We’re talking everything from politics and the global economy to social and sustainability issues. It’s a complex web of competing, unclear and challenging priorities. What’s clear is that 2023 is going to throw a lot of hurdles at businesses – navigating them is going to be a necessity.

In this episode, Alan Hunt, Co-Founder of The Collective, is joined by Farzana Baduel, CEO of Curzon PR and Martin Raymond, Co-Founder of The Future Laboratory and Editor-in-chief of LSN global.

Alan: Farzana, as words for 2023 go, polycrisis feels like an appropriate or albeit bleak choice. We face some of the most difficult geoeconomic conditions in a generation and see a shift to low investment, low growth and low cooperation era. Which of all of these challenges are you particularly paying attention to and why?

Farzana: The challenge I'm particularly paying attention to is low cooperation because this is a time where countries need to come together – to confront and overcome global challenges like climate change. We’re also living at a time when cancel culture is increasingly prevalent – so cancelling entire countries for taking certain positions is really not the way forward. Now more than ever, we need to build bridges with other countries. Some countries will share our values and other countries less so, but with engagement, whether through culture, trade or political diplomatic, we can actually build a coalition of trust amongst other countries in order to rise to the challenge. Global problems can only be solved with global solutions and global cooperation.

A recent Edelman Trust barometer stated that the public are increasingly trusting business leaders more so than government and media. Businesses really have a role to play in times of crisis to show that they don’t just deliver on the bottom line in terms of profit, but the triple bottom line: people, planet and profit. Businesses are entering a new era of responsibility and consequently the trust in businesses is on an upward trajectory.

In times of crisis, there is always opportunity (and a multitude of ways that businesses can thrive, as we saw in Covid). Businesses are increasingly adaptable. I see a lot of companies that are beginning to run parallel supply chains because of geopolitical changes and shifts in positions that could then result in not being able to work with certain countries. Whilst there’s an additional cost and extra thought needed in terms of the supply chain system, companies are building extra resilience, and because of what we saw in Covid, a sense of contingency thinking is becoming increasingly the norm.

Alan: That's really interesting, and Martin I suppose we can look to history in some respect – to how crises have led to a drive in innovation?

Martin: There are many examples of this. In 1905 you had the theory of relativity which brought about the atomic age; in the 60s in America, we can look at how the space race started; even in 2001, science responded by bringing us solutions relating to DNA.

Going forward, it’s not just how democracies respond to this global jeopardy we're facing that matters, but how businesses have to step in and come up with solutions that aren't based on historic precedent, but rather on how you look at solving tomorrow's issues.

We’re seeing businesses not just talk about social responsibility but begin to demonstrate it – hearing CEOs speak like left wing activists in terms of their priorities. Where democracy is not stepping in to tackle global crises, we’re now seeing some companies – for example Google, Pfizer and Ford – stepping in to open up social programs. For the first time, the social contract, the democratic contract and I think the contract with tomorrow is being honoured in different ways.

Rather than see a polycrisis ensue for the next ten years, I think there is an opportunity for democracy to be rebooted, for business to become more about purpose and position, and also for us to have a bigger debate about how we see business, government and citizens perform in a different way rather than how they used to perform in the past.

Alan: Looking at specific examples, we've recently seen issues in Brazil and the recent storming of the hill in the US. Do you think that if we can work towards a democratic contract that looks like business-government-citizen, that we’ll then start to see more acceptance of typical democratic processes?

Martin: I think we first need to consider how democracy works. In some ways, good businesses mimic democracy: collegiate involvement, decision making that isn't hierarchical, heterarchical, (so there are more people involved in it), decisions based on social good not on personal gain or profit, and also the notion that there is a long-term plan to improve the majority of people’s lives.

I think this is how democracy traditionally functioned and at some point it went wrong. If you look at the world today, there are more states leaning towards the right with more and more autocratic governments emerging.

There is a point where we began to approve of autocracies because we looked at where businesses were doing better like in China for example, and the tacit acceptance that business can function within these regimes. In fact, realistically, it isn't possible – you have to forsake human rights, you have to renege on issues relating to social expression, accept that women are second-class citizens and minority groups should be prosecuted, enslaved etc. We saw lots of business leaders approve of China because it suited to their end goal. There was also an implicit acceptance of what was happening in Brazil because Brazil was not doing too badly in business.

Now we have to reconsider as business leaders our position in the world, the long-term reason for being there and also which side we are on. Businesses are embracing politics in the way they're embracing environmental, social and what I call good government. There’s a hugely uplifting change taking place that good leaders are participating in. Bad leaders will just be voted out by the activist shareholder who I think is now becoming the conscience of businesses.

Alan: Picking up on what Martin said, businesses need to recognise the issues that are happening in the countries that they're doing business with, but clearly also need to continue a healthy conversation to build bridges going forward. Farzana, what are your thoughts on this?

Farzana: I think it’s very interesting. If we look at Qatar and the recent World Cup as an example, we saw many organisations and CEOs take a stance to oppose it, for reasons including LGBTQ+ rights, the treatment of women, and the shocking numbers of migrant deaths. It was also revealed in a subsequent investigation that lots of UK local councils had put their extra cash in a Qatar National Bank high interest account, in direct contravention of their declared diversity policies.

One thing for businesses to consider is how much you can genuinely pull out of the global supply chain. With the invasion of Ukraine, a lot of countries were going to pull out of Russia, but then what about your suppliers – are you still dependent upon supply chains that are based in Russia for instance? And what about Russian capital? If your capital is being placed in funds, do you have full transparency on how those funds are being managed?

It’s all incredibly intricate. You’ve got to be extremely careful that where you take these strong positions, you can back it up. If business leaders are going to take a stance, they have to be very aware that the activists and the community are organised, smarter and have better access to information and that they will call you out from a PR and reputation perspective.

You've got to really allocate resource and ensure you're not going to be called out – talk the talk and walk the walk. One of the most valuable resources in a polycrisis world is trust and when trust is gone it will take a long time to rebuild.

Alan: Last year we heard from the Chief Executive of Shell calling for governments to consider increasing corporate tax to help protect the poorest from soaring bills. But is this a good thing – placing social responsibilities on businesses?

Martin: I think it can be a good thing, and the way forward is ‘citizen business partnerships’ – it’s impossible to avoid it.

I do think there's a huge responsibility with energy providers – two hundred billion was the amount they extracted from the markets last year and that had nothing to do with their charter of renewables or their investment in the future. We do need big businesses to step in, but to Farzana’s point, it’s a huge fundamental mistake to invite people to scrutinise your business and then consequently understand that you're not really stepping in in the way that's expected.

Businesses need to think carefully about investment in diversity, investment in improved education, human rights equity in the boardroom, not equality; the notion that we should be making visible what I call the ‘diversities of opportunity’ that sit in the future.

Businesses that are engaging with ‘citizens’ rather than consumers understand that they’re talking to active stakeholders – with an interest and involvement in the future. Gen Z, their sense of activism is doing not speaking; and Gen Alpha will change the nature of the boardroom - working with Web 3.0, thinking about decentralised democratic systems, decentralised management systems and decentralised understandings of how they believe the world should be.

The solutions we need are ones that involve sacrifice, decentralisation and being collegial. It’s having discussions and debates in a way that previously we weren't allowing our teams and businesses of investors to do.

Alan: If we're thinking about what role businesses play in influencing change and the role that they have in speaking with governments, is there an optimal position that they should be taking?

Farzana: It depends on multiple factors but the most important is building trust with ALL stakeholders by being transparent – sharing excitement AND concerns and encouraging working together. Building trust enables the right regulatory framework that allows businesses to flourish, to bring positive gains to society, and without the downside and the hostility and the lack of trust that we have seen because of previous approaches.

Alan: Speaking of collaboration and working together to achieve flourishing results, we have seen how some of the collaborations formed in response to the Covid epidemic and vaccine development have gone on to inform the latest, remarkable work on cancer vaccines. Martin, what do you think there is for business to be hopeful for looking ahead?

Martin: Going back to Covid and the collaborations that happened, the way we collapsed systems, the way we understood open source and the way we started using experts to communicate what was happening to citizen-consumers was quite phenomenal and extraordinary.

Talking to new business leaders under 30, that's how they think business should be run – collaboratively and not competitively. Why do I need to secure a watertight patent or a trade mark while I can do this openly and share it? They want to share the course, share the success and also share the failure. This reminds me of the aviation industry, where all data that's stored in black boxes after a crash or a major accident is shared with all competitors, so everyone can learn and benefit. And get it right.

Fear of change often comes because we’re not seeing the benefits of change, we’re just seeing the challenges and negatives.

We need to reframe this context and a change is required in how we think about innovation and solution. There’s an opportunity to reboot our fascination and awareness of what science means – both the positive and negative: we should feel uncomfortable. Science is not about certainty. The more uncertain we are about the sciences, the better it becomes because we're testing and challenging it. This is where business leaders need to have these debates, we want them to go: “Let's open up the debate – more transparency, more conversation, more doubt please. And then I will get to the right answer.”

Alan: Farzana, are you seeing this idea of shared failure resulting in success in the work you’re doing with your clients?

Farzana: I really do believe it's important for society not to kill the contrarian in order to allow an environment for alternative views to flourish and for us to be psychologically resilient enough to be able to hear alternative views and allow society to grow.

Also, what we’re seeing now is that you don't have to choose between non-profit (kind and inefficient) or profit (unkind and efficient), you can go into the business world and lead with empathy and with kindness. You can make a positive impact to planet and people AND make profit; there don't have to be these trade-offs between kindness and efficiency. And with stakeholder capitalism, we're entering into this purpose led era and that's a massive game changer for our society and for our planet.

All of us can have our own individual positions as lawyers, as PRs, as trend forecasters, as accountants – we can vote with our talent and we can choose companies that are aligned to our values. Every single person is incredibly empowered with visibility over their actions and the impact that we have as individuals.

As long as we have an environment that's conducive to open conversation and conducive to finding compromise and balance, then the future is actually incredibly bright.

Alan: I would like to end with one final question to you both – what do you think will be the biggest game changer for businesses in 2023?

Martin: For me, it will be this focus on health, wellbeing, and wellness generally. Business has gone through a period of corporate illness and is about to go through a period where it must take a more holistic stance. There’s an optimism about the future around the opportunity to make better and build different and that’s now within our grasp.

Wellbeing will become part of the business manifest for the next year but ONLY if business leaders and shareholders and stakeholders understand that they are the ones that have to proactively pursue it.
Picking up on Farzana’s point about kindness and empathy (which sits inside this sense of wellbeing) – this was never previously part of the boardroom debate or conversation and yet for people under 30, kindness and empathy feature hugely in how they converse and communicate.

Wellbeing in a global and corporate sense will become a prime directive of how businesses need to perform. It will become a core pillar not just in terms of health, but in terms of our ability to perform better as leaders and our ability to be agile as stakeholders.

Farzana: I would say building resilience. We often see organisations that get into trouble for various reasons – some seem to bounce back quickly while others are decimated. It’s very important to build relational capital with your stakeholders to build that trust and to do so with vulnerability, so that in your storytelling with your stakeholders, you actually give them the good and the bad.

Nobody trusts an organisation or person that says everything's perfect. If anything, that's just a red flag to journalists to uncover exactly what they're not good at. Lead with the intent of building trust with your stakeholders and by treating people how you would want to be treated.

You’re going to make mistakes. But if you lead with vulnerability and empathy, and you build trust with your stakeholders then you're going to be able to get back up and get back on the horse and keep going.

This is an extract from The Collective Conversations: The Future of the Wider World. You can listen to the full episode here.