The Challenge of Change in a Changed World

Kingsley Aikins
CEO
The Networking Institute
kingsley@thenetworkinginstitute.com

The virus is rampaging out of control around the world – infection rates are soaring, the death toll is astronomical and people are feeling weary, vulnerable, and scared. The year is 1918 and the Spanish flu is on full throttle and has the world by the throat. One in three people caught the virus and 50 million people died. In Ireland, 800,000 people were infected and 23,000 people died. And yet, and yet, this awful global tragedy eventually passed and was followed by a sustained period of innovation, creativity, and growth leading to the Roaring Twenties. The drivers, particularly in the US, were mass electrification and the mass production of millions of motor cars. People became mobile which resulted in the construction of roads, hotels, and restaurants. It was the golden age of sports, radio linked the nation and movies entertained the masses. So what if we were to have a repeat performance now, over a century later? What would be the modern-day equivalents of electricity and cars? Perhaps the contemporary drivers will be universal access to high-speed broadband and a vast investment in the green economy.

So as we wrap up 2020 (and good riddance) are there any grounds for feeling optimistic and hopeful for 2021 and what should we all do about it? The important thing to remember is that we will, eventually, exit this period and the emergence of effective vaccines will accelerate this process. As Abraham Lincoln famously once said ‘This too shall pass away’

Here then are a series of reasons to be hopeful.

1.   We are not going back – where we were was not so great. We’re going forward to a new era where how we live, work, travel, and learn will be different. If a year from now, you are doing things exactly as were doing them a year ago then you have a problem.

2.   Even though we are all missing connecting with people in the traditional way technology is opening up new possibilities. We can all think of dozens of ways in which in-person meetings beat virtual meetings but are there any pluses about meeting through webinars? I think there are five as follows –  

-       We are not geographically restricted – we can connect with anybody, anytime, anywhere in the world and it is free – a compelling price point

-        We don’t have to waste time, energy, money, carbon footprint, and grooming time flying off to meetings where often nothing happens.

-       People are available – they are not going anywhere – even on holidays. I think we underestimate the extent to which people are willing to take a call and are accessible. 

-       More people are spending more time online than ever before in history. We are now where we were expected to be five years from now. All sorts of unexpected people have become proficient on Zoom and embraced a new way of networking.  

-       Now, because of Linkedin, we can find out massive amounts of information on 700 million people who have signed on this social media platform. They have told this company all their work experience, educational background, and other interests and they are freely available to all. 

In short then, without wasting money, we can connect with anyone anywhere and can find out a lot about them. Accordingly, when we move on to the post COVID19 phase we will have developed a new online tribe to go with our more traditional connections. Sounds like a win-win.

3.   Change will become the new normal. But don’t believe this to be something new. Even before COVID19 we were living through a period of VUCA – Volatility, Uncertainty, Complexity, and Ambiguity. Artificial Intelligence, automation, and robotics were decimating whole sectors and industries. As the CEO of Mercedes Benz put it – “change is happening now faster than ever before and never will be as slow again”. There was a realization that success in the past was no guarantee of success in the future and, as an American management consultant, Peter Drucker put it, ‘to create the future you have to be the enemy of today.’  

     If I said to you 10 years ago ‘I’m in my Uber, on my iPhone, booking an Airbnb in Dublin the only word anyone would have understood in that sentence would have been the word Dublin because those other three nouns were unknown. The question then is – what are the things that will be in common parlance 10 years from now that have not yet been invented.

4.   Another dynamic that will be a feature of our post COVID19 world here in Ireland will be the diversity of our society. When I was growing up here (neither today nor yesterday I hasten to add) Dublin was essentially male, pale, and stale. Contrast that with today where 17% of the population of Ireland were not born in Ireland (as compared with 14% in the US who were born outside the US). In Dublin, the percentage is 25% but of the working-age population of Dublin, it is 33%. But here’s the question – does your network reflect the diversity of the economy you work in and the society you live in? All the research indicates that if that is not the case then you as an individual and you as a company underperforms.

5.   The hope is that people will change. They may reflect more on the basics of what makes them human and hanker after a more responsible way of living in a community and a wider world. They have given the environment a bit of a sabbatical and they like what they see. They may want to do things more simply and slower. They may reassess who the heroes are in society and rate frontline workers above hedgefund dealers. They may have a newfound respect for the role of government and how dependent we are on their services. They will have noticed how social distancing (which should really be called physical distancing) has made us miss and crave social interaction.

6.   Not only will people have to change but so will corporates. The shift from shareholder primacy to stakeholder primacy, the emergence of ESG (Environment, Social and Governance) factors, the attraction of impact investing all augur well for a more balanced approach. There seems to be a more general acceptance that 40 years of neo-liberal economic orthodoxy has created economies rather than societies and a ‘radical reset’ is in order.

So what does all this mean for the world of philanthropy and charity here in Ireland? The bad news is that it would appear that in many countries giving at the middle and lower levels are declining whereas the good news is that giving at the upper level is exploding. This is a reflection of the intense inequity and inequality of the world we are living in. But, as the cliché says, it is what it is. The reality is that we are in the foothills of a massive intergenerational transfer of wealth – the immense wealth of those aged in their sixties and seventies will have to be transferred and it can only go three places. Firstly, it will go to heirs – the children of the wealthy will inherit enormous amounts of money. If you are a member of what Warren Buffet describes as ‘the lucky sperm club’ you are going to be financially very secure. But there are many people who believe that giving enormous amounts of money to children can damage and destroy them. Back to Buffet who said in an interview in Fortune magazine that it is more important what you leave within your children than what you leave to them. Option two – giving your money to the government in taxes doesn’t seem to appeal to many though, perhaps, it could be the most insightful and impactful way to invest in society. Option three is intriguing, giving your money away philanthropically – university, library, hospital, church, the arts, diaspora, etc. Accenture has written a report entitled “The Greater Wealth Transfer” which says that this intergenerational transfer of wealth in the US alone will amount to $30 trillion between now and 2050. As the saying goes – a trillion here and a trillion there and it soon adds up to real money....!!!! 

So what are the implications? One assessment would suggest that we are in the early days of a surge in charitable giving around the world including Ireland. However, an essential piece of the jigsaw is missing in Ireland and that is for financial institutions here to put in place the incentivized structures that will facilitate this transfer and to promote them to their clients. This is what has happened in the US and has changed the architecture of philanthropy. It all started back in 1992 when a bank in Boston called Fidelity applied to the IRS to establish a 501©3 (tax-deductible) entity within the bank called the Fidelity Charitable Gift Fund. It was based on the Community Foundation model which had been around since 1914. This allowed for individuals and families to set up Donor Advised Funds and was a tax-efficient way for these clients to carry out their philanthropic wishes. Last year the Fidelity Charitable Gift Fund raised the most money of any public charity in the US and 6 of the top 10 charities in the US were banks. We have seen similar structures emerge in the UK and Australia. 

Philanthropy and charity can play a role here but, as social animals, we yearn for social contact and the spontaneous outcomes of serendipitous meetings. We need to get the balance right between face to face creativity and the benefits of remote working. We will enter into a period of experimentation with new work and organization models. In all that I detect a sense of hope, optimism, and, even, excitement. There doesn’t seem to be an appetite to go back, a realization that success in the past is no guarantee of success in the future, and to quote famed American management consultant Peter Drucker – “to create the future you have to be the enemy of today”. Or as Charles Darwin put it – “it’s not the strongest of the species that will survive, or even the most intelligent – it’s those most able to handle change”. And that applies equally well to the world of giving.

Roll on 2021.

Learn more about The Networking Institute here.