CEOs worry about the shape of recovery: V, U, W, or L? The V-shaped recovery, while most desirable, is out of question according to the Fed and OECD.
Rather than passively dream about a V-shaped recovery of the whole economy, which is beyond their control, CEOs must proactively lead a Y-shaped transformation of their organization. Such a conscious and deep reinvention will enable their business to achieve sustainable success in the post Covid-19 world.
95% of companies today operate in survival mode. They are investing all their energy to “pivot”, that is they are tactically adapting their traditional business model to pursue new market opportunities in the Covid-19 world. These firms are unconsciously focused on getting back to “Doing Better”, by changing WHAT they do.
But 5% of businesses, led by visionary CEOs, are leveraging this crisis to evolve into “Being Better” by deeply examining and consciously reinventing their core selves, namely:
- HOW they see the world—their perspective
- WHY they exist—their purpose
- WHO they are—their core values and identity
A conscious Y-shaped reinvention expands an organization’s awareness and enables a bigger social and ecological impact as the graphic below explains.
Let me show how three vanguard businesses undertook this conscious Y-shaped reinvention in 2020 by audaciously redefining their core identity, purpose, and perspective.
WHO: Siemens reinvents itself as a business-to-society firm
Joe Kaeser, CEO of the industrial giant Siemens, is reinventing the business-to-business (B2B) firm as a business-to-society (B2S) company. As a B2S firm, Siemens will leverage all of its assets, expertise and partnerships to generate positive social impact in each of the 200 countries in which it operates.
Barbara Humpton, CEO of Siemens USA, told me how, during the Covid-19 crisis, the B2S culture enabled the 50,000 Siemens employees in the US to transform their initial fear and helplessness into positive energy to co-create solutions to fight Covid-19. In early April, as the lockdown was imposed across the US, Humpton exhorted her 50,000 employees: “Don’t focus too much on yourself and your own anxiety. Channel your emotions into resolving pressing local needs in your cities. Let’s examine our existing portfolio of assets and skills and use them to help others.”
The employees heeded Humpton’s call. For instance, Siemens engineers in many US cities used the Siemens 3D printer in their homes to produce hundreds of face masks that they offered to local hospitals. And Siemens teamed up with Medtronic, a world leader in medical technology, to co-develop a “digital twin” of a ventilator and made it available as open source on the Internet so that anyone in the world could use it to make their own ventilators to help local Covid-19 patients.
Humpton believes the current crisis will consolidate Siemens’ reinvention and societal commitment as a “business-to-society” company. “We will foster a true ownership culture that drives entrepreneurial spirit, bottom-up initiatives, empowerment and engagement of all employees — all in the service of society,” notes Humpton enthusiastically.
WHY: Danone embraces “triple regeneration” as its purpose
Pioneering firms like Patagonia, General Mills, and Interface are taking sustainability to a higher level by embracing the notion of regeneration. Whereas sustainable firms seek to “do less harm” to the planet by reducing their carbon footprint, regenerative businesses vie to “do more good” by consciously widening and deepening their positive impact on society and the environment. According to a ReGenFriends study, nearly 80% of US consumers want brands to go beyond sustainability and commit to regeneration (these consumers find the term sustainable too passive).
The food giant Danone is going one step even further. With its “One Planet. One Health” agenda, Danone is pioneering what I call “triple regeneration”, a holistic approach to restoring, renewing, and growing people, places, and the planet simultaneously in a synergistic way.
For example, Danone is supporting its farming suppliers’ transition to regenerative agriculture, a science-based approach based on natural methods like crop rotation that enriches the soil, increases biodiversity, boosts yield, and drastically curbs the use of chemical fertilizers, pesticides, and water. Regenerative agriculture reverses climate change by sequestering carbon in the soil. High-vitality soil also produces nutrient-rich foods, which enhances Danone’s consumers’ health. Hence, everybody wins: The struggling farmer communities get to lower their costs, boost their income, and increase the long-term quality and value of their land; the ailing planetary biosphere is revitalized, and the consumers get better nourishment.
In 2018, Danone’s North American had become the world’s largest B Corp certified company, meaning it is legally committed to balancing the fiduciary interests of shareholders with a positive impact on people, communities and the planet. Danone aims to certify its entire global organization as a B Corp by 2025.
On June 26, 2020, Danone shareholders voted unanimously to make it the first listed company in France to adopt the “Entreprise à Mission” (company with a mission) legal framework. This framework allows a for-profit company to embed specific social and environmental goals within its articles of association, allocate resources to them, and set up a new governance model to oversee their progress. Through its mission to bring health through food to as many people as possible, Danone is formally committed to co-create and share sustainable value for all stakeholders while regenerating people, places, and the planet.
As Emmanuel Faber, CEO of Danone, notes: “We celebrated our 100th anniversary last year and the sequel needs to be written. The risk is that we fall asleep. We need to reinvent a model for a living enterprise, an economy that serves people, an agriculture that renews the planet’s resources.”
HOW: Decathlon envisions a better world…to be realized tomorrow
Companies that undertake a Y-shaped reinvention use discernment to decide which aspects of their core being are worth retaining and which ones need to be discarded or reinvented.
Take Decathlon, a global sports goods retailer that employs 94,000 employees in 1700 stores across 57 countries. Decathlon has a clear sense of its identity (WHO) and is unwaveringly committed to its four core values: vitality, responsibility, generosity and authenticity. It remains loyal to its mission (WHY), which is to “make sports accessible to as many people as we can”.
But Decathlon regularly revisits its worldview, especially HOW it envisions the future of the world. Its founder Michel Leclercq believes a business needs to have a powerful vision to unite employees and steer the company in the right direction by acting as the North Star. Leclercq quotes the Hispano-Roman Stoic philosopher Seneca who said: “If one does not know to which port one is sailing, no wind is favorable.”
Rather than stick to a static vision, however, Decathlon regularly updates its vision using the collective intelligence of all its employees. In 2016, 37,000 Decathlon employees co-created its Vision 2026 which envisioned Decathlon’s future business models and identified five major causes it can contribute to worldwide.
Vision 2026, however suffered from three shortcomings that made its implementation ineffective. First, it was developed by Decathlon using its own inner perspective without much input from key external stakeholders. Second, the vision was too impersonal and abstract, making it difficult for Decathlon managers and employees—who operate in 1000 cities across 57 different countries—to figure out how they can implement the five major causes at a local level and integrate them in their day-to-day activities. Third, Vision 2026 didn’t create a sense of urgency among employees who didn’t see a strong business—or personal—case to radically change the status quo.
These insights led Decathlon in September 2019 to launch a year-long exercise to co-create a new vision called Vision 2030 that would address the deficiencies of Vision 2026. First, Vision 2030 would be co-defined with a 360-degree perspective by involving thousands of external stakeholders—customers, partners, sports users, neighbors, and shareholders. Second, the new vision would focus not on imagining Decathlon’s own future, but rather envision the future of living, sports, and humanity. Third, it would empower Decathlon teams in each city to engage local ecosystem partners to effectively implement the key priorities of the global unified vision as they see fit at a local level.
Halfway through the Vision 2030 co-creation process, Covid-19 hit. As Charlie Felgate, Vision Leader at Decathlon United, told me: “The global lockdown gave a unique opportunity for all our employees to go within and reflect and introspect. Suddenly, the key priorities of the Vision 2030—such as caring for others, improving our well-being, overcoming social inequality, and regenerating the environment—all became very real and personal and, most importantly, very urgent.”
This greater awareness and sense of urgency convinced Decathlon in May 2020 to boldly rename its newly-completed vision as Vision 2021. Indeed, Decathlon recognized the crisis offers a unique window of opportunity to make serious systemic changes in our global societies very rapidly. As Felgate pointedly notes: “The most radical transformation happens only where we are about to die.” Felgate calls it “back-against-the-wall innovation”. “We can’t wait 10 years to build a better world. The world is asking us to get it done in 1 year,” says Felgate.
Based on over 40,000 inputs and 1115 inspiring stories of the future provided by internal and external stakeholders, Vision 2021 aims to achieve five ambitious targets: promote healthy and mindful lifestyle through sports, enable clean and healthy transport, be committed to local living while globally connected, drive regenerative growth that benefits both people and the planet, and foster an open and inclusive culture to collectively solve common problems facing humanity. Felgate expects Vision 2021 to be a “living vision” that will be continually updated to reflect the changes in “what the world expects from Decathlon, rather than the other way around.”
Rather than mindlessly react to the crisis or tactically adapt their business activities, wise leaders at visionary firms like Siemens, Danone, and Decathlon are consciously and deeply reinventing their organization’s core being. By boldly redefining who they are, why they exist, and how they perceive and impact the world, these vanguard firms are positioning themselves for durable success in the post-Covid-19 world. CEOs must learn from these pioneers and lead a conscious Y-shaped transformation without delay.
Some content of this article was originally published in Forbes.com
Navi Radjou is an innovation and leadership scholar based in New York. He is the coauthor of Jugaad Innovation (2012), From Smart to Wise (2013), and Frugal Innovation (2015). He won the 2013 Thinkers50 Innovation Award.