This discussion focuses on the importance of being purpose driven and planning for the long-term impacts businesses have on our collective future. Our experts will explore why siloes are the antithesis for innovation and why empathy is imperative for founders.
The 17 Sustainable Development Goals (SDGs) are a call for action. As part of the 2030 Agenda for Sustainable Development, adopted by all UN Member States in 2015, the SDGs outline change to create peace and prosperity for people and the planet now and into the future.
With UN Member States making the commitment to SDGs, what role do businesses and start-ups play in attaining these goals? Why is it important to integrate Environmental, Social, and Governance (ESG) into innovation for start-ups?
This discussion focuses on the importance of being purpose driven and planning for the long-term impacts businesses have on our collective future. Our experts will explore why siloes are the antithesis for innovation and why empathy is imperative for founders.
Hear from our guests Utaukwa Allen, VP, Corporate Social Responsibility & Citizenship + ESG, Kyndryl; Warrick Cramer, Global Director Innovation Strategy, Kyndryl.
Nel Akoth [00:00:02] On today's episode, we will be discussing being driven by purpose. Why innovation and Environmental, Social and Governance, commonly referred to as ESG, go hand in hand. As part of the 2030 Agenda for Sustainable Development adopted by all the UN Member States in 2015, the 17 Sustainable Development Goals are a call for action. They outlined change to create peace and prosperity for people and the planet now and into the future. We are going to explore the role businesses and startups play in attaining these goals. As a company that sits at the intersection of being a startup at scale and an experienced enterprise, Kyndryl brings a unique perspective to this conversation. We focus on the importance of being purpose-driven and the planning for the long term impact that businesses have on our collective future. Our experts today will explore why silos are the bottleneck for innovation and why empathy is imperative for founders. Let me get into it by introducing two very esteemed experts on this topic that are joining me today, Utaukwa Allen and Warrick Cramer. Utaukwa is the vice president of Corporate Social Responsibility and ESG. In this role, she leads a global organization dedicated to defining and driving Kyndryl's societal impact. Warrick Cramer is the global director of Innovation Strategy for Kyndryl. He brings an entrepreneurship background where he works with a global ecosystem of like minded partners to support Kyndryl's customers in achieving their ambitions. Utaukwa and Warrick, welcome to the Progress Report and thank you for joining us today. I'd also like to thank our listeners for tuning into this episode, covering a subject that touches all of us across communities. Warrick, talking broadly about start ups in our current geopolitical environment. What impact have geopolitics had on innovation, particularly for startups?
Warrick Cramer [00:02:34] Great question Nel, and thank you for having me here today. Really, really excited to be on the program. So I think it's a great question around geopolitics, innovation, and startups. So I think in that context, if you look at the impact geopolitics has actually had on startups, and if you think around supply chains just to start with, if you were a startup and you were in a manufacturing sort of industry and you're having to do prototyping, etc., and doing that offshore, the current challenges from a supply chain point of view would probably inhibit some of that "what's going on," for example, in China, and other parts of the world. So it has definitely proven to be quite challenging for some of the startups who have to manufacture and do that sort of type of work. On the flip side of that, the geopolitics, because we all know some of the impacts of that's happened with the pandemic, I think a lot of the countries sort of start to look at sovereign capabilities. For startups that have actually got talent sitting there, that has actually been proven to be quite beneficial for a lot of them. Because now they're able to - with workforces and how they're actually working across those sort of different geographies - it's sort of probably in some respects been a competitive advantage for them. If you look at sort of the bigger corporate organizations, it's actually proven the shift of the different workforces and how they have to manage that. So I think from a startup point of view, for some it's been really beneficial. For others it's actually been quite difficult.
Nel Akoth [00:04:00] You're really spot on because the pandemic truly casts a different light on all of us on just how to think about the whole subject. Can you also just touch on, for the innovation community, what is that digital component of the circular economy? How should this community think about?
Warrick Cramer [00:04:17] So I think, you know, the digital circular economy is an interesting one. So I think the digital circular economy has provided the information to organizations, I suppose, for better reporting. You know, it becomes a transparent. I think if we look at the circular economy or in its context, from a digital perspective, topics around digital wastage, which is a really interesting concept now because, three or four years ago I really hadn't heard that term at all. As I sort of looked into it, to understand and learn more from a digital circular economy perspective, you've got developers that are producing code usually one time. So if you look at just any organization, the amount of code that's actually in there that cannot be reused. Right? And the actual, I suppose, manpower that it requires to constantly do that coding on top of the energy that's actually consumed with the computers in the background. When you sort of couple those together, it is a hell of a lot of wastage. So how do we actually stop that wastage? Well, you have to somehow start to index some of the coding which can be reused. And when I sort of stopped there and listened to that concept of digital circular economy, I thought, wow, you know, I looked at it in a physical sense always. But now when you sort of look in the digital sense, and many organizations since that I've spoken to, they all share the same sort of problem. So I think, you know, digital circular economy (and circular economy in general) is something that's really underutilized in many organizations today.
Nel Akoth [00:05:54] Amazing. I mean I'm right there with you Warrick. I had not heard of the term digital wastage before. Just like you, I mostly thought about it in the physical sense. But it makes a lot of sense, as you just shared on the fact that there's so much code that can now be reused and that makes a whole lot of sense on how you think about it in a circular way. Today we are talking about relationships between start ups, innovation and ESG. We know that ESG recently became more prominent, even though it has been around for years. Why is that?
Utaukwa Allen [00:06:31] Nel, I think one of the key drivers to propel ESG prominence in the business community was BlackRock CEO Larry Fink's letter to CEOs, and this was in 2018. In that letter, Fink called on the private sector to really think diligently, not just about how the sector could deliver financial performance, but also how it could serve on a social purpose. He argued that this would drive long term growth. He warned that without a sense of purpose, no company could achieve its full potential. It emphasized, unequivocally, the importance of focusing on long term growth. It really set in motion this keen focus for companies to adopt sustainable business practices and both climate action. And if we think about the social domain, we're seeing that emerge even stronger over the last couple of years and the emergence of the prominence and social sustainability that we've seen in the last 2 to 3 years. You talked about this a little bit already, the impact of COVID-19 and the associated economic crisis that has really dramatically increased the existing economic wealth gap globally and revealed longstanding systemic inequalities.
Nel Akoth [00:07:45] Wow, that's interesting. And again, as for the sustainable business practices, that makes so much sense as we think about it in the long term. From a startup angle, thinking about how it aligns with the UN's sustainable goals, why is this so important?
Utaukwa Allen [00:07:59] I mean, it's just expected, right? It's a strong signal in the marketplace in terms of demonstrating both shared values. So companies that demonstrate a strong ESG commitment are better positioned for long term growth and shared values. So many investors, employees and customers want to know that your company and its leadership are committed to advance broader societal goals with an emphasis on collaboration and innovation. That's also really an inherent risk in the VC model of pursuing outsized returns and generating rapid growth at all costs without a clear understanding of what ESG issues are material to the business. So if you have a material issue today, it will likely increase in magnitude as you scale up. So you have to think about this from an upstream innovation perspective, and from the design space, really thinking about how ESG is part of your DNA.
Nel Akoth [00:08:55] Mm hmm. And Warrick, as we just read that on how ESG is part of your DNA, what role can (or should) enterprises play in sharing the best practices with startups?
Warrick Cramer [00:09:06] Yes. So it's really interesting. Utaukwa, you know, even when you're talking about that, if I come back to the meaning and purpose elements around the ESG and the unease tags, I'm still yet to meet a startup to this day that does not have a meaning and purpose. Right? Because that's what drives all of them. And if I go to your question around the shared best practices with startups, corporates have got a lot of information sitting there. A lot of the time they've got tons. Right? And a lot of times, you know, one good thing that corporates are great at doing is getting consultants to do reports. Right? Report after report, you see tons of it. Some of this information just usually sits in the top drawer. That information can be quite valuable to a lot of startups, and so how do you extrapolate that and share those learnings with that community and help to shape their thinking and show "the how"? Right? Because at the end of the day, startups are great at getting ideas off the ground, but a lot of them suffer as they go through the different stages of their growth. When they get to a scaling element, that's when they actually really find it very, very difficult. And that's where corporates then play. That's where they intersect, right? That's where corporates are really, really good. They're really great at scaling things because they understand the systems of processes. And so that shared sets of values is where I see personally where the two really intersect quite well in Interlink.
Nel Akoth [00:10:32] Excellent. Now I want to bring in the aspect of culture. As a company, we are going through a significant culture change and this is a huge part of my role as Chief Transformation Officer. It's a topic I'm really passionate about. Utaukwa, how do you see culture influencing startups. Meaning, how do you actually embrace agility, embrace mistakes and the ability to innovate?
Utaukwa Allen [00:10:58] I think, you know, this is an opportunity where we might see that industry giants can learn about innovation. Right? And so we're doing this work within our company and other companies are thinking about cultural transformation, but these types of partnerships that we're talking about today really can help companies think about agility because innovation is the core of startups DNA. They're bringing something new to the market. They believe in the power of innovation because they are trying to solve a unique challenge in a differentiated way. Thus, agility is going to yield the results that allow them to innovate. And they really have a good grasp on prudent risk taking, leveraging market information, research and data to create a new offering in the market in spite of the risk that, well, it could fail. Right? and that's something that we talk about in terms of cultural transformation, prudent risk taking.
Nel Akoth [00:11:53] Absolutely. And if you were to offer a recommendation, how would you guide these companies to go deeper than just talk innovation and greenwashing and really get into that meaningful change?
Utaukwa Allen [00:12:06] Well, it's important that there's alignment from the top first. Right? The biggest challenges to being able to integrate in a meaningful way is to map to KPIs. We have indicators and targets based on the UN SDG, right? There's 17 of them. They've been around since 2015. We have resources and frameworks to really drive meaningful outcomes and we have to have that message from our leadership, right? Companies have to hear that from their leaders so they know what the company stands for and how it will be run. It's easier to embed innovation in this frame. It's easier for functional leaders to really drive change and map to outcomes once there's shared value coming from the top of the company.
Nel Akoth [00:12:54] Thank you. And Warrick, any thoughts on your end? Anything you can add about that meaningful adopting a culture that supports not only ESG goals, but really, again, truly getting to the real innovation.
Warrick Cramer [00:13:06] I think if you look at startups, for example, it's always about change. They never stay static. They're never, ever still. And I think for Kyndryl as well, I mean, we've been given a gift, right? An opportunity to make an impact. And it's really up to us because change can be quite exciting. You know, if you look at it as an adventure and if we learn from startups, they're always about change an going on that adventure. Where they start and where they usually end up, are usually very, very different. If you talk to founders through that whole journey, you know, it's always having that openness. The openness to to learn something new. The openness to, you know, just be humble and have the humility to say, "You know what, I don't know something, but I'm willing to learn". And I think if you adopt that and put that through the lens of everything that you do, I think change is a lot more easier to embrace.
Nel Akoth [00:14:00] You're right. Change is hard, let's just put it that way for many. But I like the way you brought it out that, you know, when you think of it from that angle of it bringing goodness, it can be also very exciting. Utaukwa, you brought up some great points on embracing agility to really innovate when we touched on culture. What would you say are the long term impacts businesses and startups can have on our collective future if they truly put their effort and focus on innovation for social good?
Utaukwa Allen [00:14:33] Wow, that's an awesome question. My short answer is that we can change the world. We can make this world work for more people. We can make our global economies work for more people, and we can do that by driving long-term business value. It's not a sacrifice, but with strategic focus, focusing on ESG and corporate social responsibility drives long term business value if you do it the right way and if we partner around shared goals and shared vision.
Nel Akoth [00:15:09] Warrick, do you have anything you would add just on that long-term impact of innovation.
Warrick Cramer [00:15:15] Utaukwa, it is about changing the world. And, you know, it's the little steps that we take that make the big difference. You know, it's not looking for that eureka moment where we could just be changing in one second flat. It's the little things that we do. And I think about all the wastage that we have as organizations. Wouldn't it be lovely if we were able to just collect all our hardware that we normally discard around the world and we give that to a developing nation and enable them with our partners to recycle those components to put it back into our supply chain? And if you think of that just for a moment, you know, what does it actually create? What impact does it actually have on those communities? Well, we're actually standing up, you know, cottage industries. We're helping to give people better lives by giving them housing and helping to educate their families and their children and that whole ecosystem. And it goes back into supply chain at the other end where we can recycle that product for a new product rather than actually wasting a lot of that or using it for landfill. So I think if you use that as just a very basic example of when we actually can bring everyone together, the impacts can be quite profound. And, you know, it's no such thing as perfection. We don't have to do it at 100%. But you know what, if we get at 80%, that's good enough. We can always alter the 20% elements of it, right? So the 80/20 rule, but it's all about implementation. It's all about just doing and making it happen.
Utaukwa Allen [00:16:48] Warrick, I just have to jump in because we keep talking about the circular economy and you brought up such great points that this is an economic system. So it's about a system in which these materials are kept in the economy and they're driving value for all the participants. And you hit the nail on the head with how by focusing on these materials and staying true in the economy in a circular fashion, it can drive more value from our participants.
Nel Akoth [00:17:19] You know, the more I'm listening, it's truly a win-win on both sides. So it's really a good place to be and really exciting for all enterprises. Now, we've talked a lot about innovation and ESG in startup and large-scale context. Now, what's the best way to approach governance? Warrick, how can our listeners today leverage effective processes while they are still really working on remaining nimble and fast.
Warrick Cramer [00:17:47] Yes. You know, governance is a really interesting question because I think innovation can never be done in isolation. You know, if you look at a lot of large organizations now, a lot of large organizations fail at that last mile delivery. Right? So they're all really great at getting stuff done. And then what kills them is that governance. The governance of, "Okay, I have to line up technology. I have to line up operations. I have to get approval from legal and finance, etc." And by the time you go through all those different gates, guess what? You've lost 12 months and a lot of pain and a lot of people have actually dropped off because they're just saying, "You know, this is really too hard". So I think when you're managing governance, it actually has to be quite doable and functional and realistic. Do we really need a 300 page contract? Right? Is it realistic for us to bring that down to like three pages? And it's really just pushing that sort of thinking as part of your governance and measuring the importance of those different steps. The governance is actually very, very important, but as part of governance, you have to be transparent. Transparency is key. And I think where it sort of typically tends to fall down is where you get those little silos within the organizations and people don't want to share. And I think it's very dangerous, but it also slows down the process quite considerably.
Nel Akoth [00:19:12] You're very spot on on the point of measuring importance. Because again, we touched earlier on the conversation around wastage. So, you know, you want to be very realistic and functional. So I think those are two great elements of driving a really successful governance around the ESG and the innovation that enterprises are undertaking. Utaukwa and Warrick, this has been such an enlightening conversation on what I believe, and I'm sure our listeners believe, is a critical topic for our society to advance. I characterize it as a win-win. This discussion truly underscored the importance as outlined in the UN Sustainable Development Goals. This is beautifully stated in this quote from their website, "We are transforming our world, ultimately improving lives and spreading prosperity throughout a healthy planet". Again, win-win. Thank you to all our listeners for tuning into this episode. As we've just learned, regardless of our role in a large corporation or in a startup company, we all have a responsibility to drive real innovation and support the environmental, social and governance structures within our organization. We each have a role to play. Until next time, I'm Nel Akoth on the Progress Report.