SIX CAREER STRATEGIES TO OPTIMISE IMPACT AND INCOME
FROM EXTRACTION AND EXCLUSION TO REGENERATION AND INCLUSION
HOW MUCH TIME DO YOU BELIEVE THE GROWTH SYSTEM HAS TO DECOUPLE?
Six different career strategies which align with your view on whether we continue to commit to the growth system and seek to decouple extraction and exclusion at the fastest possible pace, or start to shift to a post growth system by design or destruction.
Growth Roles , no differentiation between extractive and regenerative growth, don’t seek to optimise impact and income through a lens which seeks equilibrium between planet, human and economy. They are experts in growth. I don’t really work with any Level 0 people.
STAGE 0
STAGE 1
Experts in making the incumbent extractive core business less extractive, or less bad, year on year whist maintaining hitting existing revenue and profit growth targets. Most Chief Sustainability Officer (CSO) roles and indeed 99% of sustainability industry are focussed on Stage 1 even though many, would categorise themselves as Stage 2. I would also include CEO’s and board members of businesses the world sees as leaders in sustainability in this stage. Unilever, IKEA, H&M etc, etc.
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Stage 1 roles seek to decouple extraction and exclusion from economic growth at the fastest rate. However, that rate is always defined by financial performance the growth system demands. As long as growth remains, budgets and commitments increase. We are about to find out how different Stage 1 roles respond to degrowth situations of which stagflation is the most serious. Where profits remain high in sectors like Energy, Food, Water and Shelter. Stage 1 roles will continue to expand. Other sectors will undoubtedly see Stage 1 roles flat line if profits collapse for a sustained period. Waiting until growth returns. Some Stage 1 leaders will be OK with this, certainly those from a more linear business background.
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I work with Stage 1’s looking to build more Stage 2 elements into their next internal role as well as those looking externally.
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Most Stage 1’s, especially those who see sustainability as a vocation not a career, want to move to Stage 2 as quickly as possible are much more excited both by the impact/income mix of Stage 2 as a stepping stone to 3, 4 or 5 but also to de risk their career to not rely on growth for impact.
STAGE 2
Hybrid roles with at least 20% time dedicated to scaling the new, 80% retrofitting the old, but evolving to a 50/50 balance of time. The ceiling of the Chief Sustainability Officer title. The top 1% of CEO’s, CFO’s, Strategy and Commercial leads at businesses the world sees as leaders in Sustainability might also qualify as Stage 2.
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Stage 2 roles are still relatively rare but have been increasing in frequency. All the world’s best decouplers will be in at least a Stage 2 role. Most will have used degrowth scenarios in scenario planning and to build more ambition in their roles. They are unlikely to have ever operationalised degrowth scenarios. Most see Stage 2 as a stepping stone to Stage 3 or beyond. Stage 2 roles often provide their first ‘scaling the new’ experiences, which are required in later stages. These new experiences give the opportunity to reimagine personal brand and network.
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Stage 2 roles are still growth dependent though, still vulnerable when growth stalls and profits drop. The boldest elements potentially delay until we return to acceptable growth.
STAGFLATION CONSEQUENCES
Like Stage 1 roles, Stage 2 roles in sectors focussed on human need: energy, food and agriculture, water, shelter will continue to grow, even accelerate if profits remain the same or increase. The new elements of the Stage 2 roles in many non-essential sectors are likely to be scaled back as disposable income contracts with more and more being spent on need. The very best decouplers in the non-essential FMCG space might look to change sectors rather than wait for growth.
STAGE 3
Scaling the regenerative division of an extractive core business, Stage 3 will typically be a commercial leadership role.
The most interesting Stage 3 roles seek to scale regenerative products, within circular business models and experiment with next generation stakeholder ownership models, which are less growth addicted, experimenting with both Stage 5 and 6 scenarios.
Most Stage 3 roles though, focus only on products and business models with a growth capitalist system.
There has been an explosion of Stage 3 roles as businesses seek to jump from Stage 0 or 1 to 5 as quickly as possible.
The most ambitious Stage 3 roles have become very desirable. They appeal for different reasons, so competition for these roles is fierce. For example:
Stage 0 Commercial Leaders – Want these roles, but they can’t differentiate between extractive and regenerative growth – They are usually unsuccessful.
Stage 1 CSO types – Want these roles but usually lack commercial and P&L credibility in the eyes of the system.
Stage 2 Commercial Leaders want to accelerate their credentials for scaling the new.
Stage 2 Sustainability Leaders for much the same reason, to continue to reposition their brand further towards scaling the new and prove their commercial credentials.
Stage 3 leaders from other organisations with less impactful product ranges or more linear ownership models.
Stage 6 leaders are attracted by the much higher salaries on offer, without compromising impact.
Stage 4 & 5 leaders typically don’t want to go back to Stage 3.
What are the potential negatives of Stage 3 roles?
Like Stage 1 and 2 roles, they are funded by ‘extractive’ profits. Stage 3 roles are often loss making or certainly don’t deliver the same ROI as the core businesses. Consequently they are vulnerable to being diluted or mothballed if revenues and profits of the core business shrink.
I differentiate between two types of Stage 3 host businesses:
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Essential extraction – Core Product ranges that are essential to human survival but are currently extractive – energy, food and agriculture, water, shelter. They are like to thrive even in times of economic contraction as revenues and profits in the core business remain strong, for example, a food commodity business investing in regenerative agriculture, experimenting with stakeholder capitalism investment models.
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Aspirational extraction – Core product ranges that are more aligned to humans want, not need. Most FMCG’s, clothing, white goods, home furnishing, but any business with elastic demand. Stage 3 roles in these businesses are likely to be scaled back or delayed as profits drop in line with a fall in disposable income. They will return if and when growth return.
Most Stage 3 leaders I work with see these roles as steppingstones to stage 4, 5 and 6 roles.
STAGE 4
Early-stage businesses, or growth businesses which help extend the life cycle of extractive products and business models. They are usually increasingly critical in supply chains and critical to the success of Stage 1 sustainability strategies, which look to address everything other than consumption.
They are particularly appealing to Stage 1 or Stage 2 leaders who are targeting these organisations either instead of progressing to Stage 3 or as part of an advisory portfolio.
Like Stage 3 roles, there is huge competition between sustainability and commercial leaders for the best Stage 4 roles.
Stage 4 organisations are interested in hiring Stage 1 and Stage 2 Chief Sustainability Officer types into commercial strategy roles, as employees or advisors, because they can help them understand how to penetrate supply chains deeper and quicker. Those same clients are also interested in acquiring Stage 4 businesses.
Things to consider:
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Stage 4 businesses extend the life cycle of the extractive products and business models, so the boldest, most price sensitive Stage 4 businesses are still vulnerable when costs become, critical. Last year all Stage 4 leaders I worked with were extremely bullish about the future.
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Depending on your view on how quickly we will need to shift from extraction, you are likely to use Stage 4 roles to build stage 5 competency.
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I often work with Stage 1 or 2 CSO types to rework their brand and their network to secure one or two Stage 4 advisory roles in addition to their full-time roles.
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Depending on your income needs the smaller stage 4’s might not give you the income you need. However, as advisory roles either in addition to your full-time role, or as part of a strategy to upgrade your brand and portfolio, they are very relevant.
STAGE 5
A business with a product or service that aligns with a resource constrained future, backed by traditional linear profit maximising shareholder capital.
A Stage 5 leader in a Stage 5 business isn’t reliant on the profits of the core business of its parent company like a Stage 3 leader.
Their business is usually focussed on one of two areas:
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Sectors which are seen as essential to human survival, so the last sectors to have growth caps imposed or where demand is inelastic in stagflationary scenarios. For example, renewable energy, regenerative agriculture, water and shelter.
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If sectors which are seen as essential don’t interest them, they focus on the inevitable acceleration for the need for humans to consume time rather than stuff. As we decouple happiness from extraction mental health is a huge growth area, as is physical health and education. Any time-based activity.
Most Stage 5 businesses will thrive even in degrowth scenarios. The longer those scenarios continue, the more likely Stage 3 leaders in businesses where the core product is aspirational and vulnerable to a collapse in disposable income, will look to jump to Stage 5, rather than wait for growth to return.
Stage 5 businesses align with our current shareholder capitalism model system in its current form. Those who believe in that system predict the billionaires of the future will be Stage 5 leaders.
The Stage 5 leaders I work with, are different. They might not believe we will see a shift to Stage 6 capitalism or a post growth system in their career. However, the Stage 5 leaders I work with believe that our linear short-term shareholder capitalism profit maximising system will still need to evolve significantly towards more non-linear stakeholder capital.
So, whilst Stage 5 businesses are growth businesses that can be backed by every type of capital, public, private, family office, PE, asset management, sovereign wealth fund etc, etc. The stage 5 leaders I work with are drawn towards capital that is both abundant and has more long-term profit optimising capital built into the DNA. Sovereign Wealth Funds, Certain Pension Funds, Family Offices etc.
When I work with a leader or indeed a leadership team already at Stage 5 on what’s next the number one frustration or thing, they would do differently is to seek more aligned non-linear, profit optimising stakeholder investors.
Late Stage 5 is probably the aspirational sweet spot for most people I work with. Seen as the most inclusive of our current system.
STAGE 6
Regenerative Products and Business Models backed by non-linear, profit optimising capital
They believe that regenerative products and models that are inclusive cannot be achieved within our current capitalist system.
Two big differences from Stage 5 leaders:
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They work for businesses that are growth agnostic, aren’t addicted to growth.
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Their income potential is much lower, because profits are shared across the ecosystem, or because success isn’t determined by growth.
To date when I’ve worked to help a Stage 6 leader, it is usually because they want to see if it’s possible to exponentially increase their income without overly compromising on impact. By looking at Stage 3 or Stage 5 roles.
They are in demand as the mainstream is moving to towards them, exploring stakeholder capitalism. The most ambitious Stage 3 roles are experimenting with Stage 6 scenarios. As are later Stage 5 businesses backed by more long-term stakeholder capital. Both pay significantly higher salaries.
I recently helped a Stage 6 Commercial leader move to a Stage 3 role for a 500% increase in income, but with a role that they felt was exploring many of the social enterprise themes they were experienced in.
Stage 6 leadership skills are increasingly in demand as we experiment with non-linear ownership models or growth agnostic models. Market responses to stagflation will undoubtedly create more demand for next generation social enterprise and co-operatives focussing on energy, food, water and shelter.