I’ve been having an interesting discussion (offline) about the management consultants’ report reviewed yesterday, which outlines ten “megaforces that will affect every business over the next two decades.”
The report does a good job of laying out what those forces are, and summarising the risks to business. (Broadly they are cost, reputation, regulation, and volatility.) But the report to my mind fails to create a sufficient sense of urgency.
I’ve been thinking about why this is, and I think the main reason is that the report fails to consider or appreciate the wider impacts on society, on people.
You might say that is irrelevant — the consultants’ role is to focus purely on their clients. But I think this is short sighted, both because it understates the impacts on their clients, and it contributes to the problems we now face.
Let me give you two examples of why.
Food prices, for example, are expected to rise by 70%-90% by 2030, and climate change could make these rises significantly more. But the only businesses seen as at risk (or opportunity) by the report are agricultural producers.
But what happens to your employees’ morale (and productivity, health and safety) when the food they buy for their children costs nearly double? (Remember that 46 million americans are already on food stamps.) What happens to that country’s and our country’s disposable income (and the ability to repay mortgages and other debts) when food prices rise by this amount. What would be the impact on spending in other parts of the economy?
Food security is an issue for every company, not just agribusiness.
Water is another example, with similar impacts: on current trends, by 2030 demand for fresh water is expected to be 40% higher than supply. We won’t ever reach that point, of course, because when supply equals demand then price or other mechanisms will step in to constrain what the report says are the four main users of fresh water: people’s drinking, washing and sanitation; and/or agriculture; and/or electricity generation; and/or mining. Constraint in any of these areas could have a major impact on large sectors of the economy. And ‘supply equals demand’ will be reached well before 2030.
My issue with the report, then — despite its commendable attempts to show the systemic interconnections between the different ‘megaforces’ — is that by focusing on the direct impacts on businesses, and not the impacts on the wider system (or ‘society’), the consultants fail to do two things.
- First, they fail to mention the second- and third-order impacts on their clients’ businesses. In doing so they understate the risks, and do their clients a disservice.
- Second, they fail to question how this viper’s nest of interconnected crises arose in the first place. Which means they miss an opportunity for deeper learning, and hence the identification of better solutions.
Just to be clear, I am not picking on the particular consulting firm that produced this report. (I commend their attempts to uncover systemic interconnections.) What I am questioning is the deeper, possibly unconscious, patterns within our consulting industry as a whole, and business leaders as a whole.
The key question I have been debating is: “To what extent should management consultants consider the wider impacts (on ‘society’ if you will), rather than purely focusing on the direct impacts on their clients?”
I think by now that I have partly answered that question. Understanding the wider consequences uncovers second- and third-order impacts on their clients: it allows them to see that they are part of a bigger system, and enables them to see how their success is dependent on the health of other parts of that system. Indeed, you might argue that this is the only job of consultants — to help clients see beyond the immediate implications.
Are there any examples of where this has been done well?
The Iroquois are probably the best example. They would consider the impacts on the seventh generation of their people before taking a decision.
I expect your immediate reaction will be to say that you wouldn’t want the Iroquois acting as management consultant for your business. But the fact is that if we had been thinking like the Iroquois then we wouldn’t be facing the situation we do now. We would have taken action to change direction a long time ago.
As it is, we are charging headlong into ten “megaforces that will affect every business”, in less than two decades. And we are still trying to address those problems by using the same (consulting) thinking that created them.
What has got us to where we are now is the way we take decisions. And it is in the ‘expert’ discipline of management consulting where we can see that “way we take decisions” most clearly.
If we want to become more sustainable, we need a different way to take decisions. We need a different way to do consulting.
What would that look like?
What would ‘sustainable consulting’ (as opposed to sustainability consulting) look like?