What do we do when the money (and everything else) runs out?

GSB Business of Social and Environmental Innovation conference asks the hard questions about what are the biggest challenges South Africa – and the world – is facing, and how best to tackle these.

South Africans have to realise that the Bold & the Beautiful is not the blueprint for a successful future, says Trevor Manuel, Minister in the Presidency.

“In mimicry (of the TV soap opera), we fail to understand if we all were to live at the level of wealth the planet would implode.”

Speaking at the BSEI (Business of Social and Environmental Innovation) 2013 conference at the UCT Graduate School of Business last week, Manuel said that instead, a radical shake-up in the way the world works is needed to deliver progress on its wicked problems including socio-economic inequality, climate change, the chronic burden of disease, and corporate corruption. This includes moving away from linear thought processes – “last century’s thinking” – towards a systems approach.

“One of biggest challenges that confronts us is that every part of the decision-making that we need to deal with our challenges can’t be done on a linear basis,” said Manuel.

The problem is that the world is locked into a linear framework that is fueled by short-termism, which offers quicker and potentially easier payoffs at lower political cost. Verena Bitzer of the UCT Graduate School of Business and BSEI conference director, said that this is one of the motivations for staging the annual GSB conference. “We seek to bring actors from business, government, academia and society together to create new frameworks for dealing with the world’s challenges. We want to build momentum and create networks, resources and capacity to work together more effectively,” she said.

This is the third year that the BSEI conference has run and Bitzer said that each year it grows in terms of its scope and attendance, attracting top academics and practitioners in the field from around the world.

In setting the tone for this year’s event, Manuel shared findings of a recent report by the Oxford Martin School at the University of Oxford, coming out of a year of research and debate undertaken by a group of eminent leaders on the successes and failures in addressing global challenges over recent decades. He said that the report identified five principles to advance the interests of future generations, which should inform decision-making in the world today, starting with the need for more multi-stakeholder partnerships and the renewal of institutions and processes so that they are more open. Existing institutional incentives should also be rebalanced to reduce bias against future business, for example by changing the focus from the short-term to the long-term by looking beyond quarterly reporting cycles, he said.

“Lack of vision, short-termism, the inability to take forward ideas and the failure to recognize inclusion – sit at epicenter of so much that is wrong with the world today,” said Manuel.

“The rules of the system need to change,” agreed Vanessa Otto-Mentz, head of Strategy at Santam, who followed Manual at the podium to share how the insurance sector in South Africa is shaking things up by turning to innovative forms of collaboration to redefine and manage risk.

“We can’t act alone, we are learning this,” she said. “There is no point rating risk in isolation. It is a shared risk.” In this shared risk model, a conversation about risk becomes a conversation about how to create more resilience in human systems. Otto-Metnz said that the world can’t afford not to do this.

“The insurance industry by itself can’t continue if risks aren’t managed more collaboratively. There is not enough capital in the world,” she said.

Her words echoed those of Winston Churchill who once famously said: “Gentlemen, we have run out of money, now we have to think.” To this, said Manuel, we have to add that we have run out of land, water and oxygen, and our youth have run out of patience. The time to think differently and to innovate is overdue. The real divisions in the future will be between those who innovate and those who do not, he said.

In the South African context there is not shortage of wicked problems that urgently need a new approach. Manuel identified the re-ordering of city space to create more accessibility and opportunity for more people, housing challenges, resource utilisation, youth unemployment and early childhood development as his five front runners.

“It is important to get people talking about the issues that matter,” said Manuel. “If we don’t put these high up on list of priorities of wicked problems we are selling ourselves short. And if we solve them, we will bring a lot more sunshine into the lives of future generations.”

---

Company Office is a subscription-based press office service.