Ep8: Roger Dennis 'The Price of Resilience'

Transcript

My guest on 'Cleaning Up' today joins us from New Zealand. His name is Roger Dennis. He doesn't like to be called a futurist. But his website says that he consults on the continuum between future thinking strategy and innovation to introduce opportunities to organizations to create advantage, in other words, he's a futurist. But he's not a futurist in a sense of jetpacks and eternal life. He's a futurist in terms of working with very serious organizations to help them to prepare for some of the shocks that might be in their path. So he's worked with organizations like Shell, the Singapore Prime Minister's Office, Fonterra, which is New Zealand's big dairy cooperative, and Z Energy, the fuel retailer in New Zealand. And I actually met Roger because he brought me down to New Zealand to talk to Z Energy and others about the transition to new clean energy, which of course, for a company like Z Energy could be one of those shocks in their path. So without further ado, I'm going to get myself my beer. It is I'm a bit nervous about this, because it is seven o'clock in the morning in New Zealand, and I'm hoping Roger will not be drinking, otherwise, I'd be worried about him. But I'm going to get myself a beer because it's the end of the day here in the UK. And we'll bring Roger into the conversation.

Roger, welcome to 'Cleaning Up'. It is seven o'clock in the morning in New Zealand. Whereabouts are you?

I'm actually at home. So another part of the house, the family is scurrying around, and the kids about to get off to school. I will get a stiff coffee, I think very shortly and then press on with the day.

Very good. Could we start perhaps by, you explaining to all of us, to me and to the audience, what exactly is it that you do? And not so much what it is because in my intro I said, you don't wanna call it futurism. But that's what you do. But tell us how you work with corporates? What is it you do for them or other organizations?

Yeah, so distilling it down into a very short pithy statement has taken me almost two decades. So effectively, it comes down to help the organizations understand where the world is going. What does it mean for the sector? And then what are the right strategic questions they should be asking?

Okay, and these are presumably things that they haven't themselves either thought about or planned for? Because otherwise they wouldn't need you.

Exactly. So typically, what happens is, organizations of a certain size, do strategy work, sometimes good, sometimes mediocre, and then they sort of dovetailed, some innovation work, but they don't go third up the chain. They don't say, you know, what might happen to the world in the next 3 - 5 - 10 years? How is it going to impact our strategy? And what I do is, to talk to them about how to create really good strategic thinking, that actually takes into account some of the things that might happen in the world. And those macro scale changes.

Do you do this within their areas of specialization? Or do you... Are you responsible for the sort of the stuff that might be exogenous to their area of competence? Because they know their business better than you ever could? Right?

Absolutely. I don't tend to get involved too much in that part of the spectrum. And as you point out, I go way further up the chain, because organizations tend to know their own business well, they have their own way of doing strategy. There's so many different ways in which you can cut that pie. But typically, organizations don't look further out than their own business. And that can really cause them problems. Case in point right now.

Well, of course, we're going to be talking about the COVID pandemic and also climate change, which are exogenous to businesses and very threatening to their smooth operation of their normal business planning, I suspect. What qualifies you to go into a company and say: 'okay, hold the presses, stop doing what you're doing, you need to take a day, or a half day, the whole management team or you need to go through a whole exercise'. 'You need to listen to me', because what, are you some kind of, you know, visionary genius, or is it the experience you have? What is it that qualifies you to do that?

I can hold a crystal ball in both hands. <laugh> Typically, what it comes down to is a couple of things. First of all, a lot of experience in this field; second, sort of training your mind to do pattern recognition, and by pattern recognition, what I mean is, so what happens if that triggers, this means that creates that. And often what you find inside strategy teams is they only might do the last two links of the chain. If this changes, we do that. So actually having a very wide range of inputs of people to talk to around the world of experience with some very, very large organizations that did this extremely well. And so when you combine those all together. Typically I think, a lot of organization or leaders I talked to, see that it was very valuable for their organization.

I said, as you were speaking, I was just put in mind with Episode three of 'Cleaning Up', which was with a chap called Antony Slumbers, he's a real guru on real estate and property technology. And I've asked him the same question, you know, have you... How come you get to be so smart? And he said: well, I've just got more time to read everything, I've got more inputs, and it's a great privilege to be able to sort of mash up more stuff. And then I have insights, the result. And that's certainly kind of how I feel a little bit in the in the energy transition space that I probably do just have more time to read more stuff. Do you think in your case, it's also to do with your sort of early career experiences? Did you just not just read more stuff? But did you do more stuff? Because you, you got involved in a challenger at early internet bank, you traveled the world, you lived in three different continents? Is that a big part of it you think?

Oh, absolutely. And, you know, in my early career, I got really frustrated working inside innovation teams in large organizations where the innovation seemed to be devoid of any strategy. And the strategy seemed to be devoid of any understanding where the world was going. And so I started working my way up the <inaudible> and really trying to get organizations ahead of where they should be. And you're right, there's a whole combination of things, not least of which is having the luxury of time to think, because in many organizations it's just react, react, react and hit the KPI.

Okay, so but that's one piece of it, which is that you have all these experiences, and you have a way of looking at the world, and you have time to sort of be eclectic in your inputs. But how do you go about effecting the change in the organization? Because of course, you know, you could be Pandora and you could say 'oh, there's a pandemic coming', and then nobody listens to you. That's not very useful. So how do you work with an organization to get them to actually take this stuff seriously?

Yeah, that's a really important point, because you can't simply deliver the briefing on a form, black and white. Or, if I'm working with really good teams, and good chief execs, what I've done is bring it to life in a field called 'exponential futures'. So how do you create an experience that really highlights some of the key points from your research and analysis, and bring them to life in such a way that resonates deeply with people. And so, you know, in that regard, I've taken over 10,000 square foot, warehouses and created sort of exhibitions, sort of corporate roadshow type events, where teams have come through from organizations, and we've brought the future to life in a very specific way to tell a story. And at the end of that, what I've seen is that, you know, a decade later, members of that leadership team will come to me and say, I'll never forget the time we did or I always remember when we did x. And when you bring it to life in that way it really resonates with people in quite a different way to if you gave them the black and white bit of paper so there's t<inaudible> and really depends on how much license Chief Exec has in a organization to make that happen. But that's really key.

Well, I think that's a key question. You can't do that working with, you know, just the sales team, you've got to go in at a C-suite. You've got to have the CEO's attention, really, don't you?

Absolutely. And I've found that unless the chief exec is absolutely bought into this process, then you get no traction. You know, I've tried working with second and third tier teams and pushing things up through the ranks and very rarely, it's hitting impact. There's only one occasion in recent times, where a third tier team in a very large global organization came to me and said: we want you to look at this and do a little piece on this. I spend a few days and said why are you looking at that, I said what's left, I said: I'll give you a little pricey on that. And pricey rapidly made it all the way to board level. And then within a day, with the most watertight NDA I've ever signed, was basically concrete shoes if you talk about this, and it has significantly impacted the direction of a multi billion dollar global business, and because they were looking at the wrong thing

These questions of openness to challenge Oh, because this is what it's about. It's about saying whether your assumption is the world is broadly the same. Here's the strategy, and then being open to somebody saying: no, no, no, you're making a fundamental... you're missing this bigger thing. Companies and organizations' openness to that sort of thinking... My experience, my guess is very much comes down from that, you know, people take their cue about their openness from senior executives, from the leader.

Yes, absolutely. Can also come from the board. But generally, it has to come from a chief exec. And generally a chief exec plus one other person on the exec team to give them some sort of support and backing. Now, people look at chief execs and think they've got all the license in the world, but it's a very lonely position. And unless you have got some sort of team support, it can be very hard pushing through even your best ideas.

Yes, and I'm sure there are examples where the chief exec says: this is fantastic, you've got to all listen to Roger. And they will sit there with their arms crossed going, 'this is a complete waste of my time, I'd much rather be talking to clients or or fixing that problem in the factory' or whatever, have you had that?

I had one of those, actually, in early March was a client of mine, where I rang up the chief exec, and already given a heads up in January about pandemic, and he spun up a crisis management team in early January. And then in early March...

COVID-19 crisis

Yeah. And then would have been early March, I got in touch with them and said: you know, this is really spinning out of control, we really need to sit down with ten of your people and spend an entire day on this. And so, you know, we've got a high degree of trust to work with them for a long time, he said 'yes'. So 10 people duly appeared in this room, basically sat there like this, you know, start of the day, I could see what's going on in their minds. And then within about an hour, all across dams have gone, all leaning forward. At the end of the day one came up to me and said: but to be honest, Roger, you know, when we were told to come to this guy, I just thought 'what the hell am I taking an entire chunk out of my schedule for? What it's about?'. And then she said: right now I'm thinking, why isn't the whole world taking chunks out of their days to understand where this is going? And then they all briefed the chief exec. And within about two minutes, he went: oh, my God, this is way bigger than the GFC.

Great financial crisis?

Yes, yeah, that's one example where it's very rare for me to have, you know, a chief exec, tell his team, direct them to come and talk to Roger. Normally, I like to work on a process sort of winning hearts and minds. It's far more effective.

Now, you and I met, because you organized for me to be invited. It was my first ever trip down to New Zealand, at the invitation of Mike Bennetts of Z Energy, and Z Energy makes very good money by distributing and selling fossil fuels. That's all the forecourt, or half of the fourecourt in New Zealand. And yet, you've got this extraordinary CEO, Mike, who really doesn't have to worry about climate change or transitions, because he's, you know, he is doing very nicely. How can I put this this is not his first rodeo? So most of the changes that I talked about are not going to happen on his watch. And yet, he... did he bring you in? Or did you... just talk us through it because that is sort of a slightly different engagement where you brought in an external expert, me in that case?

Yes. And at that stage I have been working alongside Z almost since the day they were formed when they bought Shell's downstream business. And they're a great example of a really forward thinking organization, that understands they are in a sunset business and need to change, and that by burying their head in the sand or simply trying to extract as much from the pump as possible isn't a viable option. Financially, morally or ethically. And I really <inaudible> the leadership team. And you know, most of the team at Z that I've worked with before, for the way in which they think about not only their future, but the planet's future. And so, you know, when I suggested that we bring you down from Europe to talk about this stuff and give a really good first hand expert insight, there wasn't much resistance to that at all.

And it was a great experience for me. And I was astonished at how engaged that whole leadership team was, I didn't get anybody with folded arms saying: I don't know why, why are we listening to this clean energy guy. But so that was, you know... whatever you've been doing, it had worked very well. But now you, you travelled around, just go back to this sort of early experiences that in your career, you traveled around, you worked in the UK, you worked in Hong Kong, worked in... was it Sydney or Melbourne? And then, there came a point where you said: I want to go back to the quiet life somewhere really safe, where basically nothing ever happens, is that right? And then you chose Christchurch? Is that the process?

Yeah, essentially. So we were living in London. And we said, we don't want to raise children who don't have the same experiences that we did growing up. So you know, heading into the outdoors. So in New Zealand there's really nothing in the wild that will kill you, apart from stupidity. So, you know, the ability to just go wandering off and not worry about snakes, or spiders, or large mammals with sharp teeth is very appealing. So we came back. And we chose to live in Christchurch, because Christchurch is a fabulous city. So at the moment for example, it's spring down here, you could go skiing in the morning and surfing in the afternoon, which is pretty much unique. Apart from, I think you can do that in some parts of South America, as well. But anyways, that's a great lifestyle. Like you said, we really wanted something stable for our kids to grow up in an increasingly unstable world. And in, since we've been back, we've had... Our children and ourselves have experienced massive earthquakes, and wildfires that almost destroyed a house, and came very, very close to it. We were fortunate to escape. Then we've had terrible terrorist attack, mosque shootings, in Christchurch. And now we have a pandemic. So all I'm watching for on the horizon is a plague of locusts.

Right, and of course, but luckily, you being in the business you are in , you will have forecast all of those things and had your contingency plans. Or you know, so massive earthquake destroys everything. And that's just: oh, 'plan 72b' comes out of the safe, presumably, you dusted off from a few years before and executed perfectly. Is that right?

Yeah, well, there's sort of, there's a very long story behind preparedness. And there's a really interesting analogy via around sort of planning versus preparedness. So we were actually really well prepared for an eaarhquake, even though Christchurch wasn't a seismically active area. But we never anticipated it. I actually did a whole bunch of work with another client in New Zealand in Christchurch, a very unlikely client. And we did a whole bunch of work for a couple of years, with that leadership team three years, where we worked through scenarios that would severely impact their business, but never once thought about an earthquake in those scenarios basically, came to life in 60 seconds, and that organization just rebounded better than some of their peers around the country. So...

Yeah, sorry, go ahead.

So that's a really interesting example where it's not so much having an exact plan, but it's the thinking that goes into the planning that prepares you.

Okay, so you're sort of, that is a long answer to say: well, we didn't think about the earthquake, but we're sort of agile and kind of ready people. So we came, it was, it was... But now in the aftermath of that fearsome earthquake, you launched a project called 'Sensing City' and at the time, everybody was saying: oh, smart city, smart city. And you got some traction, but it didn't turn into the kind of the pilot project that you perhaps would have wanted. Is that a fair summary?

Yeah, absolutely. And so, the center of my hometown, Christchurch, was utterly destroyed by the earthquake. And I looked around the world to sort of... what was going on with the opportunity. Instead, if you're going to rebuild the heart of a living city from scratch and want to instrument it with sensors, and therefore you could actually start to understand some of the important flows in a city, in a way that no one else can do. That really hit inertia in central government, where officials just simply didn't understand the value of data, the need to move fast and counted progress by looking at number of cranes on the horizon. So it was really disappointing, and quite a sort of a wake up call around people's ability to understand where the world might be going. And what's an opportunity,

Isn't it also with the smart city stuff? Isn't it also the case that it's a difficult business sale? I mean, because there isn't one city official, in charge of all data, there's a water department, there's a transport department, there's roads, there's, you know, there's green infrastructure, and there's all sorts of different bits, there's the police force, there's, you know, who knows what. And nobody is charged with buying a data service for all of those things. And so therefore, when you've got one, you run around saying: I can, I've got this marvelous thing, there's no budget to sell into as an entrepreneur, I'm not surprised that those smart city initiatives, all of them around the world, have found it very difficult going.

Yeah, and we recognized that specific point very early on, because the whole smart city push is tainted by that very challenge, right? Who's going to buy the data. And so we started looking at, you know, where is the most value, which will accrue from that data. And so one of the very early ones is three waters. And so if you look at most, three waters, projects, initiatives, infrastructure plans around...

What do you mean by three waters, clarify.

So fresh water, storm water, and waste water. And so in Christchurch, for example, as I would imagine, in most western countries around the world at the time, you and I would have more sensors on us right now, on this call between our laptops and our phones, which is probably one $1,000 worth a kit. Than there would be in most multibillion dollar three waters <inaudible> And so we said: actually, if you want to understand where you should start thinking about proactive maintenance, where water loss occurs, you know, how you should plan for the future, you should be putting sensors on that asset as you rebuild it. So you can actually start to monitor flows and understand where you're losing water. London, for example, loses the equivalent of an Olympic swimming pool every day full of water. It's just ridiculous. So there's a lot of value in looking at where you actually can you use data in a way that's going to create a benefit in cities, as opposed to 'Whoa, this smart city thing sounds great. It's a buzzword, you know, let's just go for it'.

And listen, I am put in mind of the average utility at the time what I started, what was that New Energy Finance. How do they know when there's a power outage? Well, the answer is the phone starts going. And they work out where it is. Because, that's interesting: the people from over there are not calling people from over there on therefore it must be downstream, etc, etc.

Genius, just genius.

Yeah. But the challenge of saying 'well, it's a smart city' is that you sell a three water solution to the water department or to the water utility, and you sell the energy one to the energy, and then they don't need to talk to each other. I mean, at some ethereal level, you'd like them to use the same data protocols. But, frankly, that it's probably not worth the coordination cost of trying to insist on that. I don't know. So that was a bit of a disappointing experience. But one thing if I'm right came out of it, which is that you were invited to be a Edmund Hillary fellow, was that because of the work that you've done on innovation? Or did that come from somewhere else?

Oh, there's a whole mix of things in my career and Sensing City was one of those. But I also spend time trying to convince governments to think long term, helping out think tanks and really trying to get people more prepared for events they might not expect such as pandemics.

Pandemics. Okay, so tell us what the Edmund Hillary Fellowship (EHF) Program is because, obviously, we know, you know, it has permeated to the UK who Edmund Hillary, the great climber, you know, probably the most famous New Zealander ever, I don't know if that's a fair statement. But so we know who he is. But what are his fellowships?

So what it is, is an organization that invites applications from people who are doing interesting or extraordinary things around the world. Part of it was this thing called a global impact visa, where if you were living outside of New Zealand, and you were doing really interesting work across a whole number of different areas, and particularly entrepreneurship, with a social bent, then it was a special visa that was available to you. And really, the idea was, how would you bring together some of the world's smartest talent and invite it to New Zealand? And then, you know, see what happens as a result? So how do you become a magnet for talent, because talent really drives a whole bunch of different outcomes, not least of which is new ventures, better social outcomes, productivity, all sorts of things. So EHF, I would characterize it as a really clever experiment to see what happens when you bring together a bunch of motivated, talented and smart people, and I met some extraordinary people through EHF

So there's a cohort every year, is that right?

And there's a couple of cohorts a year. So I was in cohort four, I think it's up to... there's a lot more cohorts, maybe seven or eight right now. And each time I look at the profiles, of people coming into the cohort I'm just blown away, I think How did I make the cut? Because these people are just extraordinary.

You are too modest, Roger. I'm put in mind, and I was actually very lucky because when I went to business school in the US, I was something called a Harkness fellow. And, and it was a really prestigious and amazing, but you could be studying anything you want. And there was a very intimidating selection process. But if you're a Harkness, it's just the most extraordinary network of Harknesses And sadly, what happened, the money came from Stephen Harkness, who was one of the early investors in Standard Oil. And somehow, during the 1980s, around the time I was doing that, they blew up the finances. Somehow the trustees lost the money. And the thing literally, didn't quite go away. But it became this little shriveled and shrunken version of itself. And so, you know, it shouldn't be that I'm saying: I should sit here and say, 'well, I was a Harkness fellow, everybody. Oh, that's amazing'. That's, that sounds like... what was the fellowship program that Bill Clinton was on... that brought him to Oxford? It was the equivalent of that. I'm blanking on the name. But anyway, so that's the New Zealand equivalent and extraordinary stuff. And I'm sure that you're... I'm sure you're still getting value out of the networking and out of the cohort.

Yes, yeah, absolutely. And, as with most things, a matter of balancing time.

Rhodes scholar, that was the thing I was blanking on. So...

Yes.

You're the New Zealand equivalent of a Rhodes, domestic kind of Rhodes, our innovation, entrepreneurship, amazing person scholar.

But perhaps without the slavery, overhang of the Rhodes legacy.

Without some of the... Exactly, and that's a very important point, actually. I hadn't thought of that. But, absolutely. And Harkness, of course, had the kind of fossil fuels and... No, but I suppose it was a bit early. Climate change was known about because of Arrhenius and so on but not very much. Okay. So you, that was sort of what... you were doing these projects around innovation, awareness, and one of them is very relevant. Around that time, I'm guessing, you decided that it was 2015, you decided that New Zealand was not ready. It was at the end of these long supply chains, long travel chains, and it was not ready for a pandemic. That was your insight. What did you do about it?

Yeah, so it was 2015. And Ebola was tearing through parts of Africa. And I was looking at that and thinking: if that actually escapes that geography, this could get really dire very quickly. And so I thought, I'm gonna have a dig around and find out, who's thought about this from a New Zealand point of view. And I wanted to compile a long list of organizations and people who had thought hard about this and the the long list sort of look like that.

That being the blank wall behind you?

Yeah, the blank wall. Yeah, absolutely nothing. So if you're, if you're listening on podcast that visual effect is going to have no impact at all.

If you wouldn't believe what Roger's just done, if you're listening this on the podcast, you got to subscribe to the YouTube channel.

He just pointed at the wall. Okay.

This time, the morning, I'm very limited on my visual cleverness.

Yeah, yeah, we see that.

Yeah. So anyway, so it turns out, no one was thinking about this. So I put together a small team, we spent about four months analyzing the impact of a pandemic on New Zealand. And one of the things we found was that we're at the end of these long, thin, fragile supply chains. That has severe implications for how the country would function in a global pandemic. And so we made a series of recommendations after spending time with the Civil Defense Emergency Management Department, the Prime Minister and Cabinet here in New Zealand, the Ministry of Health, and quite a few large corporations. And we perhaps made a bit of a fundamental mistake in that we were so concerned about what we found, that we deliberately undersold the report thinking that people would logically get us, and the right people would then take these lessons to heart. And since then, I've watched every sort of viral outbreak around the world, things like Zika in the States, and then, in January, alerted clients to what was going on, something really weird was happening. And in hindsight, there's one really valuable lesson that sort of comes out is that, it's not a quote from myself, it's a quote from a Department of Health official in the States, made this really lovely observation, he said: 'everything you do before a pandemic seems alarmist. Everything afterwards seems inadequate'.

Right.

We're doing this reporton ebola, that's what we thought we don't be too alarmist now, because, you know, people might take this bad at a given context.

Right. But then, but the report, I mean... We know now that New Zealand has had a relatively... I don't want to say because I don't want to say a 'good pandemic', but I mean, it has not been... Has not seen the the devastating impacts that some other countries UK, US, Italy, Spain, some other countries have had. Was that because of your fantastic... you seem to be hinting that your report didn't quite land with the effect that you had hoped?

That's the polite way of putting it. Yes.

Sunk without a trace?

Yeah. So I would characterize New Zealand's, current situation in the pandemic, as lucky and nothing else.

And nothing else. Really not, not because of agility, speed of response, nothing to do with Jacinda Ardern's, you know, rapid action, just luck? Surely more than that.

Well, maybe I'm being a bit facetious, there's luck and following good scientific evidence. But also, if you think the government...

What you are saying: it wasn't preparation, it wasn't a plan in the safe, that could be dusted off. And then each department, each department of state, knowing exactly what to do and being coordinated because they practiced.

Now, and the government was very forward thinking and proactively released a treasure trove of documents that highlighted the decision making process. And the weeks just before New Zealand went to lockdown, and a couple of journalists did this remarkable piece of work piece putting together, you know, that whole decision making process. And essentially, it would be described as borderline panic, and very fast making decisions where government officials still wanted to write the briefing paper and the policy response after the decision had been made.

Well, I tell you, if those journalists want to have a look under the bonnet of a really horrible process, they can come to the UK, not just to look at central government, which has made some mistakes, which is probably an understatement, but also to look at London, and the way that our public transport workers were left completely unprotected for month after month, with all these statements, saying that you didn't need to use PPP and you didn't need to do this., you didn't need to do that, justifying what was manifestly obviously, the wrong advice, quite extraordinary. And somebody does need to get in there and actually figure out why, you know, what was the bucket chain between science and the national response and the mayoral and the London response was just fundamentally broken for which the mayor takes no responsibility whatsoever. But somebody needs to get in there and figure out, you know, but maybe it will.. it would happen just the same again next time. But nevertheless, we do need to get to that kind of accountability stage without question. But you're lucky because it didn't end up in a disaster, unlike, you know, what we've seen in London. But you, you did, although your report didn't quite sink without trace, but didn't land the way you wanted. And there was this kind of chaos going on, but you actually spent a torrid few months helping out, you know, just almost sort of working in the wilderness early on, as I understand, you know, helping organizations and those who would listen to get ready. What were you doing? Can you talk us through that?

Yeah. So, from about early January, when I started advising clients to think carefully about what was coming or what might come, myself and a colleague who had been working on this pandemic report, we started following the data really closely. We started tracking through, well... Where would it hit, what are the choke points, what do we need to look at much more closely and very quickly arrived at ventilators, did a quick audit of how many ventilators New Zealand had, how many it might need, and realized there was a massive chasm. So then we started linking up with a couple of very forward thinking and very wealthy philanthropists in New Zealand, Stephen Tindall and Sam Morgan, who both excel at their businesses, and basically committed millions and tens of millions of dollars to philanthropy over the years. And they were thinking the same thing. We turned up and said: actually, you need to start looking at x, y and z. The first cab off the rank was ventilators. I found a company in Christchurch that manufactures robust, cheap ventilators, for use in sort of developing countries. So started ramping up, you know, how we produce the ventillators on shore, that kicked off very quickly. And really, the idea behind this was to get six to eight weeks ahead of where we knew the government would sort of land on before they realized they needed it...

Testing as well, because it was kind of ventilators first but then I think everywhere in the world., you know, the ventilator crisis was sort of averted by the lockdowns, but then the testing is the next, you call it a choke point.

We started work on that as well. So nothing happened a bit earlier or sent him around ventilators. So worked with a very smart digital production company and started looking at how you would do drive-thru testing, contact tracing, vaccination, testing, all that sort of stuff. So we saw that earlier as well. And then we also looked at <inaudible> at the airport, etc, etc. And what was interesting was that, you know, private sector response, moves so much faster, break so many things and takes more risks. And then I would essentially alert senior government officials and said: 'we're working on this, do you want to know what's going on? Again, we think we covered unilaterally in about four or five weeks of<inaudible>, are you still working on that thing?' And then by that time, you know,we already had a whole bunch of work underway, and you just sort of formed it off, and then started working on the next thing. So yeah, it was 16 hour days for about a month, almost non stop.

But, you know, you've probably saved lives, by the sound of things. And, you know, I don't expect you to claim that, but I'll thank you on behalf of those, those nameless people whose lives you've probably saved. I guess the question, though, if we start to try to generalize, so what's the learning, is the question that governments are incompetent, and you need the private sector? Is the, you know, or, you know, what, what would you do differently? Should the government have been doing all of that? Or is the lesson that actually you need both the public, and the private, or the civic society response? Because the government, we'll never be able to sort of move as quickly and break as many things.

And this is something that has been on the top of my mind for quite a while because of the sort of eerie ideal and was which is, how do you sort of anticipate unexpected events and how do you respond to them? Which is government generally aren't uncompetent. I say generally, because up until three years ago, that statement would have been, you know, pretty much valid. But governments do set the constraints under which a private sector response can be very effective <inaudible>. And so, to your question, you need both working together, one working in isolation of the other will not give you the same results as two working well together.

Okay, so this is getting very relevant for the area, I spend most of my time which is climate change and the transition to clean energy, transportation, and so on. Because, you know, there also... There are, there's one school of thought that says, you know: governments should just sort of fix this. And there's another that says: oh, innovation will fix this. And the answer is neither is true. And I guess my slight worry when it comes to pandemics is, that you don't want private citizens or just, you know, rich philanthropists, they might be well meaning but I slightly worry when they set the agendas on, you know, health and really important social issues, because, of course, they have their own preferences, they might, you know, there might be, you know... Blank spots that are then not covered because the government's not doing it and leaving it to the philanthropists and private sector. Is that not a concern?

Yes, that's why I say you need to have both working together. And I think bizarrely, one of the poster children for a inbuilt inertia to get government is actually right now, in the States, where, you know, if there wasn't a slow pace of regulatory change, then Trump just would have rammed through, you know, just stupid policy after stupid policy, after stupid policy and rapid succession. But actually, the wheels of bureaucracy have slowed that down to a grind in some situations. And it's taken him, you know, almost three years dismantling some of the brakes on that process. So you definitely need to have, you know, a mix of the two together. Because when you think about it, the only reason billionaires are billionaires, is because the system really is broken to some degree, and that they accumulate the wealth, because the system hasn't really worked as well as it should. And then having those same people who've benefited from massive inequality, then saying: oh, the way to fix massive inequality, is to use my billions in a certain way, seems to have this sort of rotten logic at the core.

I would... I mean, there's lots of things I could jump on there. Because I think that the accumulation of wealth, a billionaire who did something tremendously valuable becomes a billionaire, it's not a sign of something being broken in and of itself. I think if that wealth, you know, cascades down through generation after generation,after generation, is never dissipated, then I think I've got more of an issue with it. But I mean, I guess I don't want to go down the what is broken in the US rabbit hole, I'm going to take away from what you said, is that the checks and balances that are built into the constitution have at least to some extent, worked, and hopefully, they've worked enough for this whole era to pass in due course.

On that point, I'm going to make a prediction that what happens probably in January and February will shape the world for decades.

For how long?

Decades.

For decades. Yes, I'm sure there's a... I'm sure that the sort of the first hundred days because that will shape the next administration. But I suspect that what's going to happen in November is going to shape it for decades, kind of first. So we don't...

Oh, so November won't matter, because it'll be January, February, when the penny drops, as to whether somebody leaves the White House or somebody comes in.

I agree. But that decision will be taken in November. But I want to come back to the question of climate and what you can learn from what you've been talking about for the climate challenge. Because one of the things, it's clear that what we need to do with climate change is massive innovation across every industrial, every economic sector. It's kind of all got to change so I call it massively distributed innovation. And, that's why I don't think it can be driven top down because, you know, governments, states bureaucrats just don't deliver that. But equally if you leave it to private sector and to those billionaires, however brilliant or smart, whether they know, whether the system is a bit broken or not broken also, but those if you leave it to them, then what you'll get is directionless innovation. And okay...

Right. So how, how do you get the sort of democratic, or at least political control, of the direction of innovation without breaking the innovation?

Yeah. That's a question, I think, which is, really vexed both sides equation for as long as it's been around, because the private sector is always saying: you know, take off the brakes, take off the brakes. And the government's always saying: you can't control, you can't control. And so there's always there's going to be this tension between them. And the key is, how do you have the right amount of tension to actually give direction, but not constrain? And if you look at, you know, different examples, people love looking at Silicon Valley. If only we had a Silicon Valley, you know, in our neighborhood, but...

Israel, the startup nation, that's the other big example. Yeah.

Yeah. But you have to have a really deep understanding of all the foundations that lead to the current state, you can't just say: let's just do what they've got, because, you know, we'll be going to a surface explanation of it. So you definitely need that tension between the two. And in some areas, the product sector will go faster. So you're reaching Mike Bennets from Z Energy in New Zealand before, where he set up a group called the Climate Leaders Coalition. And he essentially said: we don't think government's going fast enough on climate change, we want to go faster. And so that was their response. And now with a change of government, and the change of governments, you know, starting to go the same speed. And even then he thinks not going fast enough. So there are ways in which you can start to increase it.

Right. But that is in a sense, what you're looking at is the speed of innovation, right? But I'm also interested in how do you impose a direction? Because, you know, California is marvelous, and we all want to California, but you know, California just produces a whole lot of stupid innovation, or potentially even harmful innovation, you know, you could look at some of the things and again, it'll get contentious, is Facebook a good thing or a bad thing? It does lots of good things as well. But, you know, it's clearly led to enormous polarization of our society. Now, Uber has been tremendous at moving people around, but it has also done enormous harm for the fabric of a lot of our cities. So how do you, how do you kind of... Get not just the speed of innovation, but also what we critically need is innovation that doesn't just, you know, ram us through the planetary boundaries, or destroy our inner cities, or whatever, you could say. Another example could be these opiates, you know, very useful drugs in certain, very limited circumstances, but that innovation, you know, has not been directionally controlled.

And I think, you know, if you look at what's going on now, with the pandemic response, from both public and private sector point of view, what you're seeing is that COVID is climate change accelerated and provides a really useful example, to show what can happen and what you shouldn't do. So I think you and I both know, examples of organizations who have made, you know, really successful pivots, change their business model very quickly and done very well out of it. And response to environmental conditions and business conditions, and other organizations that haven't moved fast enough that have died. And so once again, it's that mix of a government response and a private sector response that we're seeing right now before our eyes on fast forward is what isn't required, I think, to give a valuable insight around how to tackle climate change.

Let's let's try, go back to this question of preparedness, planning versus preparedness. And I would add a third sort of dimension to that, which is agility. Because in the COVID, situation, a shock like that, you know, it would be perhaps, legitimate to say: well, you know, what, I'm not going to have a plan in the safe drawer, I'm going to be, I mean, maybe agility as part of preparedness, I'm just going to be really smart. I'm going to identify, I'm going to work with Roger, I'm going to identify the weak signals, I'm going to make sure that I can respond and I'm going to build muscle tissue. So in climate sense, I'm going to adapt rather than mitigate, I'm not going to invest now. I'm just going to be a really fast responder, and you know, how to... Which of those is the winning strategy when?

Excellent question and I always say to my clients that there is no way to accurately predict the future. But the conversations in the process around developing scenarios or having those difficult conversations, that process is what will help you prepare for an uncertain future. Because only when you have those difficult challenging conversations people sort of go: oh, well, what if that does happen? And how do we respond to that situation? What would that mean for us, and come back to that example, with that client of mine in New Zealand, where we had the Christchurch earthquakes, you know, we never even considered this risk, we're not even an seismically active zone. But all the conversations and the preparation and the planning, and the processes that were in place to make the organization more agile, and responsive and resilient, paid off in spades, when the earthquake set. So it's the value you have is the conversations around potential futures, that prepare you for what actually does happen.

So this is a kind of organizational level version of all models are wrong, but some are useful.

Yes, in a way, models hves really got...

It's not a model of the future, but it's a kind of organizational response. It's a model of a response.

Yeah, models, are necessary simplifications of complex systems, in order for you to get your head around all the moving parts. And examining a number of different models helps you counter cognitive biases around, you know, sort of paradigm lock ins and blind spots that you wouldn't otherwise consider.

I guess then reading across, though, into climate change, then the question is, how do we know how much effort to put into mitigation versus? Because I'm trying to remember who was it? So we've got three choices. It's mitigate, adapt or suffer? Clearly suffering is not what we want. And how do we choose how much effort to put in? Because, you know, it's very fashionable to say: oh, well, we should look., throw everything at mitigation,, absolutely everything, Extinction Rebellion, shut down everything, degrowth, whatever you want to call it. Because the only important thing is mitigation. But we also need to build schools, we need to build resilient infrastructure, we need to build hospitals, we need... People need housing, people need jobs, people need all sorts of things. And, you know, so the answer isn't throw everything at mitigation. But equally, it can't be well, we're just kind of figure it out, we'll just be agile, we'll adapt, you don't adapt to three or more, you know, degrees, or even two degrees of warming, or more. So I, I guess I'm answering my own question is, that you do as much as it takes to stay away from some really nasty boundaries.

But I also think you have partly just nicely described this concept of resilience, where you don't put all your eggs in one basket, where you think about difficult situations, you have a number of different strategies, up your sleeve, so you can respond when one of those outcomes becomes clearer than the others. And if you have invested only in one potential pathway, you're pretty much screwed when the other pathways start to become more apparent.

Which sounds great, if you are a wealthy, leading New Zealand organization, that's not so good, and this is probably, you know, this is at the core of the climate justice question. That doesn't work, if you are a developing country, very resoure poor. And particularly if you're a low lying Pacific Island, you know, how do you invest in three different plans for different eventualities around climate change? I don't think you can do that.

Absolutely, if you look at Indonesia, for example, you know, which is in my sort of neighborhood. That's a classic example. Where you have fundamental issues with sort of mega city infrastructure, you have hugely populous cities, you have a geographical location, right on the equator, where you are most likely to be hit by extreme weather events and rising sea levels. And you don't really have a solid governance system in the first place. So when you talk about sort of injustice, I immediately think of somebody you know, in Jakarta, who's living on a few dollars a month, and really at the mercy of whatever government does, and that's where it starts to get really sobering very, very quickly.

It doesn't... I mean, Jakarta is a fantastic sort of case study, if you want to get complicated really quickly, because Jakarta is increasingly underwater and about I think the decision was to move the capital inland. But Jakarta is largely, not exclusively but largely underwater, because they sucked all the water out of the aquifer and built skyscrapers on mud and clay. So it's sinking. It's not actually climate change, you know, some piece of the problem is climate change, but it is... Anyway. They do get very, very complicated very quickly. And that brings me to another topic, which is around resilience, that I worry that we are... You know, Jakarta is one great example of this. But all over the world, we're seeing systems of systems being coupled ever more closely, you know, people moving off out of the countryside into cities, cities are fabulous, but they are fragile. If there are shocks to supply chains, food supply chains, storm surges, we've got energy being linked to transport, being linked to communications, being linked to payment systems, being linked to emergency services, being linked to health care, delivery being linked to supply chains of all sorts. And we don't seem... You told, you pointed to your wall, when you looked for the list of people thinking about these problems in New Zealand and advanced, smart country, you said that that's the list of people looking at this stuff, who's looking at it, you know, at a global level? Where are the smart people thinking about resilience? So people say resilience. Oh, we have a lot. You're talking about cyber attacks? No, no, no, I'm talking about systems of systems that are linked in all sorts of ways with no firebreaks. Okay, tell me who's thinking about that? I hope so.

So, in the area of complexity theory, my observation is that there are a couple of camps. One is a very academic camp, which then sort of poo poos the very practical camp. And so a colleague of mine is very much in the practical side, we are very forward thinking in fast growing country has really adapted his ideas on complexity for how to deal with an increasingly interconnected and complex world.

So this is, if there's no fuel for a week, what might happen, how do you protect us? This is practical stuff.

Yeah, yes. And then I've talked to colleagues in the academic area of complexity, who had looked at that work and gone: 'well, it doesn't take into account the so, and so, so and so,theory, or the something...'

The convexity of the chaotic thing of the other is there's... ABC theorem.

Yeah. And I'm here, I'm going, there's no way you're ever going to communicate the academic complexities of complexity theory to bureaucrats. And so my colleague who's managed to, you know, think about this very carefully, has done this quite brilliant thing, I think, and translating it into ways in which people can take away these concepts for how you deal with systems of systems interacting. Yeah, but at the highest level, you're right, we have a world now, which is increasingly interconnected, where if you simply pull the plug on one system, everything cascades. And that gets...

As an engineer, you know, I know that if you start connecting more and more things together, you'll get unpredictable. And what you do is you put damping into the system, you put fire breaks. So you know, we have in the financial markets, we have these things called flash crashes, nobody really knows why they happen. You can always blame some trader, but actually, it's the system that enabled one missed keystroke to cascade through and transfer, you know, billions of dollars around the system, it's that system that's at fault. And so there you have a, you have a firebreak, you know, we just sort of shutting down trading, but it's an incredibly blunt and stupid instrument and far too slow, compared to the speed of the system.

Absolutely. And that applies across many systems that the modern world relies on now. And if you <inaudble>, resilience, what you find, that's what we found, and we did the work on the pandemic, in 2015, is that resilience is expensive in the short term, but cheap in the long term.

That's why I picked that quotation out of your report on the pandemic, and I really like it. 'Resilience is cheap, but does it...'. Hang on a second, I'm going to read it out. 'Expensive in the short term, but cheap in the long term.' And ain't that the case we've seen the destruction of the economy for lack of, you know, face masks that cost a few cents each to make. Um, I want to finish off with one other topic, which is about communications. Okay, so first of all, let's just summarize on that system of systems point. The answer is basically: no, there isn't an efficient machine or department somewhere figuring it out. And there should be. So if anybody's out there and knows what to do about that. But I want to come to the final point, which is communications, because when you wrote your report on pandemic, you said: well, we didn't want to be too alarmist. So we were sort of sub-alarmist and that didn't really work. But on the other hand, there's no real evidence that alarmism works any better. I mean, you know, the story of Pandora, it didn't matter how much she amped it up, it just didn't work. And so I've just... The last episode, but one of 'Cleaning Up' was with Christiana Figueras, whose trademark was optimism. Her business is now called Global Optimism. She is absolutely aware of what's happening in climate change and how disastrous it could be. But instead of going to ever more extreme scenarios of how ghastly it's going to be, and who's going to go extinct. She says that the solution is optimism, tell people you can fix the problem. It's going to be great. We're going to deal with this incredibly scary, but don't worry, it's going to be great. How inspiring so on. And who's right, so the fear mongers, the optimists, or do you need, you know, do you need to have two camps? Can you merge that in one person? What's your experience

My experience of large scale system-wide transformation, it's sort of boils down to two ways in which you can create successful change. But you know, there is two ways creating change - one successful. So one way is you say to people, either you go, you know, this way, so the left hand, and if you don't do that, then we're all screwed and you can leave. Or the other way is the right hand, we use, you paint a desirable, positive, alternate future. And people naturally want to gravitate towards that. And so it comes down to, how do you build a narrative, which balances the right level of concern with optimism? And that's a really nice segue into sort of, if people say to me: how do you sleep at night? I said: I'm a realistic optimist. Right? So actually burying your head in the sand, and hoping it's gonna go away isn't any use, and sort of having this sort of Pollyanna approach where everything's gonna be fine and be lovely, and, you know, just ignore anyway, isn't gonna work either. So you're got to be a part of the solution. And you have to recognize the way here is going to be difficult. But unless you participate actively, and try and make that change happen, there's no point in turning up.

So what you're saying is, it's really the combination that the leader has to embody the burning platform with the plan and the optimism that the problem can be solved. And burning platform alone doesn't work. And Pollyanna optimism alone doesn't work, and that we really do need leaders who kind of can somehow reconcile those two.

Absolutely.

Well, that has given us an enormous amount to think about. I'm just going to say thank you at this point for your time for getting up early, and let you get on with your day down in New Zealand. It's been such a pleasure and always a pleasure talking to you. Thank you for being our guest here on 'Cleaning Up'.

Likewise, and enjoy the rest of your beer. Thanks, Michael.

Thanks, Roger. Bye, bye.

Bye!

So that was Roger Dennis, he may not want to be called a futurist. But he delivers very concrete advice to organizations on what lateral risks, threats and opportunities might be coming towards them. So in my book is a futurist, but he is a damn good one. My guest next week, on 'Cleaning Up' is a hero of the clean energy space. Not many people can claim to have invented a whole new business model for renewable energy. But our guest next week did just that. He's also immediate figure. He hosts a podcast. He has written books, he is an investor. He's put substantial amounts of money to work on clean energy technologies and solutions. So I hope you'll join us next week for 'Cleaning Up' with Jigar Shah.

Ep8: Roger Dennis 'The Price of Resilience'

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