“ESG: How to Sustain Sustainability” with Board Director, Tech Entrepreneur, and Investor Mr. Ryan McManus in the USA

 

In a world with finite resources, sustainability is critical for protecting and preserving our planet and natural resources. To achieve sustainable development, we must harmonize three pillars: economic growth, environmental protection, and social well-being. Corporations need to refocus on how they do business. Gone are the days when sustainability and ESG are just important corporate concepts. In this modern world and digital age, ESG is intrinsically tied to business strategy and corporate success. In this episode, tech entrepreneur and board director Ryan McManus eloquently discusses ESG in the evolving digital economy and how companies can use it as a competitive advantage. Ryan firmly believes that ‘sustainability can only be sustainable’ if it directly impacts the business performance and metrics that we typically associate with business success. Tune in and find out how this relates to the future of leadership now that we are in the midst of massive revolutions in the digital economy.

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“ESG: How to Sustain Sustainability” with Board Director, Tech Entrepreneur, and Investor Mr. Ryan McManus in the USA

Radical Transformation vs. Automation to Drive Lasting Change

I relocated abroad to attend a Harvard Advanced Leadership Initiative Fellowship in beautiful Boston in the United States of America. Our thoughtful, bold leader joins us from the Big Apple in New York City. He is a globally recognized tech entrepreneur, investor, former managing director of a venture capitalist firm, board director, and business advisor. He built and founded the digital transformation practice for Accenture, a Fortune 500 information technology services and consulting company, and led its corporate strategy and international expansion practice.

He also built the world’s leading ‘smart product ecosystem,’ which enabled the digitization of trillions of physical products. He served as a Board Director and Chair of the Science and Technology Committee for Nortech Systems, Chair of the Board for empowerHER, and President of the New York chapter of the National Association of Corporate Directors.

Stay tuned as he shares more about how to make ‘sustainability sustainable.’ What is the distinction between technology automation and technology transformation, coupled with examples of technologies and industries, and why and how is Nelson Mandela’s leadership relevant nowadays? We warmly welcome my colleague and friend, Ryan McManus, to the show.

 

Leading Boldly into the Future | Ryan McManus | Sustainability

 

Ryan, thank you so much for joining us. This is such an important conversation. I’m happy to see you again. I’m happy you are part of this discussion.

I’m delighted to be here. Thanks for having me.

We’re talking about ‘sustainable sustainability.’ There are a lot of different terms, and people have different perceptions of these things. I know that sustainability has sometimes been defined as ‘meeting the needs of the current generation in a way that doesn’t detract from the needs of future generations.’ In doing so, typically, there seem to be three pillars to that: 1. balancing economic growth, 2. environmental care, and 3. social well-being. As a technology expert, I was curious to know your definition of sustainability.

Sustainability hits all of the aspects that you mentioned. It is, in a certain way, a very simple term to describe optimized business performance. I don’t mean to demote in any way all of the very important climate, carbon, and social goals, and all of those come together, but I think what we’re finding is that the leading companies in terms of business performance are also the leading companies in terms of ESG.

Part of that is because they can afford to invest in ESG, but part of it is because they’ve made strategic and operating decisions and technology decisions that are allowing them to do different things and to do things better. That’s something important for leaders to understand in terms of the opportunity. Too often, ESG is considered something we must do and nice to have. We had corporate social responsibility several years ago. For many organizations, that was an add-on. It wasn’t core. The opportunity here is to understand that we can do things differently and perform better because of it.

Too often, ESG is considered to be something nice to have. The opportunity here is to understand that we can do things differently and perform better because of it. Share on X

For our audience members who are not typically business people and are talking about ESG, which is Environmental, Social, and Governance, could you expand a little more on ESG, its principles, and the framework?

What we’ve seen certainly in the last couple of years before that in the making has been a real evolution of attention from different stakeholders to these different parts of the economy and, in particular, to how large institutions are making decisions in a different way. We’ve always had shareholders. We now have a much broader stakeholder audience in the business domain that we are evolving to consider more.

Underneath the E, S, and G, there are different sorts of frameworks. There are different models, expectations, and standards of bodies, from the UN to the European Union to nonprofits, that are looking to drive change. There are thousands of different groups that are trying to create standards or collaborate on standards. It’s quite complex from a leader’s perspective to understand all of the different moving parts. There are levels upon levels to go into. There’s much work to do to understand the full remit.

To that point, there’s incredible complexity, as you say. To what extent have we made progress in streamlining these different standards so that there is a standard that is understood by people globally?

I’m not sure that we’ve made all that much progress. In fact, my observation would be that it’s become more complex in the last few years as more groups have become more vocal and recognizable in the space. Part of the opportunity for a leader is to understand and appreciate this complexity but chart a course with clarity in terms of what ‘we’ (the corporation) are trying to achieve. If we try to hit every metric that’s being thrust upon us, then it’s largely a losing proposition. We’ll get caught up in complexity very quickly.

However, if we take the opportunity to understand what we can do differently, do better, and what will move the needle in terms of scopes 1, 2, and 3 on the ‘environmental’ part of ESG on the climate side, we can craft a very compelling strategy that will take us forward while this quasi-regulatory environment shakes out. Eventually, there will probably be some standardization in terms of standards themselves, and we’ll have much clearer guidance regarding what’s expected of our organizations. In the meantime, there’s plenty to do regarding anticipating where those could go and changing our strategy and approach.

I was curious about the term ‘sustainable sustainability.’ Can you explain what you mean by it?

My observation on some of these topics is that when the going gets rough, we tend to revert. We go back to how we always did things and our previous assumptions regarding operating capability, tertiary emissions, or the specific context. We’ve been in an increasingly difficult context for the last several months, be it with inflation, geopolitical conflict, or the number of things facing ongoing supply chain issues. Energy price is a big energy price escalation.

My concern is whether there is a real benefit, and I believe that there is a real benefit, if sustainability or other ESG topics have not been brought into the core strategic conversation but rather are something that we feel like we have to do. We have to address it because of different pressures. When the going gets tough, we come back to stage zero.

 

 

My observation is that if there is a way to tie sustainability to business, financial, and operating performance, we can make sustainability sustainable in a very interesting way. We’re not even doing it because of the external pressures coming at the organization. We’re doing it because it makes good leadership sense.

 

Leading Boldly into the Future | Ryan McManus | Sustainability

 

Also, good business sense. Do you have a practical example? I know you’re an investor and tech entrepreneur. You have founded several very successful technology-related businesses. Do you have a practical example for us where a company was perhaps struggling with some of the pressures to transform, but then what was the light bulb moment for them to understand that perhaps there was a good business case to this? Can you describe that context, when that was, and what the life bulb moment was?

The patterns that I look for contain something very interesting. This is the intersection of another dynamic that everyone will have heard of by now: digital transformation. This dynamic is largely transformation and automation but involves new technology that enhances our business models and adds new value to the market. When I think of the intersection of these emerging digital capabilities and ESG goals, two or three things come to mind immediately.

Sanofi (a pharmaceutical products manufacturer) designed an entirely new manufacturing plant in Massachusetts, different from any previous design they had brought to market. By using things like real-time supply chains, the Internet of Things, platforms, serious automation, and all of the different capabilities we are very familiar with at this point, we achieved staggering operational results for that plant. It is approaching 90% energy efficiency, 90% less water usage, and 90% reduction in raw materials usage, which is a pretty staggering number.

Whether or not there was a sustainability target, it’s a staggering number in terms of what the technology has brought to that particular plant. Another example I like very much is Einride, a transportation company out of Sweden. Einride is a semi-autonomous, battery-powered industrial trucking company. The core product of Einride is to take manufactured goods from point A to B. It’s a transportation company, but they do it in a different way.

The last I looked, they were claiming 10X driver productivity because they have individual drivers piloting entire fleets of trucks and 90% on the way to 100% less emissions in terms of the carbon footprint of the actual exhaust system of the vehicle. One of the interesting things here is if I’m a shipper and I have a choice between my traditional shipper and an organization like Einride, Einride gives me more benefits, and prices are more or less the same. It becomes a very easy decision to make because Einride has reduced my scope of emissions.

I get this additional benefit from what’s effectively new digital technology in terms of battery power, AI, computer vision, IoT, and the rest. There’s another great example from outside of commercial or industrial, which is the state of Mexico has released a $100 million ESG bond that they are going to be basically making real-time in terms of transparency of the allocations and critically tracking the ESG benefits that come through the investments from the bond.

There, they looked at many different standards, including the UN Development Goals. They are very clear ESG targets. One of the things that are inherently a problem with ESG investing or ESG claims is that there’s lots of greenwashing (namely, the act or practice of making a product, policy, activity, etc., appear to be more environmentally friendly or less environmentally damaging than it really is.) We all know that. The state of Mexico took a visionary step to say, “We want to use an emerging capability. Blockchain is all about traceability and transparency when we use it correctly.”

They’re bringing this real-time transparent capability to market to not only prove that the allocations have gone to the targeted populations but that the results of those allocations and bond investments will deliver the kinds of goals they set out to deliver. There are several examples that are material here that address many different goals and business cases and critically demonstrate the new value that we can bring both on the business side and also on the ESG side.

You have a particular perspective from a technology and an investment point of view. From where you sit, what do you think the current state of urgency is in the world around climate change?

There’s certainly been an evolution of the understanding of the importance of it. There are still different groups claiming different sorts of positions. There’s been a real step change in the last few years regarding what I’ve been watching around urgency and opportunity. What’s interesting is that it’s coming from many different domains. It comes not only from regulatory agencies around the world or national governments.

It’s coming very much from the grassroots, shareholders, and boards, which brings the G of the ESG into this, the Governance. It’s coming from customers. Effectively, individuals vote with their talent and investments and with “Who do I want to do business with?” The talent implications here are very powerful. Unilever has received approximately two million applications a year for employment at Unilever. I believe that the number that they’ve quoted is 75% of the people who joined say that they joined because of Unilever’s mission around these ESG-related goals and ambitions. This becomes a very material business conversation when it’s hard for many organizations to find and retain talent. It’s going across a lot of elements of society and organizations.

I’m biased. I grew up in Unilever. I’m very passionate. I was schooled by Unilever. What struck me as a young graduate coming out of university was always this incredible clear value around integrity and ensuring that we are doing the right thing for the right reasons for all of our stakeholders. It’s interesting that you quote that figure. In the bigger context, what do you think are the big, bold strategic issues and challenges facing leaders nowadays?

The first one that comes to mind is a subject I work with organizations on quite a bit. It’s understanding where the digital economy is going. We’ll return to ESG in a moment because they’re tightly intertwined. We had a very high level of differentiation between the analog and digital economies. In the analog economy, life was much more predictable. It was much less dynamic in terms of new competition and technologies that came in and disrupted things in a matter of a few months or years. That’s all in retrospect. It might not have felt like that at the time, but compared to now, that’s the absolute case. The digital economy is a much different animal. We have trillions of extra dollars coming in terms of investment from many different domains.

It’s resulting in hundreds, if not thousands, of new competitors to incumbents. They might not be competitors at the core product level. They could be groups that try to take a bite of your value chain, margin, and ecosystem. There’s a whole lot of complexity that comes in here. There are some very clear patterns that are observable in terms of this dynamic around the digital economy. Very clearly, it’s the new business models that win. New business models are transformational. They’re not just automation. One of the big strategic challenges I see with organizations is we mistake automation for transformation.

How would you define the difference? How would you define each of them and draw the distinction?

It’s an important distinction to make. Automation is basically about adding data and digital to what we already do. It’s cost efficiency. It’s critically important to do that right. That was always the general sense around, for example, IT in the analog economy. We still need to pay a lot of attention to that because it saves us money, and we can reinvest the money and drive our costs down vs. the rest. Transformation is much more about new value propositions, new business models, opening new markets, serving more customers, and serving customers differently.

It’s a lot harder. It requires a different degree of creativity and approach to risk, which is something that we all pay attention to as executives, board directors, and investors. What I would say is part of the challenge, and to come back to this bold challenge is to articulate an enhanced business or a new business model but not necessarily assume that we know how we will get there. That’s a relatively new muscle that leaders in organizations need to be comfortable developing because, in a more predictive, slower market, we could know exactly left and right all the steps we need to take.

In the dynamic market, the speed that we’re all dealing with, which is not slowing down on the contrary, is more about creating an approach that allows us to transform, learn continuously, and experiment that requires different incentives, investment approaches, and talent. It also requires a willingness to experiment and not get everything right and work out. Returning to the ESG conversation, part of that bold vision is that ESG is effectively or largely a derivative shift to the digital economy. I say that because we can’t have transparency on current ESG performance without data.

ESG is largely a derivative of the shift to the digital economy. That’s because we can't have transparency on current ESG performance without data. Share on X

We can’t make things better without taking advantage of the new technologies that are coming to market. Thirdly, we can’t report transparency across our own operations of scope 1, 2, and 3 without the new data platforms and new communications. It’s largely something that can and must be instrumented by digital technology, as other value propositions have been. That intersection of a bold vision, understanding or articulating new ways of looking at the value we can bring to our customers, new outcomes we can bring to our markets, and meshing that together with our ESG approach is a very powerful recipe for leaders going forward.

Are there any other challenges that particularly stand out for you?

There’s plenty. The geopolitical shifts that we’re at the beginning of a new phase in terms of, for example, we’re looking at the deglobalization of the internet in many ways, and the impact that that’s going to have on communications on political relations and supply chain is yet to be determined. That’s after 20 or 30 years of nothing but more globalization and interconnectedness, and we see that starting to fragment.

There are lots of demographic shifts that organizations need to be paying attention to. There’s a lot more that organizations are looking to do with their talent strategies and their talent engagement. It is the other side of the coin from that bold strategic vision in the following sense. The best talent knows what good looks like. They know what a good business strategy looks like. They know what a good ESG strategy looks like. They know what it looks like to effectively put our money where our mouth is and make investments, not only give it lip service but expect more and more from the organizations they associate themselves with.

Another corollary to the bold vision and talent engagement is that we have an opportunity to try to map together the organizational vision and my personal ambition of what I want to contribute to this organization and in my life more broadly. It’s a very powerful thing if we can get it right. It largely helps to address some of the challenges we’re seeing regarding talent engagement and recruitment.

I was wondering if you could make that distinction between the analog economy and the digital economy in very simple terms for the audience. Do you have an example in each where an organization has perhaps automated but not transformed and then a different example of an organization that’s gone the full scale of transformation? The idea is to draw the distinction between the two initially and then give us an example of each.

In terms of the analog or the digital economy, it’s a term that I use to simplify some of the shifts. The analog economy was largely marked by a relatively consistent set of competitors, a consistent growth rate in the sector, limited disruption in terms of new entrants, and relatively stable businesses, as far as the sectors themselves were concerned.

At the same time, there was a very established investor class. There weren’t thousands of different kinds of investors. It was a relatively stable investor class doing relatively similar things regarding capital outlays to different organizations. One of the shifts that we’ve seen in the digital economy is that we now have more angel investors, venture capitalists, corporate venture capital players, sovereign wealth funds, and individual people trying to play in this market.

We have this exponential growth of sources of capital, which is looking for a home. It’s going into a lot of different areas. It’s not only the companies. It’s startups, ecosystem funds, ESG investments, and any number of different kinds of areas. We have always had many investment opportunities, but in terms of company investments, there are more models to be going after currently.

Part of that was marked by a lot of capital and cash in the global economy. The net result of those couple of changes is that if you’re in banking, for example, there are thousands of companies that are trying to take a bite of the apple, and they could be doing it from a specific banking product, open banking APIs, or from setting up digital native banks that never existed before. There are plenty of different examples here in terms of the shift.

From a leadership perspective, that has vastly opened the competitive set that we have to pay attention to. Whereas our competitive aperture previously was maybe the 5 or 10 companies in our sector that we cared the most about, if that’s all we’re looking at now, we are almost, by definition, missing where the threats could come from. That’s largely how I distinguish between the analog and digital economies.

You point around automation versus transformation. Is there an example of an organization that thought they were transforming but we’re automating? Could you share that and perhaps a second example of an organization that persevered and underwent transformation?

I’ll give a category example rather than picking on a particular company. Let me come back to banking. Automation and banking are largely access to online accounts, not needing to go to the tellers too often. This is an example that’s going back many years now. It’s about different user experiences and making buying and selling financial products easier. Those sorts of things. That’s automation. We’ve always done all of those things. Transformation in the banking sector has several different flavors to it. On the one hand, we see, for example, entirely new organizations that never existed before, in many cases, founded by people who were not bankers before they founded the company who came to the market to do a couple of things. We will take X percent off of the margin you’re paying.

We’re going to serve, for example, populations that never had access to certain kinds of financial services and products. It’s not necessarily competing on a product basis; it’s competing on how we define the market and how we improve accessibility to products and services. Some of these groups have grown into hundreds of millions of investments and then into billions of dollars in actual value for the organization. If I’m in banking, every dollar that’s in those companies is a dollar that’s not part of my organization. Automating what we already do did not make the difference, as far as bringing new value to new markets made the difference. There’s an evolution here in terms of how I think about things.

I’m curious to know what your thoughts are. It’s a topic that we discussed when we were last together in Boston. These are examples of how you would go from automation to transformation. In higher ed in leadership, education, and development, what in your mind is the model of automation versus transformation? What would help disrupt the sector from a transformational point of view?

I’m not an expert in the educational sector, but I’ll apply a model here that describes part of the strategic journey that leaders need to take. Let me back up a little bit. We hear a lot about client-centricity and customer-centricity. If you ask leaders what that means to them, as often as not, you’ll get a response that customer centricity makes it easier for our customers to buy our stuff. That’s important. We all have to sell and deliver, but there’s an opportunity and technology that enhances that opportunity to understand more the outcomes our markets, customers, and clients are trying to achieve. This is part of the disruptive recipe for organizations entering a sector that hadn’t previously been there.

They’re not focused just on the product or service. They’re focused on the outcomes that customers are looking to achieve. A very easy example is the ride-sharing industry, the Uber, Lyft, and Careem industry, which are ride-hailing services compared to traditional taxing. (Editor’s note: Careem is a company that provides an app-based car service that connects people to rides. It designs an online platform that offers a marketplace of community drivers where passengers can request a ride, see the cost, and charge it to their selected credit card. Careem is a Dubai-based super app with operations in over 100 cities, covering 12 countries across the Middle East, Africa, and South Asia regions. ) 

The competition and the disruption have nothing to do with taking us from point A to B. It’s an entirely new industry that has emerged in the last several years. Billions and billions of dollars worth of market capitalization. It’s all based on convenience and knowing what my journey will be like. I don’t have to take out my wallet. I know how long I’m going to wait. If I forget something in the car, I can retrieve it. None of that is taking me from point A to B.

It’s all digital and data-driven. It’s those outcomes that the people who choose to take those kinds of services versus a traditional taxi are choosing. In certain cases, people think that those are more or less safe. There’s a whole recipe that comes to mind. That outcome view is instrumental for most organizations and sectors. If we look at education in particular, for example, executive education, we can position it as you’re buying a course, lecture, or a workshop, or is there an opportunity to take it a little bit further and to understand that the reason that organizations are looking to, for example, develop their next-gen talent or their executive teams, is because they’re looking for this improved business performance?

They’re looking to change leadership mindsets. They’re looking to craft these bold new strategies that engage emerging digital technology, ESG, and different sorts of talent engagement, and that’s the benefit they’re trying to get out. They’re buying a 6-hour, 1-week or 6-month course. They’re trying to get to this outcome for the organization. Ask or have a more explicit conversation about WHY people are interested in our products or services. This idea goes back to Clayton Christensen, the godfather of this. (Editor’s note: Clayton Magleby Christensen was an American academic and business consultant who developed the theory of “disruptive innovation,” the most influential business idea of the early 21st century.) Technology allows us to do it in a very different way. It has demonstrated the power of engaging these new capabilities to deliver outcome statements.

What technologies are emerging? If you had to define and describe them, how would you do that?

This is a very large list. In general, we’ve seen an evolution of the digital economy over the last many years. The first phase of Internet 1.0 and Mobile 1.0 was the digitization of content. It was drag-and-drop web authoring. It was a very simple way of creating webpages and basically a one-way communication. We’ve gone a lot further than that over the intervening years. We have platform business models and collaborative services. We have a rapidly growing and finally maturing Internet of Things environment. It’s harder to digitize physical things than to digitize pure content or financial services or 1s and 0s. That’s been a slower burn but is ramping up quickly, well beyond critical mass.

That’s giving digital capabilities to literally any physical product. It can be a machine, an engine, or a pair of socks. There’s nothing that we can’t digitize in some form or fashion, given our economic and technological capabilities. AI is maturing very quickly. 5G is coming very quickly. Some people feel like we’ve heard about 5G for a long time, and it’s not here yet, but if you look at the numbers, it’s progressing faster than 3G or 4G did. That’s going to revolutionize access. It will largely transform previously more challenging sectors to connect in terms of remote locations, agriculture, and much more broad coverage of industrial manufacturing. In there, we see the intersection with IoT. Blockchain Web3 is, in my view, a potential game-changer. I say blockchain, not crypto.

There's nothing that we can't digitize in some form of fashion given our current economic and technological capabilities. Share on X

Can you explain that term and what it means?

Blockchain is the ability to instrument a couple of different things: much more transparency and automated instrumentation of end-to-end ecosystems or end-to-end solutions where multiple parties transact across the lifecycle and supply chain of a product or service. We’ve always been able to do that, but now we can do it with a bit more real-time data, transparency, and critical trust inherent in the system.

What would be an example of products or sectors using blockchain?

A supply chain is largely understood to be Web3 moving forward. Some examples that come to mind include De Beers, which will track diamonds from the moment they’re mined all the way through to the counter at the diamond store. There are some reasons we can imagine the viewers want to do that. They want to do that because these are very valuable assets, and they don’t want to lose track of them in transit. They can also do that because people don’t want to buy mined or extracted diamonds with inappropriate labor practices.

The Blood Diamonds, for example.

We’ll have this lifecycle audit that shows us exactly where, when, and who, from the very beginning of this product, all the way to where it was sold, were participating in the chain. They are very powerful examples, but those are examples that are already here. One of the areas that I’m very interested in is how Web3 might change transaction behaviors. How can we buy and sell differently based on blockchain capabilities? There are already been some examples. For example, Propy is a company that orchestrated the sale of a home for over $600,000. It was maybe not quite a single click, but effectively a single click. (Editor’s note: “Propy is a real estate transaction platform leveraging AI and blockchain technology to  empower buyers, sellers, their agents, and escrow agents to close a traditional real estate deal entirely by technology, 24/7 worldwide.) 

The purchase happened in that period.

The purchase happened extremely quickly. It is a fundamentally different way of executing a very expensive and complex transaction. Are there risks to that transaction? Of course, but directionally, we should ask ourselves, “Where will Web3 and blockchain change transaction dynamics across different sectors?” It’s a very open and wide question, but it’s the nature of a question. It can be very transformative regarding how sectors behave and how different companies lead in the market.

How would you differentiate the characteristics of Web3?

If we come back to Web 1 and 2, we differentiate between Web 1, 2, 3, and 4 because, fundamentally, there are different technology architectures at play here. Web1 was a traditional client-server. Some people will recall that individuals and organizations had their own servers, hosting their own websites, and that was the architecture. Web2 has seen the dominance of Big Cloud.

These are walled gardens. These are highly centralized mega-platforms, and we all know who the players are there. They’ve brought incredible speed, efficiency, and scale to this idea of the digital economy. Web3 is going back a step. It’s evolving in a different way. It’s a bit more decentralized. You’ll hear terms like DeFi, decentralized architecture, and decentralized servers. I’m not of the camp that thinks that Big Cloud will go away because of this more decentralized capability.

I think that this is an evolution that represents distributed ownership of any asset, be it physical or intellectual. I should theoretically be able to orchestrate my own IP regarding “How do I contribute to an organization? How am I rewarded for it?” We’ve seen many of those developments from across different talent groups for some time emerging but directionally very interesting.

Web4 will be another evolution of the architecture. It’ll be much more autonomous. Given all the data that we’re creating and going to create, we’ll probably need some more help with it from different technology elements. We’ll have more personalization and more real-time support in terms of decision-making and other performance areas. Web4 is already happening. This illustrates the difference between automation and transformation.

Transformation is not saying, “We’re at point A, and we transform. We’re at point B, and we’re done.” Transformation needs to be a continuous capability that leaders are always challenging assumptions and anchors, asking the next questions, and what we can do differently with these new digital and data capabilities, be it an ESG, core operations, and bringing new value to the market. It’s an ongoing skill that organizations need.

Transformation needs to be a continuous capability, that leaders are always challenging assumptions, always challenging anchors, always asking the next questions. Share on X

Shifting slightly, I know you also work in the field of AI or Artificial Intelligence, and you also talk about the future of work. It’s highly contentious because, for some people, it’s seen as a threat, and there’s also an opportunity. I read that Amazon is considering bringing robots into their organizations, given some of their unionization issues and the corporate challenge around that. What is your view on artificial intelligence? How do you define it, and how does that relate to the future of work?

 

Leading Boldly into the Future | Ryan McManus | Sustainability

 

I have a very simple definition of artificial intelligence, which is the following. AI basically refers to computers and machines that think, act, and see like humans, not exactly like humans, but similar to humans. I do think that there’s still a premium for ingenuity and creativity. It’s one of these areas that can be very scary to people because there’s a legitimate concern that we will be automated out of our jobs.

There’s this feeling of insecurity around technology, and that has happened historically with any technological evolution. I will not diminish the concern. It is going to happen in certain sectors. As concerns the future of work, there are a few things to keep in mind. For a particular organization, how do we intend to use AI and transparently show the benefits we’re trying to bring to market?

If we have a context where people are nervous about it, what are we doing to either retrain them, re-skill them or position AI so that it’s something that we do to augment their performance? I return to, “The best talent knows what good looks like. The best talent typically wants to work with the best tools. I want to perform the most performant. I want to optimize my execution.” Not everybody feels like that, but certain people do. AI is like any other technology. It can be used for good or for not good. We see AI creating new cyber attacks on the not-so-good side. We see AI potentially damaging different jobs.

How we take care of those people is part of future conversations. Much of what I’ve seen and heard about the future of work falls into this automation camp. What are the new tools? What are the new capabilities? It’s important, but it’s only part of the story. The future of work also comes back to this conversation about what new value we can bring to market, both in terms of business and ESG benefits.

How do we take advantage of the opportunity of these new tools and capabilities, including AI, to, for example, train our people faster, give them more opportunities to grow the business, and grow the organization in a different way? There’s room for very explicit strategic intent for how we plan to use AI and how we will take care of that population when there’s displacement. This is a leadership mindset. If we say, “We’re going to bring in AI,” then I think leaders will quickly see some pushback. We’ve seen that in many examples.

What are the key technologies that you are aware of or have established investments in, etc., that are helping the planet meet the climate goals?

A combination of established digital technologies and emerging technologies are intertwined. We’ve done some work, for example, to look at an end enterprise operating model from sales, talent, operations, supply chain, and even things into accounting and the C-Suite, basically the entire structure of a company. You can map different ESG-friendly technologies to nearly every single node in that operating model. The point is that there’s a huge wave of technology already here. I mentioned the Sanofi example previously. That’s all based on existing tech.

More and more, we’re seeing, first of all, an explosion in venture capital in terms of, for example, climate tech, carbon neutral, carbon-friendly tech, and other social tech. When I say an explosion, it’s multiple times more money going in 2024 and 2023 than any year previous. When I look at that dynamic, one of the questions I ask is, “What domains is it going into?” There’s a lot going into carbon and manufacturing materials, be it plastics, algae, and water conservation. There’s a lot going into mental health and different ways of, for example, managing and recruiting to avoid bias. There’s activity across every aspect of this idea of functional areas in the organization. The supply chain has a lot of technology going into it. If you do the research, you can get to a pretty interesting mapping of an organization to these emerging capabilities.

You can start to ask yourself, “Where might this go in 3 to 5 years?” Many of these are relatively small companies but demonstrate some very interesting directional capabilities. Where do we want to place our bets, and where do we think some of this emerging tech can make the biggest difference? That pairs with the Internet of Things, the sensors that track emissions, electricity usage, and all of these things that we need to pay attention to, the AI that allows us to optimize the performance of these kinds of capabilities. It all blends together in a very interesting way.

What do you think ordinary people sitting at home can and ought to do to help the planet?

If people are interested in this, there are a lot of actual consumer products and consumer technologies that are coming to market more and more. You’ll also notice that a lot of businesses that are B2C or consumer-facing businesses are touting their ESG bonafide. Shake Shack in New York now uses straws in its milkshakes created from recaptured carbon. Does that influence why you want to buy a milkshake? Maybe, or maybe not, but it’s an interesting branding decision that Shake Shack has made to tout their ESG strategy.

 

 

There are companies that have come to market in terms of transparency of chemicals within the products, having refills sent to your home for things like soap, shampoo, and detergent instead of having to buy the big plastic bins all the time. We can look at our buying behavior. More and more alternatives are being made available to us.

Shifting gear a little, you’ve had a remarkable, diverse, and interesting career. What would you say has shaped you over the passage of time from your young life into your business career, investment, entrepreneurial, and board positions? What has been the trajectory? How did you get from where you were to where you are?

There are a few consistent things. One is I’ve always been interested in building things. I am not an engineer. I used to be able to code. I certainly can’t code to the degree that great coders can do nowadays, but I’ve always been interested in building new businesses and technologies. That’s been something that has informed a lot of the decisions that I’ve made throughout my career. I didn’t necessarily recognize that’s what I was doing when I started.

There were some things I was interested in. They seemed to be merging. I was part of building some of the early websites. It looked like an interesting, compelling project, and I started working on it. In retrospect, that’s been one of the golden threads of my career. It is this blend of trying to understand the emerging technology capabilities and then creating new businesses around them.

I’ve had the opportunity to do that in the context of very large organizations and with startups as an investor and as a director. It’s largely the same application of the interest. You get more experience over time. That’s one. To do that without necessarily thinking about it at the time, you have to have a learning orientation. By definition, if you’re looking to build something new, you have to learn about it as you go. That is very important for people who are interested in this work to be comfortable with. Most of the time, we didn’t know how things would go. We had a theory and experimented; things work, but they don’t work, and it’s okay. You’re making progress across this portfolio of experiments that you’re driving.

If you're looking to build something new, you have to learn about it as you go. Share on X

It’s a very different career and lifestyle than the more well-trodden paths. The world needs both. In any way, I do not think that there’s one better than the other, but I know the difference in terms of the path. You do ping pong a little bit on one, more than the other. There’s a different risk profile that accompanies it. I wasn’t necessarily conscious of this builder’s interest, but in retrospect, it was very clearly part of the ambition.

The other thing I’ve had the opportunity to do, which was of paramount interest to me, especially when I was younger, is I wanted to work internationally. I’ve had the opportunity to work on the ground in 50 countries. I’ve worked globally since I started my career. I got very lucky with my first boss and the team that allowed me to pursue that interest, particularly how it intersected with digital.

Which company was that?

That was Anderson many years ago. A hallmark of my career is that largely everything I’ve worked on has had a pretty important international, if not fully global, component.

In your young life, where were you born? Where were you raised? What do you think shaped you as a child?

I was born outside of Chicago in a town called Lombard, Illinois. Like many people, what shaped me was the people I was surrounded by. It was family and neighbors. I had the great privilege of growing up in a very close-knit community and a set of neighbors. We had a wonderful public school with teachers who worked very hard on behalf of the students and helped us see things differently; many people were generous with their time, counsel, and sharing what they knew in whatever field it was. You can’t say enough about that. It’s a pretty material. That’s a gift. It is a wonderful opportunity to have when you’re growing up.

Do you think that’s where the learning mindset came from? How did your teachers and mentors at school encourage that?

For me, it started at home. I remember my parents buying encyclopedias and books. At the time, it was a cutting-edge children’s learning tool. They always were bringing this into the house. My parents were also very active with the schools that we were attending. It was part of the culture of the home, and there was a real dedication to that as part of the role they wanted to play. It was to instill a love of learning, to support and sponsor it. When I look back, I’m not entirely sure how they could do everything they did. For most people, it has to start in the home.

Shifting slightly, talking about a global leader, we’ve both had a lot of admiration and respect for Nelson Mandela. Can you take us back to a specific moment, either watching a film, reading a book, or watching television, that comes back in mind for you where you were struck by Mandela, his life, leadership, and legacy, any of those? Is there a particular moment? When was it? How did you feel at the time?

I’m not sure that there’s a particular moment. If I had to identify a particular moment, it’s probably around the creation of the Truth and Reconciliation Commission because that was a real keystone in terms of his impact on his country. More broadly, there are three things that Mandela showed us that indicate the kinds of leadership behavior that regularly win. When I say win, I mean they make life better for the people, organizations, and communities we are looking to serve.

 

 

Those three things are his grit, his ability to withstand all of what was done to him, and his isolation. Not only did he survive it, but he emerged from it with a clear ambition and a sense of how to improve things. Grit is underestimated in terms of how important it can be in terms of the impact over time. It’s not pleasant to develop. It’s called grit for a reason. Going through those hard times is part of what allows leaders to come out to the other side and do very powerful things. The second area is his ability to move beyond his sustained injuries and potential grudges.

If you want to call that forgiveness or moving ahead, it’s a very clear demonstration of being bigger than the situation that silenced him for a long time. The third area is his interest and flexibility to find shared solutions to move the country forward. On those second and third points, one of the things that I’m concerned about is that I don’t see as much flexibility as perhaps we have seen previously. There’s a lot of anchoring in, “My way is the right way. Our way is the right way. By the way, not only are we not going to change, but if anybody even entertains the opportunity to try to discuss something collaboratively, they’re no longer with us.” It’s a very limited mindset.

It’s ultimately not going to be very successful. The world is hungry for leaders who can put their interests aside. Some of the things that Mandela did were not what he wanted to do. He understood that to make a difference and a positive change, he had to find that shared way forward and bring a much broader population of people together. Across those three things, it’s an incredible illustration of what leadership can do.

The world is very hungry for leaders who can put their own personal interests aside. Share on X

Is there an example of one of those things you thought he put aside for the greater good? Do you think his leadership is still relevant nowadays?

I’m not a Mandela expert in any way, but the one that comes to mind is Mandela’s economic perspective, which was much more towards the socialist-communist lens. To get South Africa on the right footing, he had to collaborate more with people with much more of a capitalist orientation. I understand he felt a lot of pressure from different communities on that, perhaps being accused of letting them down. In the end, those kinds of decisions brought more people into the conversation. It’s exactly the opposite of saying, “My way or the highway.”

Do you think his leadership is relevant nowadays?

The model is highly relevant, particularly with a stated ambition to find shared ways forward. There’s been a lot of animosity in different parts of the world, with the left and the right, for example, at each other’s throats, in effect, refusing to try to find common ground. In the last several years, there have been a lot of examples around the world of different factions refusing to get along, not even making themselves open to the possibility of getting along. That’s a terrible failure of leadership.

The world needs more of that. We can’t solve the problems or take advantage of our opportunities if all sides insist on anchoring in their own points of view. There’s a lot of relevance there. I would also come back to the point on grit. In particular, for younger generations, understanding that working through some hard things and taking some harder opportunities takes dividends in the long run. It’s exactly that challenging experience that builds more capability, empathy, strategic ability, and leadership ability. It’s exactly those kinds of experiences that have, over and over, been shown to be game changers. Rather than avoid them, there’s an opportunity to embrace them. For existing leaders, part of what we can do is create a context that limits the downsides for people in those endeavors.

We can't solve the problems or take advantage of the opportunities that we have if all sides insist on anchoring in their own points of view. Share on X

What would be an example of that to limit the downside?

I’ll give you one very tactical example in the domain of innovation. What a lot of organizations have done historically is if we invest in innovation and new product development, we invest in it with the expectation that the people working on those projects will get it right. If we’re doing exactly the same thing we’ve always done and we know how to do it, that makes sense, but if we’re in this much more dynamic context, we need to be more comfortable with the idea that we’re probably going to be mirroring the market more in the sense that what 90% plus of startups don’t make it.

How do we de-risk that? We de-risk it in several ways. We don’t make big bets on innovation budgets. As progress has shown, we seed fund and iterate the budgets step by step. If something doesn’t work, we don’t call it a failure; we call it learning because people don’t want to be associated with failure. In large organizations, there are very specific contexts where having failed is very relevant, but it’s not the most, in my experience. Let’s bonus the people whose projects didn’t work.

You don’t bonus them to the moon, but you bonus them a little bit to indicate that we appreciate the effort of assuming that they worked very hard and did their best because not every experiment will work. We give them a place to go after those kinds of projects are perhaps put on the back burner.

Any final thoughts about the future of leadership and what is required of future leaders? Any final thoughts about what you think Nelson Mandela would say to top-end leaders nowadays?

The future of leadership is already demonstrating itself in this way. It’s about managing through increasing complexity, be it technological complexity, competitive complexity, or ESG complexity. It is having the courage to articulate a bold vision, and that’s not the hard part. The hard part is having the courage to learn how to recognize or realize that vision. Those kinds of capabilities are very different than top-down command and control.

The future of leadership is all about managing an increasing amount of complexity. Share on X

Nobody talks about command and control in organizations anymore, but there is still a lot of expectation to have all the answers. That is part of the changing leadership attribute that’s proving to be beneficial. It’s not about having all the answers. It’s about having all the (right) questions. It’s about bringing in this diversity of experience, demographics, capabilities, skills, and mindset to have the conversation and drive the experiments, but then, “As the leader, I need to make the decisions, or we need to articulate the right way forward. Once the decisions are there, we’re bringing the entire team together.”

It may sound simple, but when things get hard, there is a tendency to fall back on the old waves of behavior. The world is too complex. There are too many different skills now for any one individual to think that they have all the answers. It’s no longer possible if it ever was. Certainly, in this digital economy, it’s less and less possible. Having these conversations with a broader portfolio of skills and experiences is very powerful.

Understanding the difference between transformation and automation is critical. It’s easily the thing that I see as the biggest differentiator between growth and maintenance in terms of understanding our role as leaders not only to lead our organizations but also the impact that our organizations make on our communities, marketplaces, and customers. Broadening our understanding of what that impact is, I think, is a real opportunity for most organizations.

That’s pretty powerful. That makes a lot of sense. Any final thoughts you think about what Mandela would say to top-end leaders nowadays?

He would say there’s an opportunity to understand each other better and to find ways forward together that improve what we’re looking at nowadays. The nature of the conflicts and challenges we have now and ahead of us are not small. They’ve never been small at that level. It’s by finding ways to collaborate, negotiate, and have all parties feel like they have a win instead of these black-and-white conversations. I suspect he’d be in favor of those kinds of efforts.

There's an opportunity to understand each other better and find ways forward together. Share on X

Ryan, thank you for sharing your insight and wisdom. Keep shining in the world. We learn so much from you. I look forward to our next interaction. Thank you for coming to share your thoughts with us.

Thanks for having me.

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Talking to tech, entrepreneur, business investor, and board director Ryan McManus reminds us that we’re sitting on a planet with eight billion human beings and limited finite resources. We need a better way. In our quest for sustainable sustainability, the world is seeking new and higher standards of ESG, Environmental Care, Social Well-being, and Good Governance for strong economic growth, not only for our corporations but for our institutions and everyday citizens, and standards that will give us the reassuring promise of our habitable future planet.

In this highly complex, rapidly changing world of technological automation, innovation, and transformation, how do we inspire and empower our corporations, institutions, and everyday consumers to transform old habits and models and deliver a better outcome for a lasting world? Contrary to popular belief, the bottom line is people do not resist change. People resist loss.

Corporations need to see superior performance, outcomes, and results.

 

 

Investors need to see better returns and shift their own expectations from short to medium and longer term. Everyday consumers need technological options that serve their needs at prices that do not disadvantage them. Technological automation, doing more of the same better, will not cut it. Add-ons to existing strategies will not work. Technological transformation, scientific revolutions, and radical new business models are required not only to help us raise those standards of ESG but also to deliver superior business performance.

Do not get left behind. Lean in and be part of this radical technological transformation.                  Why? Because humanity and the world need you to lead boldly.                                                          Until next time, take care and take thoughtful, bold action.

 

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About Ryan McManus

Leading Boldly into the Future | Ryan McManus | SustainabilityRyan McManus is a globally recognized technology entrepreneur, executive, investor, board director, and advisor. He is the founder of blockbld, the web3 enterprise investment platform; founder of the digital transformation and business model advisory firm techtonic.io, and managing director of the venture capital firm Inflexhn Partners.

He previously founded Accenture’s Digital Transformation practice and served as the Accenture Strategy COO and leader of the firm’s Corporate Strategy and International Expansion practices.

Ryan also built the world’s leading smart products ecosystem, enabling the digitization of trillions of physical products as the President and SVP of Partnerships and Corporate Development for EVRYTHNG, the IoT Smart Products platform company acquired by Digimarc. 

Ryan served as board director and chair of the Science & Technology Committee of Nortech Systems, Chairman of the Board of empowerHER, and President of the National Association of Corporate Directors, New York Chapter.

One Response

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