By Erik Rasmussen, Founder of Sustainia and CEO of Monday Morning
“The difference between a risk and an opportunity is how fast you discover it.”
This tagline has been driving my work for years. Yet the line is seeing new relevance. Across the globe, we are seeing how a growing range of disasters are posing still more risks to our current way of living. Extreme weather is destroying and flooding communities and infrastructure; water scarcity and lack of fresh water are impacting our lives and businesses; and uncontrolled urbanization is posing health risks to humans as well as to the planet.
In today’s strategizing and business developing, we are getting still more advanced in spotting risks associated with the climate threats facing us. The “risk-regime” is ruling on the executive floors, where we have become obsessed with making risk reports, hiring specialists in risk management and updating that 30-minute PowerPoint show on worst-case scenarios to the company strategy. Risk reports, books and analysis are on a steep rise and making managing risks a still more important executive tool.
The Noble Prize-winning economist Daniel Kahnemann is well-known for his work showing how we give more attention to avoiding losses than to creating advances. Especially, when we are faced with complex risks that we cannot fully comprehend. It is simply basic human psychology that humans are loss averse. It is in our DNA. This mindset has to be changed. There is only one way to avoid risks: Embracing them.
The hunt for opportunities
We have never faced so many risks, but that goes for opportunities, too. The challenge in front of us is to turn the risk society into a new ‘solution economy’. It is much easier said than done, but far from impossible. And big things have small beginnings.
This week one small but important step is taken in Johannesburg in South Africa. A group of thought leaders representing business, academia and civil society sits down to discuss how global risks can be turned into a wide range of new opportunities. Within the next two weeks, they will be joined by similar groups in all parts of the world: San Francisco, Sao Paulo, London, Oslo, Abu Dhabi, Mumbai and Shanghai. They are part of the new initiative Global Opportunity Network, which analyses how five global risks can develop 15 new opportunities.
These 15 opportunities will be tested in a global survey with about 5,000 private sector decision makers and influencers to determine how compelling the opportunities are when seen as investment areas. This work will enable the initiative to look at the pressure from global risks with a specific set of lenses: The kind that magnifies what new demands, behavior patterns and market disruptions these risks create, and convert this knowledge into sustainable opportunities for societies and for business.
The selected risks are: Extreme weather; continued lock-in to fossil fuels; urban break down; lack of fresh water; and continued rise in non-communicable diseases. Though we are facing many more risks, these are chosen, because they are global, accelerating, complex, influence people all over the world and calls for new innovative solutions.
Let us look a little closer at one of risks: Urban breakdown.
Within the next few decades, 70 percent of the global population will live in cities, according to WHO. The percentage tells a dramatic story about an almost explosive urban growth. OECD estimates that 71 trillion dollars, or about 3,5 per cent of the global GDB, is needed through 2030 to improve basic infrastructure into smart cities, including road, rail, telecoms, electricity and water infrastructure.
The way we handle these challenge will be decisive for how sustainable the world will become in the next decades. The risk of ending up with overcrowded, traffic jammed and heavily polluted cities is obvious and could trick further rise in chronic diseases. Today, the risk of obtaining diabetes is several times higher in a city than in the countryside.
So much for the threats. Let us start hunting the opportunities.
Introducing The Opportunity Manager
The biggest opportunity at hand is to turn the risks into sustainable innovation that can drive one of the biggest and fastest expanding markets. Projections show a potential for raising new investments for more than 70 trillion dollars within the next 15 years on the global markets.
However, the investments have to be closely coordinated to create a new holistic model for urbanization. It is essential that the different needs of the market are accomplished together in order to ensure sustainable living overall. As mentioned, the urban breakdown calls for the development of city clusters, connecting all relevant capacities from the public and private sector in one platform with one mission. The potential is immense and promising and could be a very important driver in shaping a solutions economy
To seize on this market potential, the opportunities we go pursuit must be threefold:
1) Need-driven: Opportunities must be based on the identification of new interconnected challenges. Most of the risks ahead are complex and global – the responses must be the same.
2) Partner-driven: None of the challenges can be solved by one corporation and one sector alone. Complex challenges needs systemic solutions and cross-sector partnerships.
3) Value-driven: Opportunities must be based on strong values for how to provide a sustainable quality of life
This outlines the mission of the Global Opportunity Network. In the beginning of next year, the first results will be presented. They will hopefully confirm that it is not too late turning global risk into new opportunities.
But the big question remains: How do we spread the good word?
Go tell it to the business communities. Tell them how to be best in the world and best for the world. Tell them that risk managers are history. And that the new trend is about hiring opportunity managers. The number of employed opportunity managers in corporate life in the coming years will tell us how far our message is spread and implemented. This will could be the game changer, proving that a new mindset is driving big business and leaving room for optimism for all stakeholders on the planet.
Global Opportunity Network is launching today in Johannesburg. The final report on 15 sustainability opportunities is due to be released January 20, 2015. Behind the initiative is Monday Morning Global Institute and DNV GL. For more information, see www.globalopportunitynetwork.org/
This blog was originally posted 08/28/2014, Huffington Post