficit countries in the West. Looking ahead, the West must spend less and save more, and the East, Middle East and Africa must do the reverse. In all this, it is heartening to see the G20 start to emerge as a policy forum for helping to shape the future. Perhaps, moreover, we should all get better acquainted with ‘Eastern’ ideas and practices of governance?
A Multi-Polar World. Not only will there be an economic shift of power from the ‘old’ world to the ‘new’, but the ideas of the new world, the universities, the publishing empires and the entertainment enterprises will start to affect the old. Chinese and Indian attitudes towards family life could influence European lifestyles; Latin America will change North America; Asian concepts of company organization and management could impinge on Western; and Chinese universities could collectively become a major knowledge hub for the world. There is little doubt, the 21st Century will be a multi-polar world – the challenge is to devise a system of global governance to manage it for good.
New Economic Thinking. As well as the future promise of Natural Capitalism previously advanced, there is already the present victory of ‘neuro-economics’ (Malleret, 2010). Neuroeconomics combines psychology, economics and neuroscience, to study how people make decisions, categorise risks and rewards and interact with each other. It has its critics, but in the face of ever-growing complexity, we are all victims of what neuroeconomists call ‘bounded rationality’. In similar vein, there are the growing fields of ‘socioeconomics’ and ‘socionomics’. Socioeconomics is the study of the social result of economic reactions; whereas socionomics is the study of social mood and its results in economic actions. Both disciplines examine changes in the social environment, but socionomists reveal the cause behind these changes and have a tool for anticipating them. The point being that not only are economies changing, but so is economics.
From Conspicuous to Conscious Consumption. Throughout the world consumption is becoming an addiction. Advertising and the media generally glamorize being rich and famous, and consuming is equated with beauty, youthful energy, desirability, happiness and personal freedoms. These are destructive illusions (Taylor, op cit). There are not enough resources on earth to satisfy the cravings created. A future needs to be conceived where conscious consumption will progressively replace conspicuous consumption. Where small pleasures, inexpensive pastimes and the simpler things in life are back in vogue.
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4. Can We Do Something About It?
There will have to emerge a ‘new world order’ in the 21st century. Not just out of dewy-eyed idealism or out of a basic belief in the inherent brotherhood of mankind, but, as John Bruton, former Taoiseach of Ireland, maintains, because a new world order will be necessary if we are to have the predictability we need to perform basic economic and social functions in a globalised economy [Bruton, 2010].
A Global Rule of Law. If I have to select one element of progress that would support and secure a rationally optimistic view of the future it would be the formation of a ‘global rule of law’. Philosophy might give us the purpose and principles; technology the tools and techniques; but a set of rules accepted, trusted and enforced worldwide through a framework of global institutions is necessary to maintain a progressive path towards social, economic and environmental sustainability.
Defined By Our Values. Any new world order that emerges, however, will not rest on a global rule of law alone. New regulations and legislation will not, of themselves, correct the wrongs of the old order. Ultimately we are all defined by our values, and value systems play an important role in any society. Consequently, one cannot understand social, political or economic change without taking these value systems into account. It is not too extravagant to suggest that the survival of mankind will depend to a large extent, on the ability of people who think differently to act together. Three major studies have helped me begin to comprehend how this might be better addressed. First, the work of Geert Hofstede (1980) who identifies four main dimensions along which dominant value systems can be ordered, and which affect human thinking, organizations and institutions in predictable ways: ‘power distance’; ‘uncertainty avoidance’; ‘individualism’; and ‘masculinity’. Second, Ronald Inglehart (1997) who explains and maps how modernization goes through two main phases, each of which brings distinctive changes in peoples worldviews. One, a shift from traditional to secular-rational values (bringing bureaucratization, centralization, standardization and the secularization of authority). The other, a shift from survival values to self-expression values (bringing increased emancipation from both religious and secular-rational authority). And third, Shalom Schwartz (2007) who expounds a theory of seven cultural value orientations (Harmony, Embeddedness, Hierarchy, Mastery, Affective Autonomy, Intellectual Autonomy and Egalitarianism) from which he derives several cultural value dimensions that permit more finely tuned characteristics of cultures. What matters is that all the surveys show that social and cultural values are closely linked to a society’s level of economic development, and that as the world economy becomes more interconnected and interdependent, values and social structures also become more transnational. However, not all post-industrial values support the emergence of a flourishing and sustainable global system. While the increasing emphasis on individuality and freedom from traditional restraints means that many people value diversity, it also means that many are more selfish. Although the number of idealists is increasing, the number of self-centred hedonists is also on the rise (Taylor, op cit).
Ethical Business Leadership. Doing well by doing good has become a watchword of modern business practice. Corporate social responsibility is now an accepted aim of all major organizations. There can, moreover, be few people in business today who doubt that social and environmental responsibility will be one of the defining business drivers for multinational corporations in the first part of the 21st century. Indeed, it is no
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longer just about doing business responsibly, it is about seeing social and sustainability challenges as opportunities for innovation and business development. As one leading CEO has it (Cescau, 2008):
“Sustainability enables you to think creatively and differently about every aspect of your business from raw materials to waste disposal.”
More than just the ‘zeitgeist’ of sustainability, however, ethical business leadership is about integrity. For corporate conduct today, whether good or bad, implants a much greater footprint than ever before, on human communities and the natural environment alike. Furthermore, as corporations have become more powerful, the civic institutions that saved them in the past have become weaker. At heart, of course, ethical leadership and business integrity are about relational awareness which occurs in all the five dimensions of corporate life : the cultural, interpersonal, organizational, civic and natural (Brown, 2005). And for all of us, the point is well made elsewhere that stripping corporate morality away from personal morality ultimately corrupts both (Baldstone, 2003).
The Great Leap Downward. In his book The Fortune at the Bottom of the Pyramid CK Prahalad (2009) advances the concept that the poorest segment of society, perhaps 4 billion or so, could actually be the largest and fastest-growing market for companies. This segment, the ‘bottom of the pyramid’, forms a massive body of consumers, often overlooked by marketeers because of their low individual purchasing power. Collectively, however, this section has immense potential. Fostering entrepreneurship at the grassroots, especially through micro-financing initiatives such as those sponsored by the Grameen Bank, can empower the poor and raise them from poverty whilst generating profits for companies. New and creative approaches are needed to convert poverty into an opportunity for all concerned if rational optimism is to prevail. This is a major challenge. But even more challenging is tackling the problems of the ‘bottom billion’ who live, or just survive, in failed states that are falling behind and falling apart. An agenda for action is starting to emerge, narrowing targets and broadening instruments (Collier, 2008), and looking to the G8 and G20 for leadership, but the issues of corruption, political instability and resource management still cause one of the great crisis facing the world today.
A New Mindset. We are entering a period of what Peter Senge (2008) calls ‘necessary revolution’ where organizations around the world will have to change from the dead-end ‘business-as-usual’ tactics to transformative strategies that are essential for creating a flourishing, sustainable and responsible environment – natural, built and business. This necessary revolution demands a fundamental shift of mind – a ‘metanoia’ as the Greeks described it – whereby organizations operate with a conviction that they can imagine and shape their own destiny. In developing this new mindset, I have been hugely influenced by Howard Gardner’s Five Minds for the Future (2007) in which he explains that the cognitive abilities that command a premium in the years ahead will embrace the following:
(i) the disciplinary mind – a mastery of major schools of thought (mathematics, philosophy, economics) and at least one professional craft;
(ii) the synthesizing mind – ability to integrate ideas from different disciplines or spheres into a coherent whole and to communicate that integration to others;
(iii) the creating mind – capacity to uncover and clarify new problems, questions and phenomena;
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(iv) the respectful mind – awareness of, and an appreciation for difference among human beings; and,
(v) the ethical mind – fulfillment of one’s responsibilities as a worker and as a citizen.
Armed with these well-honed capabilities we should all be better equipped to deal with what might be expected in the future – as well as what cannot be anticipated. Certainly, without this transformational mindset, those engaged in the stewardship of the built environment will be at the mercy of forces they cannot understand.
5. And, If We Don’t?
Sometimes, it is said, facing up to the truth is just too hard. The recent crisis has made it blatantly clear that a growing disconnect exists between the long-term nature of the global problems we face and the short-term solutions proposed by policy and decision-makers to address them.
The Perfect Storm. There is a serious danger that we are heading inexorably into the ‘perfect storm’ with rising demand for food and energy and the declining availability of fresh water, productive land and biodiversity of life – all compounded by the looming onset of climate change and the threatening clash of cultures. Regrettably, the thought materializes that our current economic and world order is incapable of bridging the gap from what is scientifically and technologically necessary to what is socially and politically viable. Arguably, the global system will have to be ‘shocked’ as traumatically as possible if we are to have any real chance of managing our long-term destiny. Where are you now Thomas Malthus?
Resource Wars. Conflict over valuable resources – and the power and wealth they confer – is fast becoming a prominent feature of the global landscape. International security experts contend that in the early decades of the new millennium, wars will be fought not over ideology, but over dwindling supplies of precious natural commodities. Natural resources are the building blocks of civilization and an essential requirement of daily existence. If we rely on warfare to settle disputes over raw materials, the human toll will be great (Klare, 2002).
Détente with Dilemma. Well-schooled in solving problems, governance at all scales needs to re-educate itself in the art of acting intelligently and compassionately in situations that have no solution. Agencies and organizations of all kinds will have to find tools and processes for teasing-out the first-, second- and third-order dilemmas in these situations. They will also have to reconcile multiple stakeholders and design processes that generate new values out of apparent conflicts of interest. The challenge is to reach some kind of détente with dilemma in a world with no externalities.
Protectionism, Gangsterism and Lawlessness. Lack of international cooperation and disputes between the West and emerging markets over trade, capital transactions, access to resources and climate change could end up with rising levels of protectionism that threaten to reverse what is already a slowing process of globalization. Over the past quarter of a century, moreover, the nature of crime has changed; becoming more organized and more transnational. It has reached macro-economic dimensions, turning into a global business operating in collusion with legitimate activity, and is rapidly turning into a widespread threat to the security of cities, states and even entire regions. In so many urban centres, in rich as much as in
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poor countries, authorities have lost control of the inner-cities to organized gangs and lawless thugs. The web, as well, is fast becoming a virtual world of cyber-crime and terrorism threatening vital infrastructure and state security. I fear these forces of protectionism, criminality and lawlessness will grow. These are cross-cutting issues around the world and require a system-wide response by a more effective and empowered United Nations.
Humanity’s Last Century. There lies in front of us both an immense challenge and a wonderful opportunity. The challenge is to avoid the catastrophic collapse of our social and natural worlds. The opportunity is finally to end humanity’s ancient addiction to war and greed and to create a peaceful and healthy civilization. This, it is argued, is possible because the same forces that are driving us to self-destruction are creating the conditions for constructive change (Taylor, op cit). The real difficulty lies not in developing new ideas – but in escaping from the old ones.
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CREATING A NEW MINDSET:Futures, Foresight and Scenarios
It is common to hear clarion calls about ‘changing minds’. A change of mindset is so often the necessary step towards effecting significant progress. Minds, of course are hard to change. And sometimes one's own mind the hardest of all, though that is where it must start. Current thinking about intelligence, creativity and leadership now suggests that traditional views about mind change as a sudden ‘epiphany’ are entirely wrong. Instead, it has been shown that we change our minds gradually, in identifiable ways, that can actively and powerfully be influenced (Gardener, 2004).
What I have found over the past fifteen years or so since I first became involved in the ‘futures field’ in a formal way, is that ‘futures thinking’, adopting the concepts, methods and techniques involved, can help us all be more ‘mindful’. Taking longer, wider and deeper perspectives, as well as exploring alternative and very different viewpoints. Futures studies can also expedite and strengthen the process of change – individually and collectively – by questioning basic assumptions, invoking a sense of crisis, harmonizing attitudes, testing solutions and future-proofing policy proposals. Most of all, however, I have found futures thinking to be an indispensible component of leadership
Exhibit 1: Creating Futures (Michel Godet)
The Futures Concept
There is a growing realisation, in all areas of life, that the future is not fixed. The notion that the future can be ‘shaped’ or ‘created’ has gained currency over the past decade, and is increasingly the basis upon which organisations of all kinds make their plans. As Charles Handy put it (1989):
“The future is not inevitable. We can influence it if we know what we want it to be”.
By trying to make things happen, rather than guess what might happen, organisations, and individuals for that matter, have to embrace uncertainty, and deal with it by continually reviewing a wide range of policy options. This is the business of discovery and the concept of futures. The crucial questions most usually facing those working in the futures field in the examination of an issue or policy include:
What are the main continuities? What are the major trends? What are the most important change processes? What are the most serious problems? What are the new factors ‘in the pipeline’? What are the main sources of inspiration and hope?
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A useful metaphor to describe the aim of the futures field is to provide a ‘map of the future’. In essence, futures studies supplies policy makers and others with views, images and alternatives about futures in order to inform and protect decisions in the present. It is important to note, that the underlying purpose of futures studies is not to make predictions, but rather to gain an overview of the present human context in order to illuminate alternative futures. Interpretation not forecast.
Exhibit 2: Futures Oriented Thinking (Outsights)
Put very simply, the purposes of future studies are to discover or invent, examine or evaluate, and propose possible, probable and preferable futures. They may, however, be more usefully summarised as (Slaughter, 2002):
Raising issues of common concern that may be overlooked in the conventional short-term view.
Highlighting dangers, alternatives and choices that need to be considered before they become urgent.
Publicising the emerging picture of the medium-term future in order to involve the public in the decision-making process.
Contributing to the body of knowledge related to foresight and the macro-processes of continuity and change that frame the future.
Identifying the dynamics and policy implications of the transition to a sustainable world and placing them on the global political agenda.
Facilitating the development of social innovations. Helping people to become genuinely empowered to participate in creating the
future. Helping organisations to evolve in response to the changing global outlook. Providing institutional niches for innovative futures work.
Foresight
Foresight is a systematic, participatory, future-intelligence-gathering and medium-to-long-term vision building process aimed at present day decisions and mobilising joint actions. It arises from a convergence of trends and underlying recent developments in the fields of ‘policy analysis’ and ‘strategic planning’, as well as futures studies. Foresight brings together key agents of change and various sources of knowledge in order to develop strategic visions and anticipatory intelligence. In this way, there are said to be five essential elements of foresight – anticipation, participation, networking, vision and action (ibid). A particular manifestation of this has been the undertaking of what are known as technology foresight exercises in a number of countries worldwide. Typically, the technology foresight process involves the identification of various principal sectors, the
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formation of consultative panels for each sector comprising leading figures from the field, and the use of either “Delphi” or “scenario planning” techniques, or both, to identify, explore and test future potential markets and prospective opportunities in a climate or risk and uncertainty. From this, robust and flexible strategic policy options are chosen, and a shared mindset among the various participants is fostered. The most important aspects of the Foresight process have been précised as being (Irvine & Martin, 1984):
Communication between parties concerned. Concentration on the longer term. Co-ordination of research and development. Consensus created on future directions and policies. Commitment generated among those responsible for implementation of policy.
A defining characteristic of foresight is that, in essence, it is a human capacity to think ahead and to forecast possible outcomes of present decision.
STAGE OBJECTIVES OUTPUT
Framing Scoping the project : attitude, audience, work environment, rationale and purpose, objectives and teams.
Focal Issue
Scanning Collecting the information : the system, history and context of the issue and how to scan for information regarding the future of issue.
Information
Forecasting Describing baseline and alternative futures : drivers and uncertainties, tools, diverging and converging approaches, and alternatives.
Baseline andAlternative Futures
Visioning Choosing a preferred future : implications of the forecast, and envisioning desired outcomes.
Preferred Future
Planning Organising to achieve the vision : strategy, options and plans. Strategy and Plans
Acting Implementing the plan : communicating the results, developing action agenda and institutionalising strategic thinking and intelligence systems.
Action
Exhibit 3: Thinking About The Future: Guidelines For Strategic Foresight (Hines and Bishop, 2006)
Prospective
The prospective, or more familiarly “la prospective”, has French origins, but is now being more popularly applied across Europe in a variety of strategic planning settings. In the francophone context, however, ‘prospective’ refers to a much wider approach and activity than other futures methodologies as it comprises not only the study of the future, and an
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evaluation of alternative outcomes against given policy decisions, but also the will to influence the future and to shape it according to society’s wishes. Furthermore, it is a very formalised, inclusive, comprehensive and rigorous methodology when compared to more generalised future studies. In many ways, it is similar to foresighting, but would be better understood as a specific means of applying the foresight approach. The two methodologies have been contrasted as: foresight would be the capacity to hear, but prospective would refer to the proficiency to listen to particular things. Put another way, prospective covers the concepts of ‘preactivity’ (understanding) and ‘proactivity’ (influencing), whereas foresight concerns itself with ‘preactivity’, but the idea of ‘proactivity’ is missing (Godet, 2001). In any event, the term prospective and its application across a broad range of policy issues on a wider territorial basis than hitherto is likely to gain greater currency over the next few years.
Exhibit 4: Prospective Through Scenarios (John Ratcliffe)
Horizon Scanning
A prerequisite of virtually all serious futures work is environmental scanning. In essence, this involves a broad scrutiny of all major trends, issues, innovations, events and ideas across a wide spectrum of activities. The objective of environmental scanning is not to predict the future but to help decision makers in situations of increased uncertainty. It has become increasingly important, mainly as a consequence of the growing need for planners and policy makers to have information on the general environment outside their specific area of interest as well as within it. The perspective gained is thus more of an outside-in than an inside-out one. Careful scanning results in the development of a body of information with a range of uses, and the process of scanning itself has the value of sharpening observation and analytic skills while providing opportunities to hone discriminations, judgement and expression.
The Delphi Survey Technique21
A popular tool in futures studies is the Delphi Survey Technique. Developed initially at RAND in 1953 and elaborated by them in 1964, it uses a panel of experts to judge the timing, probability, importance and implications of factors, trends and events in respect of the problem in question. Invariably, the Delphi technique involves a research and communications process that includes at least eight steps (Bell, 1997).
The specification of some topic or subject whose possible, probable andpreferable futures are to be investigated.
The construction of a questionnaire as an instrument of data collection. The selection of some individuals (respondents) whose opinions are to be
studied, usually experts (to serve as “oracles”) on the topic being investigated. The initial measurement of the opinions of the respondents by means of a
questionnaire. The preliminary organisation and summary of the data resulting from the
initial measurement. The communication of the results of the initial measurement of opinions as
feedback to all the respondents. A re-measurement of the opinions of the respondents as they have been
informed and may have been changed by their knowledge of earlier resultsincluding those of other respondents supporting comments for their opinions.
An analysis, interpretation and presentation of the data and the writing of thefinal report.
The primary abuse of the Delphi technique is to confuse its responses with answers. Delphi is best used as an input to a larger forecasting and futures process. It produces judgements or estimates or probabilities, rather than objective or factual information. As most profound change starts on the periphery, moreover, Delphi can all too often dismiss its early signals.
The Strategic Conversation
The strategic conversation is, in essence, an active and creative ‘in-depth’ interview technique used by The Futures Academy in most studies it conducts. The reasons for using such an approach can most usefully be summarised as follows:
Establishing the goals and objectives of the agency concerned. Comprehending the mental models of the decision makers. Bringing to the surface trend-breaking developments in the
business/organisational/community environment. Correcting institutional myopia. Recognising fresh external signals of prospective change. Eliciting strategic insights and intuitions. Discovering the concerns of “key players” about the future. Identifying burning questions of the moment. Confirming issues and trends. Assisting in understanding predictability, impact and uncertainty. Starting to form a strategic vision. Helping to construct a set of scenario logics. Capturing a range of perspectives. Tackling and reducing complexity. Determining competitive advantage and distinct competencies.
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Committing decision makers to the scenario-planning process. Diagnosing difficult decisions or awkward people that might hamper the
process and defusing them. Setting the strategic agenda.
The method is described more fully elsewhere but it is worth stating that the evolution of my own approach towards interviewing – moving from a more structured, disinterested format, to a less formal, participatory style – mirrors the development of interviewing across the social sciences from structured questions to negotiated text.
Causal Layered Analysis
Several different techniques have been developed over the past few years which introduce and apply a ‘layered’ approach towards futures studies, prospective processes and foresight methods. In general, they enable the practitioner to move progressively to ever greater levels of understanding as new strata of meaning are discovered or developed. A generic term for the technique is Causal Layered Analysis (CLA). It has been found to be particularly productive in futures workshops where participants come from different cultures or possess disparate ways of viewing a problem. CLA is best used prior to scenario construction as it permits a vertical dimension for a framework by which scenarios of different types can be created and compared.
Some of the main benefits of CLA have been described as follows (Inayatullah, 1998):
Expanding the range and enriching the content of scenarios. Helping to combine different ways of knowing and understanding among
participants. Appealing to a wider range of individuals with contrasting ways of thinking
and expressing themselves. Stratifying participants positions, both conflicting and harmonious. Moving the debate and deliberation beyond the superficial and obvious to the
deeper and more cryptic. Allowing for an array of transformative actions to be appraised. Producing policy options that are informed by alternative layers of analysis.
Commonly, four layers of analysis are pursued. These have been described as ‘pop’; problem-oriented; critical; and epistemological (Slaughter, 1996). They have also been labelled as: litany; social causes; structure and discourse; and metaphor and myth (Inayatullah, op cit). The four major ‘strata of depth’ have been characterised as: external artefacts or ‘constructs of consciousness’; internal processes or ‘capacities of consciousness’; and external ‘conditions of existence’ or ‘life conditions’ (Voros, 2005). At The Futures Academy we tend to use a simplified three-layered approach: ‘empirical’; ‘interpretive’; and ‘exploratory’. All, however, are based ultimately on the Delphi injunction “Know thyself” and the desire to conduct visioning exercises of whatever form with new vistas of insight.
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Exhibit 5: Scenario Logics (Taken from Twice The Size project 2008)
Scenarios
One of the most popular and persuasive techniques used in futures studies and foresighting is scenario analysis. Scenarios have long been used by government planners, corporate strategists and military analysts as powerful tools to aid in decision making in the face of uncertainty. They are instruments for ordering people’s perceptions about alternative future environments in which today’s decisions might play out. In practice, scenarios resemble a set of stories built around carefully constructed plots. Such stories can express multiple perspectives on complex events, with the scenarios themselves giving meaning to these events. Despite their story-like qualities, scenarios follow systematic and recognisable phases. The process is highly interactive, intense and imaginative. It begins by isolating the decision to be made, rigorously challenging the mental maps that shape people’s perceptions, and hunting and gathering information, often from unorthodox sources. The next steps are more analytical: identifying the driving forces, the predetermined elements and the critical uncertainties. These factors are then prioritised according to importance and
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Exhibit 6: Scenario Example: Global Economic Outcomes (Outsights 2010)
uncertainty. Subsequently, three or four thoughtfully composed scenario ‘plots’, each representing a plausible alternative future, against which policy options can be tested and implications identified, are developed. Then, the deeper structures and systems behind the scenario stories, and their underlying logics, are elaborated to explain them and reveal their crucial differences. Finally, the key events, or turning points, that would channel the future towards one scenario rather than another are identified. At The Futures Academy we have conducted several dozen scenario exercises over the past few years, mostly directed at issues concerning the future of the built environment.
Exhibit 7: Scenario Typology
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CHALLENGES FOR THE BUILT ENVIRONMENT PROFESSIONS
Einstein’s oft quoted adage that problems cannot be solved at the same level of awareness that created them has been a life-long favourite of mine, but he also said:
“Concern for man himself and his fate must always form the chief interest of all technical endeavours ….. in order that the creations of our mind shall be a blessing and not a curse to mankind.”
[Address at California Institute of Technology, 1931].
The ultimate challenge is, of course, the sustainability of mankind, and the paramount pre-condition for this is a collective change of mindset with different values, views and social institutions. If we are to replace the prevailing sense of pessimism that besets us with a more positive and progressive way of thinking towards rational optimism then we must think anew.
What follows are three sets of challenges facing the professions of the built environment which have emerged from several recent Foresight studies I have undertaken around the world. The meta, macro, and micro levels of reasoning reflect the particular ‘causal layered analysis’ methodology I developed, with others, at The Futures Academy (Ratcliffe et al 2009; Ratcliffe & Saurin, 2008) and now underpins most of my work.
Meta-Challenges (Exploratory)
1. Values. Determining the right set of values at every level – individual, group, community, corporation, city, country, region and global – is at the root of everything. Values and beliefs are the fundamental shapers of society. But reconciling what appears to be conflicting value systems is going to be one of the greatest challenges facing us all over the decades to come. One problem in terms of value systems is the mindset that defines “success” – individually, corporately and collectively – in terms of financial achievement. The challenge of our times is to change the mindset to redefine our lifestyles, ambitions and attainments in a new “smart, green, cool” way.
2. Visions. These are the mental models we must construct, at all scales of society, to give meaning to how we understand the world, what is our preferred future for it and how we are to take action to achieve it. Building a shared vision of what we want to create is the essential starting point for any organisation, for when there is a genuine vision (not the all too familiar ‘vision statement’) people excel and learn. Not because they are told to, but because they want to. The practice of shared vision involves the skills for unearthing ‘pictures of the future’ that foster real commitment and authentic engagement rather than compliance. I would echo, however, the thoughts of Peter Senge (2006) in believing that the discipline of building shared vision lacks a critical underpinning if practiced without systems thinking. Vision paints the picture of what we want to create. Systems thinking reveals how we have created and what we currently have (ibid).
3. Vectors. Borrowing from physics, a vector is a quantity that has two aspects – size and direction. Drawing on biology, a vector is an organism that carries and dispenses reproductive structures (often diseases). For my purposes here, vectors are the main societal vehicles for transmitting infectious change from one part of the global community to another, and the five most contagious are simply listed as follows.
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Climate Change. We are all said to be climate change deniers now (Hamilton, op cit).
Globalisation. Manifested in the five flows of goods, capital, people, information and services.
Science and Technology. Where there will be new fresh challenges, threats and opportunities around the emergence and convergence of new discoveries and technologies.
Declining Resources. The underlying cause of collapse or conflict in all societies is usually resource shortage – communities run out of essential supplies of energy, food, water or other essential materials.
Governance and Power. Embracing such futures issues as: the flow of power away from national governments upwards to multilateral bodies or downwards to cities and regions; the extent to which companies will provide more services traditionally associated with the public sector; the influence of private equity and sovereign wealth funds; a new philanthropy from social enterprises and the very wealthy; and the impact of ICT on how citizens engage and exert power (Outsights, 2009).
Macro-Challenges (Interpretive)
1. Foster Creativity. Everyone has creative capacities, but all too often they are stifled or suppressed. As the precursor to innovation, itself the salvation for sustainability, there is a need to develop and exploit the creative capacities across and within built environment organisations. At a recent Foresight workshop at Henley Business School ‘Creative Thinking and Innovation’ was ranked as a key issue with the following imperatives (Ratcliffe & Baum, 2010) :
Means and mechanisms to nurture creativity and foster innovation in the real estate and construction professions need to be developed.
Involve the client and the customer to determine what can be done differently.
Give people permission to experiment – and allow them to fail!”
2. Manage the Energy Deficit. The replacement of fossil fuels with clean energy during the first half of this century is a tall order, particularly since the world’s energy requirement will double by 2050 to 2 trillion watts. Solving the energy problem is the secret to solving all other problems relating to water, food, health and prosperity. After ‘sustainability’ itself, this issue was ranked second by industry leaders at the HBS workshop, with the following injunction (ibid):
All professionals contributing to planning, designing, investing, constructing, developing, managing and occupying the built environment should be more fully aware of the impending energy crisis.
There is an urgent need to invest more into research for alternative solutions to combat the energy deficit and energy depletion.
Property professionals need to be more proficient in proffering consultancy and advice around sustainable urban development and management matters as they relate to energy generation, supply and consumption.
3. Come to Terms With Urbanisation. Cities are beckoning more of humanity. The ‘push’ is rural poverty; the ‘pull’ is from the innovative economic hubs. Cities are the
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real powerhouse of the future, taking more and more authority and autonomy away from nation states. By 2050 three-quarter of the world’s population will live in cities, and at least ten cities in Asia will have over 20 million people. The success of these conurbations is contingent on dealing with such challenges as energy supply, transport, waste management, food supply, affordable housing and social cohesion. Two major ‘faultlines’ can be identified for city stability, ‘faith versus secular worldviews’ and ‘environmental ethics versus economic rationality’ (Landry, 2004). The former colourfully characterised as “Jihad v McWorld” (Barber, 1996) as the twin forces of globalisation and tribalism reshape the world. The latter, representing the rise of environmental awareness and the growing clash with conventional economic rationality. Diversity, however, is at the heart of successful cities, and the big future challenge is how we become aware of the paradoxes of difference and reconcile the negative conflicts.
4. Take Responsibility. As we enter the ‘age of sustainability’ so we also enter the ‘age of responsibility’ – individually, corporately and collectively. Responsible behaviour, especially within the corporate sectors of the built environment, is the active or operational face of establishing values. Over the past decade or so we have witnessed a dramatic proliferation of business ethics and corporate social responsibility policies, plans, projects and prescriptions. Rapid change has taken place, superficial at first, but increasingly sincere and significant. There is a view, however, that whilst companies should be accountable, it is really individuals that should be held responsible for specific actions, because only individuals have the capacity for moral agency, which requires a conscious mind. Human moral agency is grounded, the argument runs (Brown, 2005), in the desires, beliefs and motives of a conscious mind. Organisations do not possess these. Perhaps this is the very nub of professionalism – taking responsibility!
5. Understand Reflexivity. Popularised by George Soros (2009), but having its roots in the work of Karl Popper (1957) and others, ‘reflexivity’ is the concept that a persons thoughts and ideas tend inherently to be biased. Put another way, the basic values, beliefs and interests of a person will be represented in their behaviour, actions and decisions. More specifically, perhaps, reflexivity involves reflecting on the way in which research, policy formulations and decision-making is carried out and how the philosophies, processes and personalities shape the outcomes. An important function of reflexive analysis, therefore, is to expose the underlying assumptions on which arguments are constructed and stances are taken. The importance for built environment professionals is that an understanding of the nature of reflexivity helps deals with the relationship between thinking and reality, between cause and effect, and between beliefs and observations in urban environments and property markets. Thus, the built environment professional, for example, is not a neutral observer but an active influencer of events. Even in the field of urban affairs and land economics, equilibrium theory is dead – and reflexivity the new paradigm.
6. Defuse the Demographic Time Bomb. Not only is the population of the world growing, moving and ageing, but, for the first time in human history, economic growth has become the prerogative and purpose of most people on the planet. Today’s 6.8 billion will become about 9.2 billion by 2050, most of the growth occurring in poorer countries. Rapid population growth places enormous pressures on the resources and infrastructure of these poor parts of the world. Globally, urban populations are increasing by 180,000 people every day, and, in order to survive, each one of them will need energy, food, water, housing, sewerage, education,
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healthcare, transport, employment and other goods and services. We will have to find innovative and equitable solutions to balancing the ‘needs’ and ‘wants’ of these populations to preserve not just sustainability but peace. Add to this the strains imposed by the ‘greying’ of OECD countries, consequent rises in dependency ratios and gender imbalance in China, let alone the pending waves of global migration, and it is not difficult to see why population stresses could contribute to societal breakdown. Radical measures to manage global population, however, are the policy agenda that dare not speak its name.
7. Promote ‘ Structured Market’ Capitalism. The current crop of capitalists, who gave us the recent world recession, inventing on the way some £40 trillion plus in derivatives, have been exposed as not only grossly incompetent in the extreme but also totally lacking in the right set of values for the 21 st century. Now is the time, it is contended (Pelton, 2009), to recalibrate the necessary purpose of innovation and creativity and adjust the present form of free-market capitalism, as defined by government abnegation and bankers profiteering, to a more regulated and ‘structured’ model of responsible capitalism. The call is for some fresh thinking about markets and market efficiencies. Modern economists like Paul Krugman and Joseph Stiglitz seems to display a better understanding of this century’s market mechanisms and economic systems than say Adam Smith, Thomas Hobbes and John Locke, who, as undoubtedly clever as they were, have now been dead for centuries. As an unreconstructed Keynsian, however, I cannot help but quote the master:
“The important thing for Government is not to do things which individuals are doing already, and to do them a little better or a little worse, but to do those things which at present are not done at all”.
[The End of Laissez-Fair, 1925].
8. Comprehend Connectivity and Networks. Connectedness will dominate the lives of everyone this century. The connections and networks spreading around us at the moment are only a foretaste of what is to come. Such ‘connexity’, to coin what is actually an old English word, is already transforming our social and working lives. There has been a veritable revolution in people-to-people communication. Next could be people-to-objects. Then objects, or machines, to objects. The arrival of Web 3.0 – the ‘semantic web’ which understands content and communicates intelligently – may even take out the human element altogether from much of our lives (Outsights, op cit). The power of social networking, the creativity of virtual worlds, the potential of embedded intelligence and the sovereignty of surveillance are all issues we are just beginning to understand. Their impact upon the built environment in which we live, work and take our leisure is likely to be transformative. The world is changing faster than most of us realise, which reminds me of the reputed ancient Chinese proverb, and curse:
“May you live in interesting times. May you come to the attention of those in authority. May you find what you are looking for.”
9. Redefine the Enemy. Increasingly, we are at war not with enemy states or foreign armies, but with relatively small groups of people or even specific individuals, fugitive terrorists, drug traffickers, warlords, dangerous dictators, pirates, rogue scientists, villainous zealots and the like. Future conflict will frequently occur in ungoverned territory – cyberspace, the high seas, space, desert lands and city
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slums. War and terrorism will likely be fought using chemical, biological, radiological and nuclear weapons as technology becomes more accessible. The greatest tool for terrorism will probably be the internet, and robots will rule the battlefield. So the needs of safety, security and defence are going to be different. Yet powerful institutional barriers to fundamental change remain. The challenge is to alter radically how we protect ourselves, and how we organise to defend and fight.
10.Recognise the Great Rebalancing. The coming decade will be the first in 200 years when emerging-market countries contribute more growth to the world’s economy than the developed ones. This could be the most profound of tipping points, marking a fundamental rebalancing of economic power that will likely leave traditional Western economics with a lower share of global GDP in 2050 than they had in 1700. Asian economies, in particular, are already evolving from being peripheral players into leading actors, as they shed their role as suppliers of low-cost goods, large-scale providers of capital, talent and innovation, - the worlds science and technology park. In terms of built environments, China and India are both swiftly urbanising, but whereas China has embraced and shaped the process, India is still waking-up to its urban realities and opportunities. Never before in history have two of the largest nations urbanised at the same time, and at such a pace. This process will drive key shifts, in both countries, which will have significant consequences for the world economy and offer exciting and challenging new opportunities for investors and developers.
Micro-Challenges (Empirical)
From several Foresight exercises conducted over the past year or so I have compiled the following catalogue of the top 20 challenges that face the real estate and construction industries most directly over the next couple of decades.
1. Thinking Strategically and Systematically. The art of the long and wide view needs to be cultivated more assiduously, with a better understanding of the driving forces of change and a clearer vision of the chosen path towards a preferred future. The HBS workshop (Ratcliffe & Baum, op cit), put it thus:
Real estate practitioners should develop a greater capacity for strategic thinking at a bigger scale, broadening their horizons and considering more carefully the ‘what ifs’.
Designated time should be set aside within property and construction organisations for future thinking and foresighting.
Visioning and scenario planning should be conducted to establish preferred future positions, embed flexibility and stimulate innovation in a fast moving and changing world.
2. Mainstreaming Green Development. New planning policies, design strategies, funding sources, energy-efficient materials and innovative building technologies are helping to take green development mainstream. The World Green Building Council model, for example, is proving infectious, as new councils are formed across the world. The biggest challenge, however, is not so much with new development, but with the green regeneration and retrofitting of other parts of cities.
3. Promoting Public Private Partnerships. As the private sector looks for new markets, especially in the infrastructure, health, affordable housing and education fields, and the public sector faces diminishing budgets, there will be an inevitable
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growth in the number of public-private partnerships in construction and real estate development. Attempts, to date, have been but a testing and learning phase, with variable success, and arguably little true partnership. Contractual complexities, rigid demarcation of roles in inflexible processes have bedevilled many projects. What is needed is a new set of models designed for a range of investment and development circumstances, and managed by a cadre of professionals specially trained and properly experienced in public private partnership. It is a different mindset and skillset from either public or private sectors.
4. Appreciating Market Divergence. A two-tier market is already beginning to emerge between truly ‘sustainable’ buildings and ‘other’; with the accent also firmly placed on flexibility and adaptability. Space over place.
5. Recognising the Role for Infrastructure. This will become a major sector in the global real estate market as well as continuing as a prime source of work for the construction industry. Again, the HBS Workshop concluded (ibid):
A lack of sufficient investment and planning for infrastructure that is ‘fit for purpose’ could seriously endanger the real estate development industry.
Real estate leaders need to play an enhanced role in shaping infrastructure solutions, aligning them with property development imperatives.
An infrastructure tax might beneficially be introduced.
In the construction field, moreover, major customers are already changing the way in which they procure services from the industry, entering larger, longer-term contracts with fewer ‘Tier 1’ contractors.
6. Switching to Service and Function. Real estate will become increasingly a service industry with changing patterns of tenure (more transient), facilities (fuller provision) and management (greater attention). Real estate will return to being assessed qualitatively for its physical and functional properties rather than simply quantitatively as a financial asset class.
7. Changing Locations. Locational preferences will alter as personal mobility decreases and the costs of distribution soar resulting from rising fuel prices; while at the same time technological advances obviate the need for so much travel.
8. Reviewing Risk Management. The abject failure of risk management throughout the opening decade of this century has highlighted the importance of the discipline. The HBS exercise found that (ibid):
Risk management needs to be redefined, re-evaluated and redressed. Long-term and ‘big picture’ risks should form a clearer and more cogent part
of how possible, probable and preferred future business opportunities are perceived.
How, in particular, will a shift from West to East business practice impact upon the operation of the real estate industry?
9. Engaging Communities. There is a growing expectation on the part of communities, of all kinds, not just to be consulted on development proposals but increasingly to collaborate in their location, design and use.
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10.Reconciling Regulation. In the wake of the collapse of the global financial system, and with growing pressure to secure sustainable urban development, there will assuredly be greater regulation and more regulators in the processes, procedures and practices of real estate investment, development, management and valuation.
11. Increasingly Interdisciplinary. The built environment is an interconnected set of related and interdependent processes – planning, design, engineering, construction, mobility, communication, funding, marketing, management and the like. A complex adaptive system if ever there was one. A system, moreover, with social, demographic, economic, environmental, technological, legislative and even cultural dimensions. There simply has to be a greater awareness of why, what, how, when and where the different professional disciplines contribute to the stewardship of the built environment. The partiality and detachment of academe, taken together with the parochialism and protectionist attitudes of professional bodies, has a lot to answer for. In my experience, there is not a single university institution in the world that properly integrates the different disciplines of the built environment, and no professional institution that takes a real lead in orchestrating effective collaboration.
12.Comprehending Clients and Customers. Market awareness and client focus formed a central theme of the HBS (ibid) study, concluding that:
Supply and demand is tomorrow’s location, location, location. Re-evaluate every offering, and move forward on the demand curve. Partner more productively with other stakeholders – clients, customers,
occupiers, funders, regulators and the like.”
And again, the need to increase the dialogue between the various stakeholders in the land development process was noted, from design to implementation, to management and monitoring.
13.Discovering Demographics. The old saw of “demography is destiny” is hard to deny. The HBS workshop (ibid) proposed that:
There is a need to develop a better understanding of how population issues will impact upon the real estate industry with all the consequent threats and opportunities.
More market research should be conducted on demographic issues and trends and their land use planning and development implications.
The changing demands of an ageing population, in particular, should be addressed from a property market supply perspective.
14.Exploiting Convergent Technologies. That combinations of nanotechnology, biotechnology and information technology are transforming human society has already been touched on. Gaining an understanding of how this might affect the built environment in general, and the real estate and construction industries in particular is in its infancy. Inevitably we are heading for ‘smarter’ ways of working, shopping, recreating and housing, as well as ‘smarter’ ways of planning, designing, constructing, managing and evaluating property assets and infrastructure. Research on this is presently sparse and fragmented, leaving a major challenge for industry and academe alike – and alongside.
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15. Imagining Intergenerationally. Both the young and the old are leading very different lives than the generations that preceded them. They think of cities, homes, shops, entertainment, healthcare, education and communication differently. Planners, designers and developers will have to gain and maintain a better grasp of what different generations want at different stages in their life. More than that, a perspective based on the sharing of information, thoughts, feelings, experiences and skills across and between generations can enrich us all, and is, at heart, the central core of sustainability.
16.Prepare for Surprises. Wildcards or jokers will be played from time to time. Some of these might be totally unexpected – some could be unlikely yet predictable. Leaders in organisations at all levels, and in all situations and occupations, need to collect the information, study the signs and confront the issues surrounding the degree of probability and scale of impact of meta, macro and micro uncertainties that might impinge upon their areas of responsibility. The challenge is to avoid tragedy by both anticipating and preparing to mitigate damage done by ‘predictable surprises.’
17.Taking Time. Many, if not most, of the major ‘momentum trends’ for the 21st
century are long-term in their formation, impact and necessary control. We need to ‘stand in the future’ and create a strategic view that is unrestricted by the exigencies of the present – imagine ahead and plan backwards. Sometimes, however, it is interesting to look back and review what was forecast then for a future which is now. Thirteen years ago I produced a paper supporting the Keynote Address to The Cutting Edge Conference in Dublin entitled “Real Estate 20:20”. Many of the prognostications are unfolding. Some have happened. And a few are clearly fallacious. What emerges from this historical perspective is that ‘it takes time’ – but change is happening, often unnoticed. Whilst we cannot predict the future in detail or with surety, we can study the alternative directions it might take and ask ourselves how we might influence them over time. The challenge is to learn how to handle long-term, intergenerational lead-times.
18.Creating A Futures-Oriented Organisation. Although all organisations have to be adroit, flexible and adaptable in the present, the era of short-termism is drawing to a close. As a strategic foresight consultant, or futurist, I was delighted to see the following five basic precepts emerge from our recent studies:
(i) Appreciate that the key to leadership is the effective communication of a story, a story whose central narrative clarifies for all concerned their individual and collective identity.
(ii) Recognise that the current business logic is never forever – there is a continuing need deliberately to question the basic assumptions of the organisation, its purpose and its products.
(iii) Involve a wide body of people, from within and without the organisation in strategic thinking and planning - including the odd ‘visionary’.
(iv) Conduct ongoing environmental scanning to include industries and agencies from fields and sectors beyond those which the organisation operates.
(v) Accept that all information - rich, networked societies and their markets run on trust, a crucially valuable factor that economists tend to ignore in their models.
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19.Building Trust and Reputation. Neither property nor construction have ever been industries or professions with a good image. This needs to be addressed, though it is a long-term aspiration. Companies, professional bodies and educational institutions all have a part to play. Above all, building trust is probably the most important part of education at all levels and the prime responsibility of leadership and top management in any organization – indeed, in society as a whole. So it all starts with leadership and education.
20.Fostering Leadership. Reflecting on the meta-challenges described above – vision, values and ethics should form central themes for those responsible for policy, practice and performance in the built environment in general, and executive education addressing leadership issues should be developed with an orientation on the real estate and construction industries in particular. Henley Business School, which has this as a high and immediate priority, is already offering customized leadership programmes with the following general objectives:
Develop a strong cadre of future leaders capable of dealing with business critical issues.
Build organizational agility to respond to new business challenges. Build enhanced managerial and leadership capability to provide sustainable
competitive advantage. Create a common sense of purpose, urgency and drive for success. Provide a common ground and a shared understanding of management
knowledge, business acumen and best practice.
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SUSTAINABILITY, RESPONSIBILITY AND LEADERSHIP
When I reflect on what lies ahead for our industries, agencies and organizations in the built environment, and the professions that serve them, the three central stands of sustainability, responsibility and leadership stand-out as supplying the strong warp and weft from which the future fabric of our wondrous urban world will be woven. Let me say a little about each.
Built Environment Futures
Sustainability Responsibility Leadership
Systems Synchronicity Reciprocity Consilience Awareness Values
Sustainability
Sustainability is not just part of a market cycle, nor simply a significant event, it is a structural shift in how we think about and do things. Arguably, as part of this shift, we are moving from an ‘old economy’ to a ‘new economy’, and thus from old markets, means of production and methods of measurement to new ones. The old economy, for example, has been one based on cheap energy, high levels of mobility and the concept of closed systems. The new economy will most likely be based on contentious, costly and capricious energy, with lower levels of physical mobility, greater degrees of connectivity and much higher standards of accountability. Two elements, deserving greater understanding on our part in the built environment strike me – systems and synchronicity.
1. Systems. Everything, we know now, affects everything else, and small changes somewhere can have large impacts elsewhere. Those of us who qualified in the Construction and Real Estate businesses over forty years ago, however, still have difficulty in seeing the ‘wholeness’ and understanding the ‘interconnections’ of the world. We were not trained to appreciate and capture the nature of systems and the dynamic of relationships, let alone express such thinking in terms of corporate policy, property markets and occupational production. Though familiar with market cycles, their movements and corrections, we are less well-versed in comprehending the character and consequences of cardinal change. Having learned that ‘systems thinking’ is the fundamental prospective of future studies, I now also believe that it is a basic paradigm for policy formulation in all fields and a lens through which we should view our decision-making processes and reflect upon their repercussions. Systems thinking should, therefore, be a prerequisite in all built environment curricula.
2. Synchronicity. Coined in the 1920’s by Carl Jung (1977), the concept is defined as the experience of two or more events that are apparently causally unrelated occurring together in a meaningful manner. Synchronistic events reveal an underlying pattern, a conceptual framework that encompasses, but is larger than, any of the systems that display the synchronicity. Having experienced such seemingly accidental happenings, both at work and in my private life, I have always been beguiled by how, when and why they occur. My curiosity has grown,
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moreover, through the years as to the way in which these incidents occur ‘collectively’ within a group or team of people. Recently reading Joseph Jaworski’s thoughtful book Synchronicity (1998) has helped satisfy this interest, as well as seeing this notion as a subtle territory of leadership, creating the condition for “predictable miracles” (ibid).
Peter Senge, in the Preface to Synchronicity, states that the occurrence of such coincidences, though the actual causes are hard to understand, begin to happen when there has been a significant shift of mindset, grounded in a different form of ‘commitment’ by, and ‘attractiveness’ towards people of a similar disposition. Something special starts to operate in the systems around us, and we sense a feeling of ‘synchronicity’. Aptly, Jaworski opens his text with the following words from Goethe:
“Whatever you can do, or dream you can, begin it.Boldness had genius, power and magic in it.”
Responsibility
It has become clearer and clearer to me over the past decade or so that in tackling the conceptual and operative challenges that arise in securing a sustainable built environment, policy-makers and decision-takers will need to abandon obsolete mentalities, and find a new, more integrated, ethical and foresightful approach. One based on responsibility.
Over the past two decades, globalization, deregulation and privatisation, coupled with advances in technology and a fundamental shift in the role between state and market have transformed the basis on which global corporations are expected to operate. As companies gain more power and influence, while the authority of governments is diminished, the expectations that corporations will act in the public interest have amplified (O’Brien, 2010). Recent economic events demonstrate that the present economic system is extremely vulnerable, and that the coordinating mechanisms of both government and business are ultimately inadequate in responding to what Korten (2001) has described as:
“the threefold human crisis of deepening poverty, social disintegration and environmental destruction.”
The emergence of concepts such as corporate social responsibility, corporate responsible behaviour, corporate citizenship and corporate accountability, indicates the blurring of boundaries between formerly nation-bound governmental control and increasingly global efforts to meet the ambiguous challenge of sustainable development. Various representative societal groups have thus called for new values and new visions to address the changing roles of responsibility. The professions and academic institutions of the built environment have a much bigger part to play in this. Two concepts, however, need to be better understood – reciprocity and consilience.
1. Reciprocity. Given today’s turbulent economic environment, arguably there is an acute need for companies to address the existing dichotomy between profit and values and rethink the fundamental role of business in society. The current form of free market capitalism generally focuses on the needs of the individual, with little regard for the common interest. In this context, what some scholars are calling for is the development of a ‘reciprocal’ economic systems with a focus on both individual and the collective. Reciprocity, in this context, has been described as:
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“the social mechanism that makes associated life possible, when reciprocity finds economic expression for the provision of goods and services to people and communities it is the social economy that results” (Restakis, 2005).
This new type of capitalism assumes that the dual pursuit of self-interest and common goals can be mutually enhancing, the contention being that if the traditional business model is not re-evaluated to encompass a broader purpose, then it can affect the bottom-line over the short- and long-term, not least in terms of heightened financial risk, reduced credibility in the marketplace and the threat of litigation. Failing to see the interdependence between priorities and purpose has in the past, and is likely to continue in the future, to make companies more vulnerable to the vagaries of the global marketplace and, as a result, unable to bring about positive and productive change. Without a clear business purpose beyond maximizing profits decision-makers are more prone to take the type of decisions that can bring down an entire economy. One needs only look to the recent banking crisis to get a clear picture of such a scenario. The question that arises most forcefully now is not so much about the end of capitalism, as about the nature of capitalism and the need for change. This invoking of old and new capitalism played an energizing part in the discussions that took place in the symposium on New World, New Capitalism, led by Nicolas Sarkozy, Tony Blair and Angela Merkel in January in Paris 2009. Amartya Sen, the 1998 Nobel Prize winner in economics, argues that the difficulties of today do not call for some ‘new capitalism’, but they do demand an open-minded understanding of the older ideas about the reach and limits of the market economy (2009).
What is required, perhaps, is the need to develop what Guptara (2009) calls a movement for ‘world capitalism’ based on:
a) the best of the human-capitalist tradition of Europe,b) the risk-friendly capitalism of the USA and the UK, andc) social justice and environmental and emotional care worldwide.
To echo Stuart Hart’s (2007) proclamation – capitalism is at the crossroads. It needs to ignite new growth by creating sustainable products that solve urgent societal problems, to which I would most fervently add – in a responsible manner.
2. Consilience. The emergence of a reciprocal economy is linked to what Wilson (1999) calls ‘consilience’, or the linking together of two otherwise opposing concepts, to form a mutually enhancing interdependent relationship. To put this in the context of sustainability, it relates to the synthesis of the individual and the collective, where organizations embrace whole systems thinking to participate in both economic and socio-political affairs. Society is currently embracing an economic system that is failing to balance economic, social and environmental interests. In this regard, any progress made by companies trying to ‘do the right thing’, is negligible under the framework of a capitalist system that compels businesses to ‘do the wrong thing’. However, if one accepts Wilson’s hypothesis, this system, albeit social, economic, or environmental, will eventually collapse, as signalled worldwide with the recent financial crisis. Thus, it is the system that needs to be changed. In accordance with the basic tenets of quantum physics, whole business sustainability needs to be perceived as an ongoing process where
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everything is interconnected; where economic, social, political and ecological systems function as part of an integrated relationship (Folke, et al, 2005).
The world envisioned, perhaps in 2030 and beyond, may well need to be based on radically different perceptions of the world than are common today; perceptions that are more in harmony with the natural world. By recognizing that nature is not something to be conquered, but rather is viewed as fundamental to corporate longevity, it will eventually enable decision-makers to create the conditions conducive to sustainability. To do so, it is suggested that a systemic worldview of complexity and uncertainty should be embraced by business. For companies to tackle the challenges of the 21st century, they will first have to abandon redundant mentalities and embrace a new mindset to create a more holistic, integrated and sustainable future.
At a more practical level, ‘corporate social responsibility’, (CSR) policy and practice needs to cover all areas of operations and have developed clear objectives, rigorous performance standards and effective reward mechanisms. For the commercial property industry, therefore, sustainability and responsibility need to be addressed at all stages of the land development process : evaluation, acquisition, design, approval, construction, financing, occupation management and disposal.
For those like me, however, who struggle to comprehend the connectivity of systems or the unifying concept of consilience, and feel confused or helpless in the face of an unpredictable future, may I commend The Hidden Connections by Fritjaf Capra (2002) in which he describes the unified systems that integrate the biological, cognitive and social dimensions of life, and shows how understanding this will be vital to humanity’s survival. Our great challenge among the professions of the built environment is to change the value system underlying the design of communities before it’s too late. This requires a new leadership.
Leadership
Leadership has become a global obsession. We live, as has so often been said, in ‘extraordinary times’. Times of danger and opportunity. Individuals, organizations, communities and countries must continuously adapt to new realities just to survive. Constantly there is the call for ‘leadership’ to tackle this challenge. Definitions and descriptions of leadership and leaders abound. My own favoured portrait of a leader is of someone who gets others to see and understand his or her vision with their own eyes, echoing the age old adage of Lao Tzu:
“The wicked leader is he whom the people revile.The good leader is he whom the people revere.The great leader is he of whom the people say‘we did it ourselves’.”
I am clear about one thing, however, that it is not about personality. Leaders come in all forms, with differing styles, attitudes, attributes, values, strengths and weaknesses. Leadership is not mystical or mysterious, and has little to do with charisma or other exotic temperament traits. Leadership is best defined, for me, by its relationship with, and difference to ‘management’. Leadership and management are two distinctive and complementary systems of management. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile world.
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One is not necessarily better than the other or a replacement for it. Though I would contend that many organizations today seem to be over-managed an under-led.
The essential difference between management and leadership is that management is about coping with ‘complexity’, whilst leadership, by contrast, is about coping with ‘change’. As John Kolter explains in his formative article “What Leaders Really Do” (1990):
“They don’t make plans: they don’t solve problems; they don’t even organize people. What leaders really do is prepare organizations for change andhelp them cope as they struggle through it.”
Several themes, however, have been identified which are common to the nature and needs of the emerging leadership task (HBS, 2010):
The collaborative nature of the new leadership. An emphasis on sincere, genuine, transparent values-based leadership. The need for robust governance.
For my own part, and for the purposes of this paper, I single-out two qualities deserving of special mention in the context of leadership – ‘awareness’ and ‘values’.
1. Awareness. “Know yourself, be yourself and show yourself” has been one of my own personal mantras for leadership. Awareness, to my mind the most important of all attributes, is more generally known in the management literature as ‘emotional intelligence’. Basically, how self-reflective is the individual? And, by far the most important book in my life bears the title Awareness (de Mello, 1990).
In general, it is held, emotionally intelligent leaders tend to make better team players, and are more effective at motivating themselves and others. Not always true, of course, for we all probably know some highly successful leaders of organizations, or parts of organizations, who are not that self-reflective and lead essentially by doing. Nevertheless, the most celebrated leaders are able to both act and reflect (Kets de Vries, 2004).
In moments of personal reflection, however, I think we are inclined to romanticize the notion and nature of leadership, when perhaps we should focus more upon collaboration and, most of all, personal responsibility.
Nonetheless, in the modern knowledge economy, and the progressive academic institution for that matter, success depends upon smart ideas dreamed up by smart people. A handful of star performers (the ‘rainmakers’) can create disproportionate amounts of value for their organizations. These highly talented, extraordinary thinkers can be brilliant, but also very difficult, and indeed sometimes dangerous. The organisation’s competitiveness, however, invariably depends upon how well they are led. Traditional leadership strategies are rarely effective, but some guidelines for leading these ‘clevers’ have been laid down (Coffee & Jones, 2009):
Provide ‘organised space’ for their creativity. Sense their needs and keep them motivated. Shelter them from administrative and political distractions.
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Connect them with clever peers. Convince them your organization can help them succeed.
The aware leader of the future, therefore, must be part teacher, part nurturer, part protector, part visionary and part sage. And, most importantly, be ‘authentic’ (George, 2003; Coffee & Jones, 2006).
2. Values. Future leaders will be known for the values they create, cultivate and embody. The aim should be for integrity and trust to run deeply throughout the fabric of an organisation’s culture. And accountability, transparency and engagement are integral aspects of integrity and trust. Though there are many management gurus who talk and write about such concepts, I still like to refer back to great ‘leaders’ of mankind – one ancient, one modern – for guidance. Confucius stated simply that to become a leader you must first become a human being. And Ghandi taught us that there are seven things that will destroy us:
Wealth without work. Pleasure without conscience. Knowledge without character. Commerce without morality. Science without humanity. Worship without sacrifice. Politics without principle.
Fascinating to note that each one of these admirable ends can be falsely attained. But, as one of the great thinkers about leadership, Robert Greenleaf (1977) declaimed:
“If we reach an admirable end through the wrong means, the ends ultimately turn to dust in our hands.”
One of the problems in the education of our professions, I would suggest, is that we do not teach ‘values’ as part of our academic programmes. There is occasionally some mention of ‘ethics’, usually in a theoretical context, and certainly ‘standards’, frequently from a regulatory standpoint, but we shy away in our universities, and our schools, from discussing values. Harking back to earlier evocations, ‘sustainability’ and ‘responsibility’ would seem to play a paramount part in forging those future values.
A concluding comment on leadership recites part of my own credo in which I would aspire to:
Create a democracy of ideas. Amplify the organizations imagination. Dynamically reallocate resources. Aggregate collective wisdom. Minimise the drag of old mental models. Give everyone the chance to take part.
Remembering the while no one person knows best in everything, and that it is no longer possible to figure it all out from the top.
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PROPOSITUM
Returning to the initial conundrum – prevailing pessimism or rational optimism? – I have found, in the course of preparing this paper, myself switching my own outlook from a condition of rational pessimism towards a mindset of necessary prospective optimism. Realistically, things look bleak. Pragmatically, we have to have hope and try to transform the current forbidding state of affairs into a more likely sustainable future through responsibility and leadership. Mankind is nothing if not adaptable.
Let me end this essay, therefore, with three sets of proposals for the future of the built environment – one prosaic, practical and immediately capable of implementation. The second, about shared goals. And the third, probably pompous, though possibly profound, and portraying a somewhat sanguine view of humankind’s capacity to change.
First, I would propose that in the education of the professions of the built environment we:
1. Introduce new mandatory core disciplinary subjects such as systems thinking, sustainability, values and foresight.
2. Devise a range of integrated postgraduate programmes across and between the processes of sustainable urban development.
3. Favour the structured and professional doctorate studies route towards research degrees.
4. Establish more widely MBA and other forms of executive education within prestige business and built environment academic institutions.
5. Foster truly collaborative research between institutions, disciplines, sectors and cultures.
Second, both industry and academe should aim to foster the following shared goals:
Developing effective and resilient strategy. Comprehending and managing risk, uncertainty and change. Creating value and worth through sustainability. Optimising returns from built and human assets. Achieving more with less responsibility.
And third, I suggest, somewhat sententiously, that we aim collectively towards a better comprehension and fresh mindset of what David Bohm (1980) calls the ‘Implicate Order’. The implicate order is a level of reality beyond our everyday thoughts - reality afforded by a given scientific theory (the Explicit Order). In the Implicate Order the totality of existence is enfolded within each ‘fragment’ of space and time – whether it be a single object, thought or event. Thus, everything in the universe affects everything else because they are all part of the same unbroken whole (ibid).
As Tim Smit, the inspirational founder of the UK’s Eden Project, declared (HBS, op cit):
“The next thirty years will be the most exciting time to be alive in the whole history of human beings on this planet, for in that period we will discover whether Homo is really Sapiens or whether we are going to join the fossil records or extinct species”.
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