Gil Friend’s Blog

“The ultimate, hidden truth of the world, is that it is something that we make, and could just as easily make differently.” —David Graeber, RIP

Happy new year, and welcome back—to a year that we all hope is really new—and that is already busy shaking us up!  (I love all the hopes and wishes for a better year in 2021, but I’m reminded that history is not driven by calendars. It’s driven by human actions, and the contingencies the world offers up to us. The assault on the US Capitol is just one reminder.)

It’s been along time since I last posted at length, so let me give you a quick update on an unquiet year, let you know what I’m up to now that I’m back in saddle (after an extended hiatus focusing on  personal matters), and share a few reflections on the year and decade. Not a top 10, but some perspectives on this year, on what may lie ahead, and on the promise—and problem—of purpose. (We’ll be rolling out some new offerings this year, so be sure to stay on—or join—this list to make sure you get the word.)

RECENT WORK (in a “quiet” year)

  • Thought partnerships with CEOs, CFOs, and CSOs offer an opportunity for thinking—deeply—and what’s so and what’s next.
  • A growing focus on climate finance (including work with the ZNEAlliance on regional climate strategies for the SF Bay Area—and how to finance them; with the UN on engaging the finance organizations that manage ~30% of total global assets on “systems change for the common good”; and developing some new financial offerings of our own.
  • Life on line, with keynote provocations to BuiltGreen on sustainable cities and retrofits at scale, Conscious Capital on the structural defects in modern “capital-ism,” the Buckminster Fuller Institute on design science, the Energy & Environment 100 on my nearly 50 years in the sustainability trenches, and our own webinar series on Covid, Climate, and Living with Grace, Calm, and Power in a VUCA (Volatile, Uncertain, Complex and Ambiguous) World. You’ll find some of these on my YouTube channel; we’ll post others soon.

SUSTAINABILITY TRENDS
In the world around us, the fossil fuel industry appears to be entering terminal (though slow) decline, with renewable energy and distributed energy resources in the ascendent, and EVs gaining momentum as country after country bans internal combustion vehicle. But the sustainability catechism has taken some hits:

  • Recycling and circularity are buffeted, as global supply chains are challenged—in both directions. One potential outcome: the return of short loops. One certain outcome: the continued rapid rise of renewables, perhaps the ultimate short loop. As Grist put it, 2020 was a win for climate activism in many ways.
  • Breakdowns in the “S” of ESG, as the gig economy joins the neoliberal agenda of dismantling government and hard-won workers rights, and income disparties widen. On the other hand, ESG is on the ascendant in the global investment world. Which are you going take as the better leading indicator?
  • Despite loftier-by-the-month GHG emissions reductions goals, we still live in the land of “predatory delay,” with very few companies, countries, or cities meeting those goals.
  • And we find ourselves in the tenacious grip of not one but three plagues: COVID-19, the climate crisis, and systemic racism.

THE CERTAINTY OF UNCERTAINTY
I wrote this fully recognizing the folly of writing anything these days—since anything I write may be overtaken by events by the time you read it!—certainly until the US political theater settles down on January 20. Hopefully. But one of the lessons of this crazy year is that

“Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.”  -John Allen Paulos

A deep realization rippled through society as we came to terms with Covid last spring: the profound uncertainty that we are living in as the pandemic era emerges. The joke is that we’ve always lived in a world of uncertainty; we’ve just acted lived and acted as though we could count on the ground beneath our feet not shifting, as though we could predict what is to come. That’s how we’ve interpreted personal experience; but it’s not what history tells us. So we’re challenged to consider:

  • How will we live, manage, and invest in the world of utter uncertainty?
  • How will we prepare our selves, and our institutions, to be agile and adaptive.?
  • How will we develop strategies and cultures of contingency?
  • How will we maintain peace of mind, and organizational coherence, in the face of roiling change?

THE PROBLEM WITH PURPOSE
Living with purpose, having purpose at the heart of your business’s core commitments, seems to be one answer. It’s a way to keep all eyes on the prize, on a longer time horizon that buffers you from the addiction of  quarterly earnings reports, the crisis du joir, and seemingly constant stream of “breaking news” (which seems to be the only sort of news there is these days).

The purpose-driven organization is, arguably, more adaptive—able to operate with a more flexible notion of what business it’s really in, able to “float like a butterfly, sting like a bee,” able to shift its near-term focus in service to its long-term purpose, able to maintain a steady gaze on the horizon while riding out the storms of the moment?

“A visionary company carefully preserves and protects its core ideology, yet all the specific manifestations of its core ideology [from strategies to products] must be open to change and evolution.” -Jim Collins and Jerry I. Porras

But there’s a problem with purpose, one that the brilliant anthropologist and cybernetician Gregory Bateson wrote about more than 50 years ago in a chapter titled “The effects of conscious purpose on human adaptation,” in his seminal Steps to an Ecology of Mind.  Purpose, for all its focusing and generative power, risks narrowing our field of view, risks losing the perspective and context that we so desperately need in order to be wise. Especially in tumultuous and historic moments like these.

So here’s another challenge:

  • to be committed to purpose, but not lose the context, the relationships, the utter interconnectedness and interdependence of all life;
  • to act effectively in the short term in the face of the uncertainty of the medium term with a commitment to the long-term;
  • to learn to ride out the storms with a measure of calm and clarity, while others panic or dither.

TALKING THE WALK
How? Well, that’s worth a conversation, don’t you think? There are no playbooks, no checklists, no algorithms that can figure it out for you. The path comes alive as we walk it, as we talk together about our journey, our commitments, and what we’re learning.

Traveller, there is no path. The path is made by walking. -Antonio Machado

I’ve learned this year that people are hungry for meaningful conversations. Conversations that move worlds. Shall we have one?

Those are the conversations I piloted in the spring, and which we’ll resume early this year with series of new offerings—courses and discourses that I promise will open new worlds and opportunities for you, your businesses, and your communities.

“The old idea was not simply to turn the page or change a number on the calendar and simply start over again; that way leads to the next world being just like this one. Rather the world had to be symbolically dissolved before it could be created anew. Time has to be not just stopped, but broken open in order to break the spell and the hold that the dying year has on life.” – Michael Meade

THANK YOU!
Thank you, as always, for all you do. Watch for the announcements about what’s to come.

Meanwhile, stay resolute, stay safe—and stay tuned!

In solidarity,
Gil

PS: Is there something for us to talk about, or possibly to do together? Drop me a note or give me a call!

Gil Philip Friend
CEO, Natural Logic Inc.
Founder, Critical Path Capital and the Critical Path Academy
The task ahead (if we were to really tell the truth about it):
Reinventing the economy of an entire planet.
This planet. In one generation.

Tel: 1-510-248-4940 | Cel: 1-510-435-6346 | Blog | LinkedIn | Twitter | Facebook | YouTube

Please join me Tuesday June 16, 12:30p-2:00p Pacific Time for the fifth in our series of online conversations, exploring how we all might live with grace, calm and power in this VUCA world—and help guide what Dr. Fernando Flores calls the “reconfiguration of everything.” (The prior calls are available on my YouTube channel, linked in the sig below.) NOTE: Because of Zoom’s new security protocols, you must pre-register to attend.

Our worlds change out from underneath us

When I began this online discussion series in March, connecting the coronavirus and the climate crisis was an edgy idea. But now those seems just a hint of the disruptions we face—economic turmoil, racial injustice, US/China tension, the collapse of globalization, and, oh yes, the next pandemic.

We’re all overwhelmed, confused, afraid, indignant—and many of us are resolute, determined and energized by a once-in-a-lifetime opportunity for change. (And only 9% of us (according to one poll) want to go back to what used to be called “normal”.)

Which leads me to wonder:

How does the impossible happen?

How does the impossible happen, in a world of concatenating, co-evolving, contingent, crises? How does it happen blazingly fast?

We’ve all heard the almost automatic chorus of “It’s always been this way.” “It’s impossible.” “We couldn’t possibly.” “Certainly not quickly.” “We can’t afford it.” And yet…

As we and a dozen of our favorite competitors challenged 80+ leading companies last week (in “The Covid Covenant”),

“…the pandemic has shown that we can take action at speeds we did not think possible, with coordination we didn’t believe possible, and on a scale we did not believe possible. All without hearing cries for predatory delay, such as ‘how will we pay for it?’ and ‘we need to take things slowly.’

“What if we could we bring the speed, scale, scope and coordination of their pandemic response to the other mega-issues looming before us?”

That’s some of what we’ll explore on this week’s call. Yes, we’ll record it, but it won’t be the same without you there! I hope you can join us.

Thank you, in any case, for all you do. Be sure to register for next week’s call, stay safe, and stay tuned!

PS: What can you do right now?

Right now, when you can’t do what you usually do—or at least not in the same ways—what will you do? Where will you focus? What capacities will you—and your company—build, in this time of reflection, reset and redesign? How will you learn to plan—and execute—in a world where the rug might be pulled out from under you at any moment? What conversations will you initiate and nurture in your organizations? Who will you invite to join you in these conversations? What are you—and your organization—really here to do? How will you resist the pervasive pressures for short term gain? Who do you need to be to do what your’e really here to do?

Do these questions and this thread provoke you? Unsettle you? Inspire you? Do they raise questions you hadn’t thought to ask—or hadn’t wanted to ask? Then let’s schedule a personal conversation to explore how I can add value to you or your organization—whether as strategic advisor, coach, thinking partner, or board member—as you reset, and cultivate the NEXT “normal”.

Just call or drop me an email—including a brief idea of what you’d like to discuss—and propose two or three potential times (including your time zone). I’ll do my best to respond promptly.

THANK YOU!

Gil Philip Friend
Founder & CEO, Natural Logic Inc. | Founder, Critical Path Capital
The task ahead
(if we were to really tell the truth about it):
Reinventing the economy of an entire planet.
This planet. In one generation.

Tel: 1-510-248-4940 | Cel: 1-510-435-6346 | Blog | LinkedIn | Twitter | Facebook | YouTube

How shall we live, in the midst of what Equilibrium Capital CEO Dave Chen calls “a live-fire rehearsal for climate change”?

While Covid grips our minds, the climate crisis looms not far behind. They may seem different on their face but they share common roots, common dynamics and perhaps common strategies.

Both reflect a blindness to living systems, to the dynamics and distinctions of systems the failure of management systems to reflect/dance with physical and biological reality, to the “financialization of everything in these days of late capitalism, to the nature of power, and to the shredding of the substance-of-we-feeling and sense of commitment to solidarity of Terrans on Terra.

Please join me for our continuing online conversation, Friday May 8, 12p-1:30p Pacific Time. NOTE: Because of Zoom’s new security protocols, you must pre-register to attend.

In our prior calls, we’ve explored: the parallels between the covid crisis and the climate crisis; the three curves that rule our lives, and pervasiveness of “predatory delay”; the hypotheses and lessons of our vast, planetary experiment; stress testing complex planetary systems; the priorities of urgent political action. (You can view the prior videos here.)

In future sessions, we’ll dip deeper into the matter of solidarity, including a visit with Bruno Latour’s provocative Down to Earth: Politics in the New Climatic Regime; the ways our words shape our worlds, and the moods and power we can cultivate in ourselves and our commitments; the nature of power, and we might nurture, wield, fight and dance with it; and the specifics of what to do and how to live in these times—in ourselves, families, communities, businesses, and social and financial action.

I look forward to seeing you next week. Please register now, and feel free to share this invitation with others you think belong in this conversation.

In solidarity,
Gil

[Originally posted to LinkedIn]

The pandemic’s risks arise in at least three dimensions: medical; psychological; social/political. And a challenge arises for each us in one very particular dimension: What do we do now, those of us who don’t hold front-line responsibility for pandemic response? What will we do, and who will we be?

I’m writing this just after a biweekly two-hour call with 32 colleagues around the world, under the guidance of Fernando Flores and BS Rousse. We shared our moods and circumstances in the midst of the pandemic, and reflected on the emerging global realization that “we are one planet, with one biology,” as Flores succinctly put it.

I won’t attempt to summarize, just to share my own experience and perspectives, in hopes that may contribute something to others.

My mood in this moment is remarkably serene—remarkable given the uncertainty, risk and fundamental contingency we all live in now. (Not that we didn’t always, but that’s another story.) Cultivating mood has been a fundamental part of our group’s work together, and much like cultivating a garden, it is offering a bountiful harvest.

My experiences and reactions to the covid crisis have come in waves. First, coming to terms with the physical risks and challenges: hand washing, extreme sanitation, isolating at home (except for medical appointments and walks in the park), treating our home like a space station with an airlock between us and the outside (and grateful to generous friends who’ve run shuttle missions for us). Second, beginning to grasp the economic impact to the country and the world, and then quite suddenly to our family as we’ve seen income vanish and scrambled to replace it with new ways we can deliver value online, and gain some sustenance from doing so. Third, the grief—the personal, not abstract grief—only landed a few days ago, as my sister suspended the weekly Shabbat dinners our families had shared for more than 30 years. That was the first time my tears flowed, unrestrained.

But, surprisingly, I see powerful openings too. I’m observing: the rapid, if uneven, recognition of our common fate and thus common interest in mutual care; the impressive (and again uneven) ability for humans, and our institutions around the world, to coordinate complex systems and responses; the faint glimmers of solidarity; the striking resonance of the covid-19 infection and mortality curves with the climate crisis GHG emissions and global temperature curves—and the parallel impact of rapid, focused action vs predatory delay.

And I’m observing the emergence of a new inquiry: Since the world will never be the same, since (as Flores suggested) everything may emerge from this crisis reconfigured, what might happen, what might emerge, what possibilities might open if some of us choose to hard-focus right there—on the reconfiguration of everything—while most people and institutions are absorbed in the immediate urgencies before us all, on the pressing needs of the immediate now. What might we be able to imagine, stimulate, provoke, and nurture?

I invite you to explore these possibilities with me. (Perhaps in a series of Zoom calls, perhaps in a shared writing space, perhaps in some other ways you might suggest.)

In solidarity,
Gil

“If the dream comes close to the dreamers, it happens because they have been organizing themselves according to their dreams” ~Paulo Freire

#covid coronavirus #climatecrisis #contingency #cultivation #mood #regeneration #reconfiguration

UPDATE: Please join me on Zoom—Thursday, April 2, 1:00-2:30pm Pacific—to continue this exploration. Register in advance for this meeting. (After registering, you will receive a confirmation email containing information about joining the meeting.)

[This article was originially posted on LinkedIn August 23, 2019; join the discussion there.]

Walking the talk begins with the talk. But you’ve got to walk.

<tl;dr>

Milton Friedman was wrong. Purpose matters.

“The ‘it’s only business,’ profit-above-all focus misses significant, even game-changing, business opportunities.

181 CEOs have signed on to broader purpose. Skepticism is warranted, but this is potentially a BFD.

Walking the talk matters. But talk opens possibility…of where and how to walk.

Let’s applaud this first step, and watch them like hawks.

And let’s all put our money where our mouths—and our hearts—are.

</tl;dr>

An important provocation

For all the criticism from right and left that the Business Roundtable declaration on the purpose of business has rapidly garnered, this is potentially a very big deal.

Nearly 200 US CEOs have declared that their “Principles of Corporate Governance that…since 1997 has stated that corporations exist principally to serve their shareholders…does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable.”

By doing so, they’ve broken with the governing myth of US business (explicitly affirmed by the Roundtable more than 20 years ago, and many times since) that the primary, or for some the only, purpose of business is to maximize return to shareholders.

It had the power of catechism—nine out of 10 people on the street will return the expected answer without hesitation. And yet this “truth” was barely 50 years old, only held dominance for a half century of capitalism’s three-century run.

The founding saint of course was Milton Friedman, who fiercely asserted that “one and only…responsibility of business…[is] to increase its profits.” In contrast, the Business Roundtable and its 181 CEO signatories (with, notably, only one or two fossil fuel companies on board) declared:

While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:

· Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

· Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

· Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

· Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

· Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.

Customers. Employees. Suppliers. Communities. Environment. And shareholders. (We laid out a similar provocation—and how to fulfill it—in the Declaration of Leadership for Sustainable Business in 2005, offering many of the themes picked up in the Business Roundtable declaration.)

Their declaration opens the possibility of a different capital-ism, of an historic shift from the mono-capital-ism of financial capital to a multi-capital-ism committed to natural, human, social and constructed capital as well as economic capital.

Its very vagueness opens an opportunity—to figure out what’s needed to make it real, to elevate the global aspirations of the past 50 years, since the first Earth Day, to a new level:

To transform the economy of an entire planet—this planet—within one generation.

Perspectives on purpose

Purpose in business is not a new Idea. Management cybernetics guru Stafford Beer declared “The purpose of a system is what it does.” Bank of America founder AP Giannini said, more than 100 years ago, that the purpose of the bank was not too maximize return to shareholders, but to provide credit to immigrant communities in San Francisco that couldn’t access any. “If we do that well,” he reportedly said, “our shareholders will make money.”

“A banker should consider himself a servant of the people, a servant of the community,” Giannini said. “There is no fun in working merely for money.” And he built the largest bank in the country.

Christine Arena, in The High Purpose Company, analyzed “extraordinary companies that are driven by purpose—and are making money _by_ being socially responsible, not in spite of it—whereas others simply pretend to be.”

And as I wrote in 2016,

“The ‘it’s only business,’ profit-above-all focus misses significant, even game-changing, business opportunities. In fact, it literally cannot even see them; they don’t show up on the profit & loss statement, the balance sheet and the other tools by which business steers. It’s not only that we emphasize profit to the exclusion of other things that are valuable to us – life, heath, community – but that we don’t even know how to accurately count even those few things that we acknowledge we value.

“The good news: getting it right opens a vast arena of opportunity – to build profit in its multiple dimensions, to reduce risk by building agility and resilience in the face of inevitable surprises, to align strategy with purpose – the true purpose of the company itself, and the purpose of the people who constitute it.

“The key: to orient – or reorient – your business to the pole star of purpose – whether the purpose that brought you to it in the first place, or the purpose there for you to discover now.”

Walking the talk

The Business Roundtable statement is not the solution to all our ills. Many commentators are skeptical and have challenged it as just talk. Will these companies actually _do_ anything differently? Will they shift their practices, their investments, their lobbying positions, to align? Will they put their policy commitments where their mouths are? Will they both reject and work to end the market-distorting and environment-damaging subsidies and unmonetized externalities that keep the fossil fuel and other toxic industries afloat? Will their boards push past short-termism and embrace strategic duty? Will they pay their taxes?

Will “investing in our employees” including sharing productivity gains and flattening pay scales?

Will “supporting the communities in which we work” include ending, not reducing, toxic emissions? Will it include the living world? Will they be transparent and specific and the actions and impacts?

Will protecting the environment include investing in the regenerative capacity of the living systems /economy of planet earth that undergird the financial economy and all we hold dear?

Bold declarations can be a distraction and a cover, an attempt to divert the rising skepticism about modern capitalism and the behavior of global corporations, both around the world and in US monetary/political system. But they can also be a banner, provide a rallying cry, a touchstone against which actions can be measured and the declarers held to account.

Because “walking the talk” begins with the talk. The statement is only words, and consistent action is needed. But words set the context for the actions people choose. We create worlds as we speak, and open or close possibilities for action. I hear these words as opening possibility.

Now let’s see if these companies deliver. And help them when they do. And challenge them when they don’t.

Some have questioned the motives of these CEOs and criticized their declaration as just a defensive reaction to the growing challenges about capitalism, exemplified by the Bernie Sanders presidential campaign. That is doubtless one of the factors, and least for some of these leaders-who-follow.

But just as the Sanders campaign has almost singlehandedly shifted the frame of acceptable political discussion in United States, this declaration has in a single moment shifted the frame of business discussion, perhaps in the world. “The purpose of business” is on the table, and that’s a good and powerful thing.

I’m certain we will see both unevenness and disappointment in how the rubber meets the road. But isn’t that true of everything? I predict a classic Gaussian distribution of rubber meeting the road—or not. Some signatories will do nothing, some the merest of lip service. Most will make limited—though largely superficial, wholly inadequate—moves. Some will grapple with the challenge, make serious efforts, and take meaningful steps. A few—perhaps a very few—will commit to the depth, power and potential of the declaration, and begin transform.

As for me, I’m inclined to place my investments on the latter group—and short the first group.


What to do? Put your money where your purpose is.

The CEOs themselves seem to agree, when they say, “we urge leading investors to support companies that build long-term value by investing in their employees and communities.” Sort of.

But for that to work, the signatory companies will need to get specific, and get transparent, about what actions will they take, chosen by what criteria, delivering what results.

I’ve worked closely with leading companies looking for ways to “make money while making sense.” I’m always willing to give both companies and people the benefit of the doubt, and judge them by their present and future as well as their past. But in the words of that noted radical, Ronald Reagan, “Trust but verify.” Back your good words with deeds.

This presents a challenge to asset managers as well as the companies we all invest in, work for, and buy from. There are well-established mechanisms for shareholder accountability, not for accountability to the other stakeholders (other than boycotts, labor action and the like). “Accountability to everyone means accountability to no one,” the Council of Institutional Investors rightly observed, in their rapid criticism of the Business Roundtable for putting shareholders last, seeing them “simply as providers of capital rather than as owners.”

To actually provide accountability to everyone, companies will need to provide a clear line of sight—to investors, customers and employees across their organizations, at every level—connecting purpose, actions, results and impacts.

So, to the signatories, to the thousands of CEOs who have not yet signed on, to their boards, shareholders and stakeholders—that is, to all of us—I offer three challenges:

  • Know that even though incremental steps are essential in large, complex undertakings, it wasn’t incrementalism that got humanity to the moon and back.

So ask: “Are my goals sufficient to the challenges, risks and opportunities we face? Is ‘sustainability’ a worthy enough goal, when the challenge perhaps is to nurture the regenerative capacity of the Gaian system on which all that we value depends?”

  • Know that the purpose of your business is not, as Milton Friedman said, to maximize returns to capital. It is, as Bank of America founder AP Giannini said, to do what the business is there to do.

So ask: “What business are we really in? What am I really here to do?”

  • Know that every time a company makes a capital investment or commits to a supplier, every time it launches a product or makes an offer in the marketplace, every time we buy a meal or a car or a t-shirt, every time we slap a dollar or Euro, a yuan or a dinar on the counter, we’re voting for a future. Not every four years. Every day.

So ask: “What future am I voting for?”

# # #

© 2009 Gil Friend. All rights reserved. Pay be reposted only unedited, with attribtion and link back.

Gil Friend is CEO of Natural Logic, where he has challenged and guided some of the world’s leading companies to build value and competitive advantage by applying nature’s 3.8 billion years of open source R&D to today’s biggest problems, and Founder of Critical Path Capital, applying those decades of experience to help “finance the future we favor.” Mr. Friend served as the first Chief Sustainability Officer for the City of Palo Alto, driving unanimous adoption of one the country’s most aggressive sustainability and climate action plans.

He was named “one of the top ten sustainability voices in the US” by The Guardian and an inaugural member of the Sustainability Hall of Fame by the International Society of Sustainability Professionals.

Mr. Friend served as advisor to the California Governor’s Office during Jerry Brown’s first term, and as co-founder of the Institute for Local Communication (an early internet company) and the Institute for Local Self-Reliance (and urban think-and-do thank).

He is author of The Truth About Green Business (FT Press, 2009) and numerous articles for GreenBiz, Sustainable Brands, and the LA times Syndicate. He began his professional journey at Buckminster Fuller’s “World Game” nearly 50 years ago.