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Attention Leaders:
This is how you embrace the green and circular agenda

11. Nov 2021

As a leader, it may seem confusing and abstract to have to deal with how many degrees the planet may rise in temperature, or whether CO₂ quotas are the right political solution to reverse the trend. But one thing is for sure: the climate agenda is an innovation agenda. And as a leader, you can embrace that

Long reads

These days, the great UN climate summit, COP26, is being held in Glasgow. While decision-makers are discussing the long-term global framework conditions for climate action, however, more concrete things are also underway. This autumn, for example, the Realdania foundation starts a new ambitious program focusing on green and circular change in several Danish cities.

Luckily, there’s a lot of green projects going on all over Denmark at the moment. When I highlight this particular effort, which has the apt term “Circular Cities“, it’s because it illustrates a number of principles for managing the green transition, which I think many can learn from. The project is so exemplary that it was a central talking point in a panel debate with The Economist magazine a few weeks ago.

Climate change requires a green and circular transition NOW. And that challenges leaders in at least three ways: 1. The ability to think systemically; 2. the ability to collaborate with brand new partners; and 3. the ability to understand changes in citizen and consumer behavior.

1. The leader must think cross-sectional

Many leaders have achieved success by solving tasks with great efficiency and clear focus. This often means that you are rewarded for wearing blinders. “Focus on the core task,” has been the mantra for the past ten years. There has been nothing wrong with that, but the problem arises when the core task changes and cannot be solved as before.

In Realdania’s Circular Cities project, there is thus a focus on systemic and holistic solutions. This means that as a leader – both in the municipalities and in the companies with which the municipalities collaborate – you have to think much more broadly than usual. You have to look beyond your own office and management, just as you have to look beyond your business model. To enter a truly circular world, where resources are reused and kept in circulation, one will have to look at oneself as part of a larger value-creating system, where the role one plays today may be different tomorrow.

As a leader, you can take the initiative to map – preferably visually with graphic symbols and connections – how the community, your business, municipality, organization, and your value proposition are part of. You can decide to discuss the mapping with colleagues as well as with your main stakeholders. And you can ask yourself questions like: Where do we create real value today? With and for whom? Where should we place ourselves in the future in the light of the green and circular transition? What competencies do we need to bring into play in our organization? What new competencies do we need to add?

2. To play with the unusual and suspicious

People are increasingly talking about the leader’s ability to identify and cooperate with “unusual suspects”. In other words, actors that are not on the radar at all today – for example, startups, voluntary organizations, civil society, or knowledge institutions. The green and circular transition requires not only that you rethink internal processes, for example around energy consumption and waste, but that you ask yourself as a leader how you can build new partnerships that create more and new value. Realdania’s Circular Cities project is partly about helping business leaders see how they can develop new business opportunities based on the needs the city has around the circular economy; and partly it’s about municipal leaders spotting the private companies and other actors in the city and the surrounding area, who have the knowledge, technology, creativity, and innovative power to create the completely new types of circular solutions. As a leader here, one must ask: Who should we talk to who we’ve never talked to before? Where do I find someone who thinks completely differently than us? What can we invite them to bid on? How do we become an attractive partner?

3. Understand the (pre) user of the future

Right now, it feels like we are on the threshold of a whole new phase in the development of the market economy. A phase in which consumers themselves begin to look more holistically at what they buy, use, eat, live in, build, and throw away. As much as 45 percent of our global emissions come from the production of goods and products. We simply only reach the ambitious climate targets if that number is brought down. Consumers continue to focus on price, yes. But questions like “how is this product produced?” and “is this good for the climate?”. “Does my municipality help me make green choices in everyday life?” and “is this a socially responsible company?” take up more and more space. We are already seeing a budding revolt against tech giants who do not treat our data and privacy ethically.

The same rebellion is spreading to companies that do not treat our planet (including humans) responsibly. All the so-called “soft” parameters – which in short constitute the UN’s Sustainable Development Goals – are now some of the toughest when it comes to consumers’ judgments on everything from products to services to investments. The value of a project around circular system solutions must therefore not only be measured on whether a municipality has internally reduced its resource consumption and waste, but also on whether new innovative products and services have been created across more bottom lines than the traditional ones. The manager must also ask: Are we creating long-term value on parameters other than the economic ones? Do we have the right balance between economics, green, and social aspects? Are we releasing more sustainable growth?

Through the unsafe zone

If one thing is certain, it is that leaders who step forward into the green and circular transition will experience uncertainty, ambiguity, and complexity. All in all, something most of us leaders are schooled to control and avoid. Leading thinker Donald Schön wrote very wisely in his book “Beyond the Stable State” that if you want to transform the system, then you must be ready to move through zones of uncertainty. It’s going to challenge a lot of leaders. The good news is that it is precisely through these zones that new thinking and a new value can be redeemed for the benefit of the business and the planet.

While the world’s climate VIPs meet in Glasgow, thousands of leaders at a more local level are struggling to put the transition into practice. With holistic thinking, new partnerships, and deep user understanding, you can better navigate the insecure zones – and do your part to make us realize the change we so badly need.

This article was first published in Danish in the news outlet Mandag Morgen on November 3, 2021.

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