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Yiuwin Tsang
Hello and welcome to this week's episode of the Beautiful Business Podcast brought to you by The Wow Company. I'm your host Yiuwin Tsang, and this week we are joined by Stephen Moffitt. Stephen is a partner at We Are Atmosphere and the idea to have the great shift the four phases of global paradigm shifts. He has been researching transformation and change in both the wider economy and within organisations across all sectors for over 30 years. For his PhD in law, he developed a paradigmatic framework to explain how copyright law was evolving in the face of tectonic technological, economic and social disruptions. The grounded in research, paradigm shifts, adaptability and innovation. His consultancy is always practical. Stephen is focused on helping leaders understand the future and developing the strategies to shape that future. He brings a combination of academic rigour and 25 plus years of commercial experience. He has worked with organisations in the US and Europe, such as a Discovery Channel, Penguin Books, the UK National Health Service and UK Parliament. In addition, he has worked with large private equity and venture capital firms such as sovereign capital and the Canadian pension plan to realise value in their portfolio companies. In this episode, Stephen shares his experience and knowledge around how we can build more adaptable businesses, what the practical steps are that we can take, and how to overcome the fear of change. Let's get stuck in.
Yiuwin Tsang
Stephen, perhaps you could start by giving us a little bit of background on We Are Atmosphere, what is it you do? Or who is it you do it for?
Stephen Moffitt
Well, what Atmosphere is, it's a management consultancy in the true sense of the word is that we help management to understand the present in the future, and develop the appropriate strategies to move through what is obviously a very interesting time, shall we say. So we've this comes out of a lot of the work that we've been doing over the past 20 Some years amongst DOD, in transformation in innovation, in strategic thinking about the future. And all of this kind of came together with the idea that in a period of uncertainty and unpredictability and general confusion, let's say, we need a different set of strategic tools for businesses. And these are tools that aren't next aren't based on the predictability and patterns of the past buttons that are more adaptive, more geared toward being dynamic and responsive to changing environment.
Yiuwin Tsang
And that's quite a shift, isn't it? From the, I suppose a kind of old school, although it doesn't feel like it's always good to see a lot of it, where it's like the thinking is based on predictability, it's based on trends and patterns and trying to kind of get ahead of the curve almost in terms of methodologies in terms of thinking, am I right in thinking that atmosphere is more around developing those skills to deal with the unpredictability, so it's almost kind of throwing to the wind, that things will continue as they are, and these patterns and the cycles will continue to kind of manifest and we have to be ready for change.
Stephen Moffitt
Certainly, we have to be ready for change. And that's the key thing, we are living in change. Now. We're kind of an interesting mix, in that there is a creative aspect, I think you alluded to it, it's in uncertainty, you know, left with essentially a blank or semi blank page, there is a creative element to it. And so that aspect of leadership is E and we'll probably talk about that a bit more later. At the same time, there are patterns, there are models and frameworks that identify that, say, bigger processes that are going on, and those you can know and that takes away that sense of just complete and utter chaos, but doesn't give us it isn't the same kind of predictability that we're used to, which is you know, we know over the last five years, we've done a quarter on quarter growth of X percent. If we tweak we bring in a couple more salespeople will get x plus 2%, or whatever it is.
Yiuwin Tsang
I see when you talk about unpredictability and living in a period of change. From your perspective, Stephen, what are these big changes? And do you feel like we're entering a paradigm shift?
Stephen Moffitt
Definitely. In fact, what I talk about is what I call the great shift. And so this is a paradigm shift or a shift in our entire culture. And I think we can see this because we have new technologies, we have the myriad impacts of climate, we have, you know, the economy is going through its various trends and patterns, you have geopolitical pressures. All of these things binding together, are opening up a lot of questions in that kind of crisis of, you know, in all aspects, some more pronounced than others. But yes, I would say we are going through a major as a society as a civilization, maybe even a large scale shift. And where it will end up in the future is, you know, going to be very different from where it is now,
Yiuwin Tsang
I'm gonna just look back at things like the pandemic, and you know, the massive change and shift and the impact that these kinds of events have had on businesses and as they say, on wider economy or society itself. But if we will, kind of just to unpack some of those impacts. Stephen, you mentioned technology as one of the first things. I remember going to a talk a long time ago, and the speakers spoke about the impact that the Industrial Revolution had on productivity on GDP. And it was like whoosh, like the graph that plus a kind of hockey stick kind of growth in terms of the productivity of the populations. And then he started talking about this new age, this technology driven age. And then he alluded to this has gone back maybe five or six years ago, seven, he talks about the network revolution, rather than Industrial Revolution. And this is where, you know, technology and power networks. So looking at things like Facebook and Twitter and things like this, where the power is in the number of participants in the complexity, it's in the speed of transmission of information. And that always sticks in my mind in the sense that what technology has enabled is like incredibly rapid distribution of information, and disinformation as well at the same time. So I guess it's quite pronounced in terms of technology space, the impact it has had, but in terms of, you know, some of these other impacts that you mentioned, around economies and geopolitical again, I had the conversation with another one other context it literally yesterday. And he said, It's been a funny year. And his prediction was that the pickup of his marketplace will be dependent on what's happening over in the US for the rates to start going back up again. But then we would only feel the effect of that, or he would only feel the effect of that probably two to three months lag of actually going up. So he's predicting, you know, six months for his business to pick up again, based on what's happening on the other side of the ocean. So you know, as you say, that effect is profound.
Stephen Moffitt
It's interesting, because the other day, I was doing a workshop around this with a trade body in the financial services sector. And as part of our activities, we do a bit of kind of blue sky thinking scenarios. And one of the things that came out, that was particularly I think, interesting was, they were talking about the impact of climate change, and the obvious things, you know, if you're in the financial services, and there's more flooding, there's more extreme weather events, insurance, mortgages, all these kinds of things are affected. But one of the things that they pointed out, which was kind of farther out in their horizon, but still, I think, profoundly important was, you know, one of them said, Oh, well, what about migration? And so you think about in a world where the South and the equatorial zones are heating up, there's mass migration? And what impact does that have on Europe, on Britain, on the US, China, wherever it is, you know, as people are moving to try to find places that are not boiling, eventually, or, you know, in severe crisis? And so this is part of what if we're talking about, you know, adaptive businesses, talking about future leaders and things like that, these are the kinds of things that we encourage leaders to think about, you know, and it's hard because by nature, and by the way that business is constructed, if you're thinking beyond this financial year, you're already a big thinker right from for the most part. Everybody's breathing down your throat, you know, am I going to get my yearly bonus am I going to get my you know, we're going to hit our quarterly targets, etc. But this kind of environment requires a broader and a longer vision in order to be able to see some of these things and to have the time to put in place what's needed.
Yiuwin Tsang
It's quite an interesting variation, I suppose on that kind of longer term vision piece, Stephen because we speak a lot about planning and having you know, your like three year plan, even a five year plan, 10 year plan and having that kind of longer term. envision, which is almost like an ideal vision, I suppose, isn't it, it's like, if all things go the way that we want them to go, we will be this big in these markets doing this thing. And I'll be on a boat, sit in, you know, beers. And what I'm hearing here is that we kind of that will always be important. I don't think anybody's denying that vision piece is always going to be important in terms of, you know, planning KPIs and things like this. But it sounds like the prudent or the sensible thing to do is to almost kind of expand that vision and think about what are the potential impacts that we might experience on the journey towards that vision? What could take us off course? And what do we do about it? And is it correctable? I guess that's a big thing, isn't it? I guess, you know, when you talk about your example of the insurance companies, and the impact that climate change has for them, is that it could result in them having to change course of their vision, that vision that they had the 10 year vision, it might not be achievable if some of these scenarios play out, I'm assuming is I mean, would that be the cases?
Stephen Moffitt
And I think insurance is a very obvious one, I think. But I think you know, a lot of industries will face that, you know, in insurance, if you think about just the impact of the climate will leave aside artificial intelligence and technology and all these others. But just in the climate alone, you could quickly see a scenario where it's impossible to get insurance because the cost of paying out premium, you know, paying out on claims, because of extreme weather situations, is too high for the premiums that you can charge. And you already see that in places like Florida and the US, you know, certain places, here in Europe, I think also where the risk is too great for what the market, ie the customers can bear. And so you're having to develop a new model, you know, essentially government reinsurance to support that. And that's a profound shift. And if you're not looking ahead, if you're not thinking about these things in a wider context, thinking about them outside of my immediate concerns of this quarter or this year, then when those things hit, you won't have been able to put in place, maybe the innovation space or the flexibility in the business, you won't be able to pivot in a way that you need to. Also you wouldn't have the necessarily be able to do I mean, you could do things like put yourself in a position to advocate for, let's say, flood read here in the UK, or various other sorts of supports. But you have to have that larger vision in order to be able to figure out what your strategic priorities need to be.
Yiuwin Tsang
So just popped into my head, Stephen to kind of move it away from the insurance example, there's a friend of mine that works for a technology company, it's to do with online advertising effectively. And it's a technology for major owners to better monetize their inventory. So the context is that lots of people use ad blockers, so they don't see the ads. But there's still a energy expense through blocking an ad. So if we're on the Guardian newspaper website, or whatever it might be, if I've got the ad blocker on, my browser will still call for the ad from the server will still call for the data to display the ad, but it gets blocked on my side, it doesn't get blocked on the call side or on the service side. So there's still an energy expenditure. So what's happening is, is with the prevalence of ad blockers, is there's a huge amount of energy being used on serving ads that aren't even arriving to the target markets. So this company that my friend works for effectively, looking at how we can raise awareness of this or how they can raise awareness of the Senate use and educate publishers educating users on why they need to use more relevant ads, or whatever that kind of technology is it serves with adverts, but that business was kind of predicated on, I suppose the vision of the founders to see that there will come a point when people would just turn the ads off, you know, and get your 510 years ago, that would have been a ridiculous thought, you know, the money that was going through online advertising on display advertising was bonkers was you know, hundreds of millions, if not more spent every year. So I guess that's an example of businesses looking at what could happen, what could happen further down the line. And the other example, I guess, could be, you know, in a digital sense people's use of the vices of social media. There's already we've seen the backlash on Twitter in terms of you know, something happening, which has been damaging to the reputation of that particular platform and then people leaving the platform and it's like a house of cards have been falling down. You know what happens if people's privacy concerns, you know, kind of peak and they don't want to use their devices anymore, or they go back to using dumb phones rather than the smartphones. Sounds unlikely now, but then you think I guess, you know, there are people's concerns, and there are these kind of movements towards almost a detoxing on a digital show, all the things that are moving is just the sort of kind of thinking that leaders need to make in order to be adaptable.
Stephen Moffitt
Absolutely and so my other hat is, I'm a science fiction writer. So I really encourage people to play science fiction in part of what we do in our work with our clients is that we do a variant of scenario play. And part of that is to imagine just exactly what you described. So let's say that they're the future where the backlash against data and is that there is extreme focus on privacy and personal control of data. That obviously breaks a lot of business models, you know, so let's play this scenario, you're an advertiser, or you spell your marketer or whatever it is, you're, you know, a major conglomerate that needs to advertise, how do you deal in that sort of environment, start to think about those kinds of things. And in offence, almost imagine what you would be able to do, you know, in that world, and that starts to build in, I think, a couple of things for leaders in companies, one, it starts to build back, a kind of entrepreneurial, let's do what needs to be done mentality, which in larger companies is harder just because of that they've grown and they've got to develop processes, and that starts to solidify them. So it's bringing that kind of creativity back that kind of innovation and entrepreneurial back in at the same time. What it's doing is it does actually have a kind of a risk mitigation sort of role, which says, Is this a possibility? And so kind of going back to your friend's company, as an advertiser, I might look at, you know, The Guardian, for example, I might look at that company and go Well, okay, that makes sense, you know, maybe we need to partner with them or acquire them. Or we could put ourselves in the forefront of this, you know, if it's tied to the ethos, and I think maybe the Guardian here in the UK is a good example of a company whose ethos would allow that, as opposed to say, The Wall Street Journal.
Yiuwin Tsang
So having these kinds of sessions, there's a couple of things pop into my head. And number one, what are the practical steps that the businesses and leaders can do to try and I guess, prepare themselves for this sort of thing and have the kind of like, I suppose, these meaningful, practical sessions by the sounds of it, you know, time that they put aside in order to think about these scenarios in order to become more adaptive as a business. And then the second part of that question, Stephen, is what are the characteristics that you see in an adaptable business? Okay,
Stephen Moffitt
Well, I think they're actually very closely related. So an adaptive business is aware of the world around and not just its market, but the wider world. So as part of the businesses, activities, there is that sense of horizon scanning of interacting of connecting, which then requires a prioritisation, right. And so part of what the business needs to do as a starting point is to acknowledge this situation and acknowledge the criticality looking wider of you know, quote, thinking outside the box of doing some imagining emergent futures, those kinds of things. And not have it be a one off exercise, but a integral part of the strategic process of the business. So that's kind of a year back. And so on a practical level, the way that we tend to work with businesses that sit down with the leadership team in the beginning, and we do kind of emerging futures sessions. So in the great shift that I mentioned earlier, one of the early phase which we're in is there's an awareness of the problem and then there's a lot of experimentation to try to find an answer. So This is the multiverse if you like, so we'll bring in, you know, that concept. There's a lot of possible futures out there from the extreme pure individual capitalism to eco communitarian is too authoritarian, whatever. So there's a lot of different possibilities coming out. The we do a variant of Sinara rowing, where we just allow the creative juices to flow and say, Okay, let's imagine a scenario where privacy is paramount. And global warming is to a point where it's prohibitive to do kind of large language models or something, you know, I pick, it doesn't particularly matter, but you imagine that future and then you say, okay, as a business, how would I operate there? You do that a few times? What happens then when you step back, because you start to see some commonalities across all of these futures. And that kind of starts with that the process of well, if any future we can imagine, we need to be more innovative. Okay, so that becomes a strategic priority and we can start to work on.
Yiuwin Tsang
That's interesting. So it's almost kind of like, as you say, the outcome or that scenario in itself isn't the important thing. It's more the process that you go through, and the thinking, and the commonalities of how you deal with those scenarios. Is the output that you're looking for when you run these sessions. Right. Did I read that?
Stephen Moffitt
Sure. It's a change of thinking, I think, is really what it is. And so, you know, we've done these sessions. And it's sparked some interesting conversations. We've been one recently where it was a joint exercise between the board and the senior leadership team. And what was probably the most valuable thing out of all of it was a long detour that they took amongst themselves between the board and the senior leadership team about a particular scenario and its implications. And kind of what came out of that was that this was the first time that the board and the leadership team had been able to take a step back and talk about, you know, the strategic long term future of the business. And out of that emerges a whole series of things about, you know, what is the vision for the organisation, what is its direction, these kinds of conversations, as you know, when you were trying to run a company, and you've got the day to day pressures, you've got your quarterly pressures, you don't have that space, but you have to prioritise that now. And that's really the big step is making this kind of strategic thinking, II priority for your leadership team.
Yiuwin Tsang
So we've run a session on that long ago with Peter Czapp from The Wow Company, and he covered Franklin Covey is four disciplines of execution. And one of the big parts of that is the wildly important goals and having real clarity on what the goal is communicated and articulated with the rest of the team so that they know what the wildly important goals of the organisation are. And it was surprising even in that one session alone, the number of people that like, if we don't do that, we don't have that. And then when you hear like this story that you just said, the session that you ran, it sounds like there was a must have been a sizable organisation to have a board and the senior leadership team that this hadn't come out yet. It sounds like there wasn't alignment, in terms of what the vision what the direction of travel, they probably all had their own kind of interpretations of it. And then the dialogue that follow kind of, I suppose, kind of highlighted that there was more to be aligned upon.
Stephen Moffitt
I think this is natural, and is that we all assume that everybody thinks like, you know, that's kind of our default setting, right? And so we can function to some level, Okay, with that assumption. However, in a situation that we're in, where there's these challenges, where there's this unpredictability, those implicit assumptions need to be made explicit. And as you were saying, the communication is key. And I think, you know, this is really a big eat, that comes out of what we deal with that communication and communicating and myself, first of all, as a senior leader, and then how do I communicate to my fellow leadership team, to the business to my customers, to my investors, stakeholders, etc.
Yiuwin Tsang
Yeah. And I suppose one question I've got here is around an inherent fear of change that we all have. And one of my favourite kind of things is that people are more comfortable with old problems and the old with new solutions. So there's always this in Heron kind of fear of change, how can organisations kind of better deal with this fear? Because I think, again, perhaps you could shed a little bit light with the sessions that you run and run the scenario planning session. Is there. scepticism? Are there sceptics in the room where you've got people that perhaps are like, wow, that's never gonna happen, or, you know, that's like to whenever we go into a sales situation, and we broadly categorise people in the decision making process as supporters who are on board and want to come through, we've got neutrals, you've got detractors, and you kind of deal with those three personality or those kinds of three types, if you'd like, as part of your strategy with the sessions, if we've got listeners who think actually, you know, we should win one of these kinds of scenarios sessions, what do you do to try and deal with it as opposed to the sceptics? Imagine that that scepticism comes from a place of almost like denial, and whether or not they come to a place of fear? I don't know. But how would you deal with that?
Stephen Moffitt
Well, I think you start with recognising exactly what you said is that, generally, we are creatures of comfort, right? So our brains are wired to stay with the familiar to stay with the known because it makes me feel great. And like you said, even if that situation isn't ideal, at least I know what it is, you know, and this psychology had its core, right. So, you know, the first thing is to acknowledge that the second is that, unfortunately, and I've been doing this kind of stuff for a long time. Now, it really takes some kind of crisis, or some incredible visionary, it requires a certain amount of energy to break that inertia, right. And so, most of the time, when we've been involved with companies, there is some sense of either crisis, in the sense that the business, or the sector is in turmoil, and they need some help. And they're willing to then at least entertain the idea of it, whether they do it or not, it's a different matter, but at least entertain the idea. The other is that when you get leaders who have a vision of the future, maybe already intuit that, you know, this is this opportunity. And through force of their personality, they can draw the waters. And in general, I think the more kind of entrepreneurial the culture is, the easier it is, in a sense to accept the idea of change, because that's the nature of being entrepreneurial. That being said, I think the way that we deal with those three types is acknowledged the validity of all the positions, and in many sessions will start to talk about these emerging futures and start to do this kind of work and talk about this great shift is a decade's long process, and people go out, you know, that's not today's problem, you know, right. And that's fine. It's true, you know, the collapse of the capitalist economic system isn't going to happen tomorrow, I think, you know, it could eventually happen at some point down the road. And you can see how that might be happening. However, the exercise of imagining this thing is, as we were saying earlier, valuable, because what it does is it unlocks creativity, it unlocks new avenues of thinking it opens up these conversations. And so part of it is just Okay, fine. Let's, you know, we all agree that this isn't a fairly today's problem. But let's imagine it anyway. Because, you know, let's see what comes out of it. And that's why we tend to focus on you know, these kind of multiple scenarios, and then work backwards from there, almost, you know, kind of back casting, if you like to. So what does that mean today, the implicit part of it, and then the implicit part of it is that, what it means today is that we have to be more creative, we have to communicate better, we have to be more explicit about what it is that we're doing.
Yiuwin Tsang
But just to wrap this part up, when we first kind of spoke, we talked about, you know, lots of businesses that are out there that are just getting through, you know, it's not focused on the here and now. And we spoke about how that can't be the default when it comes to change. And when it comes to dealing with change, can you tell us why that is why just getting through isn't gonna get us where we need to get to?
Stephen Moffitt
Well, so there's two reasons for that. One is let's say a little bit longer term, which is that what we are going through is not something that will end anytime soon. Okay. So part of the just getting through and we saw that a lot with COVID I think is a classic example. People were like, okay, when can we get back to normal? Right? You know, this locked down thing is an anomaly. It's an aberration, and then you know, it'll and pandemics and we'll all get back to doing what we've done. Well, the reality was that it didn't happen, you know, we're not where we were in 2018 2019. So I think you know, that realisation is important. So, unless you can hunker down and just try to do this for decades, you might want to then think about, you know, what you can do, how you can respond to that. And the other aspect is that, if you hunker down and are just getting through, there's going to be other people around you who aren't, then you're at a disadvantage. Maybe short term, you'll be okay. You can think of, you know, Blockbuster, for example, you know, as a classic, you know, Kodak, you name it, they were able to maintain themselves over a period of time doing what they did, even though the writing was clearly on wall. And so I think that's the ultimate kind of like, you can do this but only for a very short period of time.
Yiuwin Tsang
A big thank you to Steven Moffitt from We Are Atmosphere for sharing his knowledge and a big thank you to you, our listeners for listening to this week's Beautiful Business podcast. Beautiful Business is powered by The Wow Company who believes having a clear purpose and standing up for what you believe in is the secret to building a beautiful, sustainable business.