Do ‘paradox industries’ actually need a resolution?
Why companies are focusing on an integrated approach to sustainable growth
By Shell on Sep 02, 2021
Former French President Charles De Gaulle once observed that, faced with crisis, the man of character falls back on himself – imposing his own stamp of action, taking responsibility for it, and making it his own. He cannot have known how these words – suited more for times of war than peace – would still ring true more than 40 years after his death as the world comes to terms with a global pandemic.
During this unprecedented crisis, organisations around the world have had to demonstrate their character. They have had to act swiftly and decisively. And they have had to take responsibility for their impact on their communities, at a local and a global level.
Beyond this, the people leading these organisations have had to learn from their response to the pandemic. Thrust into a high velocity environment, they have been forced to make decisions at speed that will have a significant impact on their business, their stakeholders, and their workforce for years to come.
Our latest research, presented in the ‘Under Pressure: Leading in Paradox Industries’ report, explores this journey – investigating the concept of Hight Velocity Leadership and the impact it has had on organisations during the pandemic. Conducted in partnership with Dr Chris Brauer, Director of Innovation at Goldsmiths, University of London and one of the 35 global industrial strategy officers with the World Economic Forum, it also offers a detailed model of the behaviours shown by high velocity leaders, and the lessons organisations can learn as they emerge from the crisis.
Within this, the report highlights the importance of effective leadership in what Dr Brauer refers to as ‘paradox industries’ as they look to address the next big challenges around digital transformation and decarbonisation.
Has the paradox already been resolved?
For Dr Brauer, the thing that leaps out from the research connects directly to the concept of paradox industries.
“We went into this study looking to tackle a challenge that is top – or near the top – of the priority list for leaders in these industries,” he says. “It focused on finding ways to ‘resolve the tensions’ implicitly generated by the paradoxes. We wanted to see how leaders handled competing pressures. How to create more energy, but less carbon. Balancing purpose with profit; sustainability with growth; automation with jobs.”
However, the research revealed that leading organisations are dealing with the paradox by changing the frame of reference and the way the approach the challenge. And they have done it without the conflict that might be expected from pursuing what appear to be divergent goals.
“Instead of focusing on ways to resolve the tensions, leaders are showing us a different way forward,” explains Dr Brauer. “And that is to develop integrated strategies and organisational cultures that unify the pursuit of these separate but symbiotic ideas.”
“So, these are not paradoxes in the classic sense of seeking resolution to seemingly contradictory ambitions. Instead, this is about taking grown-up and innovative approaches to dualism,” he continues. “Just as organisations need to be working on the next s-curve while they play out the current one, so too must they work to achieve sustainable growth, carbon-neutral energy, and purposeful profitability simultaneously.”
These findings are supported by the survey of leaders within the report. This found that nearly half of business leaders increased their investments into digital transformation during the pandemic. At the same time, 41% also say that their budgets around decarbonisation and sustainability increased.
A ‘full-impact’ approach to integration
The sentiment Dr Brauer outlines above is echoed strongly in the discussions that formed the basis for the leaders’ origin stories featured in the report. For example, Laura Brooks, Group Head of Sustainability Integration & Impact for Anglo American, highlights how their company takes a ‘full-impact’ approach to decision-making across its mining operations.
“It’s fascinating how their full-impact assessment process integrates those elements of tension,” says Dr Brauer. “So, when they automate their drilling equipment, it doesn’t just trigger unintended consequence of job losses. Rather, they are proactive and wherever possible workforces are reskilled and deployed in advance or alongside the introduction of new technologies. It is about integrated assessment on social, sustainability, workforce, environmental factors and impact. And this drives efficiency and productivity for the operation, technologies and people.”
Another interesting area that this full-impact view of a business touches upon is the impact throughout the value chain of the products created by industries such as mining.
“Laura talked to us about the story behind copper and its value to society, from its role in renewable energy to internet connectivity,” says Dr Brauer. “She believes that it’s a story that needs to be told because there’s an opportunity to create a more sustainable world through the products they produce. She also feels that there doesn’t need to be a paradox between growth and decarbonisation –they can both contribute to sustainability.”
Increasing safety at higher speeds
During these discussions, Dr Brauer also spoke to Audrey Tang, Digital Minister of Taiwan, about their experiences of tackling the pandemic and constructing social configurations that can overcome these apparent paradoxes.
“At the heart of their philosophy to tackling the pandemic in Taiwan is another paradox-like polarity of 'increasing speed while reducing risk' in everything they do,” says Dr Brauer. “And Audrey gave us the ideal metaphor for this, reflecting on their experiences of Germany’s Autobahn system to talk about how we can increase safety while driving at higher and higher speeds.”
This highlights the thinking behind what organisations need to take away from their experiences of high velocity conditions during the pandemic. In Audrey’s case, leaders were presented with an opportunity to remove the speed limits on innovation, but everything had to feed into increasing – not decreasing – health and safety for the public. If leaders aren’t comfortable driving forward at high speeds with low risk, they can lead by following innovators in their ecosystems, harnessing the power of the collective through what Audrey calls ‘people-public-private’ partnerships as they look to develop integrated solutions to their most pressing problems. For Audrey, it’s about integrating government, industry and civic innovation and learning from the experiences of others, from local to global.
“Referring to a new worldwide urgency created by the pandemic, Audrey points to how we’ve all become time-zone travellers as part of a worldwide community,” says Dr Brauer. “They also compare our progression through this high velocity situation to a software release cycle, describing how the other major challenges organisations face into the near future have the same configuration as the pandemic. It all highlights the need for organisations to work with a larger global neighbourhood to create integrated solutions.”
Learning the lessons of high velocity situations
For many companies, the pandemic has accelerated their efforts to resolve the paradoxical tensions in their industry. This is certainly the case for global energy and power leader Enel Group. Talking to Carlo Albini, Enel Group’s Head of People and Organization Innovability, revealed how the company was already seeking to find integrated pathways for combining innovation and sustainability; starting with the creation of Carlo’s new role – designed to bring together leadership of integrated sustainability and innovation goals in one place.
“It was interesting to hear from Carlo about how Enel Group was making sure it could build on the lessons it learned during the pandemic – or, as he put it, design the future,” says Dr Brauer. “Within this, he spoke of augmenting the actions the company was already taking naturally, sometimes without being aware of it. For him, it was important to take a retrospective look at the organisation’s performance during this high velocity situation and improve upon the positive aspects.”
It is yet another example of how companies are not looking to ‘resolve’ competing priorities and are, instead, exploring ways to achieve the separate goals as shared and integrated ambitions.
“Carlo effectively said that, if they are smart enough as an organisation, they can do everything – from tackling climate change to achieving gender equality” says Dr Brauer. “Leaders recognise the need to learn from the current high velocity situation, as well as the opportunities they have to take those lessons into tackling their next big challenge in an integrated way.”
A recipe for tackling the next big challenge
The next step for organisations will be to demonstrate how their integrated approaches lead to them achieving the parallel goals of growth and sustainability. For leaders, this means identifying the elements that have been critical to their pandemic response and building on these foundations.
‘Under Pressure: Leading in Paradox Industries’ explores this in detail with the High Velocity Leadership model. Laying out a blueprint for leaders to follow, it helps them to better understand their performance and how they can prepare for their next big challenge.
“During the study, we identified a set of leadership drivers that have played a critical role in every company’s pandemic response,” says Dr Brauer. “These provide a kind of recipe for leaders who are capable of designing, implementing and measuring integrated impact plans that don't so much 'resolve the paradoxes' but come at the challenges from an entirely different perspective – fuelled by their collective exposure to the high velocity conditions of the crisis.”
Ultimately, this means that leaders around the world, still raw from the experience of the crisis, are shifting their focus. The question for every organisation now is: how can they move effectively from paradox resolution to delivering sustainable growth?
