Here are some thoughts:
Current business models have been extensively discussed and challenged by academics and practitioners, and the way leaders have been coping with the present economic and political instability has been challenged.
All signs show that the capitalist system is currently dysfunctional and under siege. In recent years, business has been viewed by many observers as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community (Porter, 2011).
There is a growing notion that something has to be done to turn things around. The current status quo in management does not seem to answer the new demands the present world is asking for.
Change is needed.
One of the most charismatic authors whom has been discussing the theme is Meg Wheatley – an expert on innovative leadership and author of the book Leadership and the New Science (a groundbreaking look at how the new discoveries in quantum physics, chaos theory and biology may change our ways of thinking about organizations).
As Wheatley (2002) questions: “Is it a time of increasing economic and political instability, of growing divisiveness and fear, of failing systems and dying dreams? Is it a time of new possibilities, of great examples of hope, of positive human evolution, of transformation? Are we succeeding in solving major problems, are we creating more? Is it any of these things, is it all of these things?” In her view, it is crucial to know how to answer these questions, since they will affect our choice of actions (Wheatley, 2002).
Having this in mind, Wheatley’s perception is that the current status quo urgently needs to suffer a dramatic change. In her view, there is urgency for “initiatives and programs focused on process improvements developing present systems to work more effectively and more efficiently” (Wheatley, 2002). And further: “support needs to be given to radically different processes and methods, new systems based on new assumptions (…) The work becomes not process improvement but process revolution” (Wheatley, 2002).
Wheatley’s argument is that there is a need for the birth of a new generation of leaders who abandons traditional practices of hierarchy, power and bureaucracy. According to her, those leaders must believe in people’s innate creativity and caring (Wheatley, 2002).
We are currently living a crucial time in what regards the establishing of the first paths in constructing what has been called to be the next techno-economic paradigm (TEP) – a green TEP (Freeman, 1992).
My perception is that we are facing a decisive turning point in the efforts to get business agents to understand how inevitable the incorporation of new sustainable practices within the core of their businesses is. It is fundamental to meditate about what may be lying ahead, what may be projected to be the next logical steps towards the new green TEP. Thus, it becomes crucial to debate about the importance of the role of leadership in the efforts to turn things around and how key it is to generate new leaders that perfectly understand this scenario and get committed to contribute for the rooting of more sustainable practices within society.
In a time when there is an aggravation of social, economic and environmental problems, there are some signs that the current structure is experiencing exhaustion. In order to face future challenges it becomes necessary to alter the directions of production and consumption according to a change in values perspective.
The difficulties facing the inevitable transition towards a green TEP mainly lie on how to change mentalities and not so much on the technological aspects of that process. Today, there has been some resistance from developed countries in accepting and embracing the green TEP tendency, since in their leaders’ perspective the “green model” puts in question their traditional political and cultural hegemony. Private interests become the main obstacle in understanding and establishing common challenges and, above all, in deciding what may be the best path to overcome them.
We live in a world of excesses, where natural resources are being extracted in incalculable quantities and environmental disasters – such as oil spill – have been polluting and destroying ecosystems. In addition to that, it doesn’t seem to diminish the inequalities in accessing those resources and the current culture of consumption is still based on status. In other words, all signs show that the planet is reaching an exhaustion limit. Thus, we are getting to a level of emergency that has never been experienced before.
Mentalities must inevitably change
The path towards the green TEP will require the design and implementation of innovating business and leadership models in order to re-structure the economy. New partnerships will be necessary among big companies, the public and private sectors, corporations and clients, as well as between direct competitors.
If all business agents come to understand that the green TEP will be a reality, they will also understand that they will have to come up with new levels of innovation, which means that they will also need to see beyond and search for new ideas, technologies, businesses and leadership models. Such new expertise is not something that is fairly easy to develop, and thus, those who will be able to learn to collaborate more effectively will have a competitive advantage.
As an enterprise does not sustain itself alone, it becomes a key instrument to try and reach all stakeholders involved and make them embrace a new paradigm. It becomes fundamental to construct what I would call a chain of values shared by all actors, with no exception, and that will serve as the main pillar that will sustain the running of the new economy to emerge.
Having this in mind, one of the most promising tools that has been discussed and put upfront to serve this need for a green TEP is the Sharing Economy (SE). Being a fairly new concept currently in its infancy, SE is a new way of rethinking capitalism and protecting the Earth. It is “a socio-economic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations” (Matofska, 2014).
SE is “known most notably as a series of services and start-ups which enable Peer-to-Peer (P2P) exchanges through technology (…) In its entirety and potential it is a new and alternative socio-economic system which embeds sharing and collaboration at its heart – across all aspects of social and economic life” (Matofska, 2014).
The concept encompasses the following aspects: “swapping, exchanging, collective purchasing, collaborative consumption, shared ownership, shared value, co-operatives, co-creation, recycling, up cycling, re-distribution, trading used goods, renting, borrowing, lending, subscription based models, peer-to-peer, collaborative economy, circular economy, pay-as-you-use economy, wikinomics, peer-to-peer lending, micro financing, micro-entrepreneurship, social media, the Mesh, social enterprise, futurology, crowd funding, crowd sourcing, cradle-to-cradle, open source, open data, user generated content (UGC)” (Matofska, 2014).
Another definition may be the following: SE is “a way of sweating underutilized assets, by building communities around them and turning consumers into providers”, and it has the potential “to reboot businesses across most economic categories” (Varsavsky in Silver, 2013).
If fundamental foundations of a green TEP are ever to be constructed, current times demand a constant promotion of cultural and mentality change. The road is long, no doubt. But it needs to be perceived as a constant effort, where giving up and stagnating will certainly mean to “die”.
Any change needs a trigger and in the case of companies the triggers are their leaders. Thus, the central orienting question must be: how leaders can be agents of change in promoting a transformation in the economy for a better world for everybody through collaborative consumption?
Regarding the Portuguese context, the current crisis that the country has been experiencing had the effect of promoting a debate about new models of economic development. In this respect, one of the most interesting initiatives taking place is a project called “MuVe – Mudança de Valores para a Economia do Futuro” (in English: “MuVe – Change of Values for the Future Economy”), which is an attempt to assess the degree of adherence and readiness for change by the portuguese civil society regarding the various options available. The main aim of the project is to find out how to stimulate the emergence of more sustainable models of economic development as well as who will be the protagonists of this change.
It is insightful
to analyze and interpret the findings of the MuVe project in order to assess
whether or not the SE falls within
the expectations of the Portuguese civil society. Here it is: MuVe.
Find out more about me: