4 Essential Building Blocks for The Great Reset
The World Economic Forum’s Great Reset Initiative seeks ideas on how the world can grasp the opportunity provided by this unique moment in history to transform economics, politics and our every day lives to inspire a new people and planet centred approach to how our societies are run.
I was interviewed by the team at the Oliver Wyman consultancy developing scenarios for Davos who asked ‘What are the important building blocks for this transformation?’
Mine were — Mindset, Metrics, Incentives and Connection. What would yours be? Tag me in LinkedIn or post in comments
Change our mindset — if we made it up once, we can make it up again
The first change will have to be to our mindset. Two powerful new books Thomas Piketty’s Capital and Ideology and Rutger Bregman’s HumanKind show how our current mindset is based on fundamentally wrong assumptions and that dramatic change is possible with a change of mindset.
Piketty challenges a basic assumption of capitalism — that inequality is just an unfortunate by-product of progress. Inequality he argues is a political choice based on a flawed ideology — the market will provide — and not the inevitable result of technology and globalisation. He demonstrates it is neither true, nor irreversible.
Rutger Bregman explodes an even more deep seated myth — that humans are intrinsically selfish, uncooperative and aggressive and without the civilising influence of governments and leaders, order would soon break down and chaos reign. His research over 200,000 years of human history shows that we are in reality hard-wired to be kind, cooperative and caring. But we run our countries, civic institutions, companies, schools, often even families based on this deeply negative and incorrect assumption about human behaviour. He demonstrates that when this assumption changes, everything changes — with real world examples from the Norwegian prison system to the real world Lord of the Flies.
What both these books show is that our view of the world was simply made up. And made up by a surprisingly small but depressingly influential number of individuals — from Machiavelli, and Adam Smith, to Milton Friedman and William Golding. But if we made it up once, we can make it up again, and there are plenty of people out there with great new ideas to work with if we started to take them seriously.
Covid has shown the truth of both of these ideas. What is important, to quote Henry Ford is to realise “whether you think you can, or you think you can’t — you’re right.”
Create new metrics — measuring what matters will change everything
GDP is measuring the wrong things. Measuring the right things will give governments, business and citizens the knowledge they need to take the brave and challenging steps required to move to a more people and planet centred way of living.
GDP fails on so many levels — it measures wealth and ignores its distribution, it fails to even register the human and financial costs of capitalism — ‘externalities’ such as social welfare, environmental degradation and the social, mental and physical health costs of innovations.
Dissatisfaction with GDP is widespread and there are many alternatives being trialled which focus on the wellbeing of people and planet — for example the Donut Economics model of Kate Raworth, the UN’s Human Development and Social Development Indexes, WellBeing metrics, Genuine Progress Indicators, a Happy Planet Index and an initiative to measure Gross National Happiness.
‘What get’s measured gets managed’ is the old adage. The Great Reset needs to take that lesson firmly to its heart and start the transformation by re-focusing what we value and measure on what really matters.
Design new business incentives — you get what you pay for
Inextricably linked to metrics are incentives. In 1996 the Tomorrow’s Company Inquiry from the UK’s Royal Society of Arts (which I was involved in) showed that shareholder value as the only indicator of company success was damaging both to companies and to society. And didn’t even do a good a job for shareholders either. About every five years there is another big initiative somewhere saying much the same — the most recent being the damascene conversion of the US Business Round Table to a point of view that sees a changed purpose for companies ‘To promote An Economy That Serves All Americans’.
But in the real world of incentives it has been business as usual all this time. Venture capital companies and institutional investors, even those using public money, rarely ask even the most basic questions about social and environmental impacts when piling masses of cash into digital or other wonder companies or propping up those at the heart of the problems we face. Those sorts of tricky questions are left to ESG — Environmental and Social Governance funds and Social Innovation initiatives, which though growing in scale and importance, are a really a sideline to the main event — making as much money as possible in the shortest possible time.
If that’s what you incentivise, that’s what you will get. Change the incentive change the outcome.
Investors — Look forward to hearing your new ideas.
Build genuine connection — distance is the danger
In HumanKind Rutger Bregman shows the heartbreaking consequence of the distance between leaders and the the lives of the rest of us and how that is the biggest problem of all. He cites a number of examples, but finishes his book with a look at the 1914 Christmas Day Truce at the start of the First World War. Over 100,000 troops laid down their arms on the front line to play football, share stories, family photos, food and drink. But it wasn’t just a Christmas Day thing, in some places this lasted a number of weeks, with many servicemen remembering it as the highlight of their lives. It could easily have escalated into full scale peace as both sides were reluctant to restart. Only the dogged perseverance of generals far away who used propaganda to stir hate and instil obedience through orders to court martial anyone for ‘friendly gestures’ towards the enemy managed to kick start the war once again. Their distance from the people and the consequences of their actions was the critical factor.
Digital technologies provide an illusion of connection. Anonymity provides cover for trolling, fuels polarisation and allows all to feel superior to others from the comfort of our own little bubble. Our disconnection from the food chain allows the horrors of much factory farming and distance from nature allows us to airbrush the effects of climate change and environmental degradation from our minds. The ultimate distance provided by autonoumous weapons allows detachment from death (of ‘them’) at the press of a button.
Meanwhile, back at all our homes, as Covid has shown most clearly, we are blithely trusting total strangers, helping our communities, giving time and money to charities and providing billions of large and small kindnesses to each other every single hour of every single day. Which of course goes unremarked.
Finding ways for technologies to harmonise not polarise and for us all to make deeper, more meaningful connections with each other and with the natural world will reduce the distance that allows us to see our fellow human as we truly are, not ‘other’ but just like us and part of the solution, not the source of the problem.
These four building blocks are just some of the things that can make the Great Reset the transformation our generation can look back on with pride and probably amazement. Let’s get to it!
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By Hilary Sutcliffe, Director, SocietyInside. Member of WEF Global Future Council on Agile Governance and previously Co-chair of GFC on Values, Ethics and Innovation.
