Rick Wheatley on breaking out of the old ways of thinking to create the future we need

We start this conversation talking about South Korea in 1998.

This was Rick’s first posting when he was in the US army at 22 years of age.

He then found himself skiing and climbing in the alps and sailing in Norway. And afterwards, very quickly got immersed in leadership development.

Rick Wheatley now runs the advisory firm he started in Oslo called Systems7, where he helps leaders break out of the old ways of thinking and helps them see new possibilities that enhance commercial success, while creating the future we need.

We talk about how he got into this space and how he started his leadership development journey.

He talks about the power of taking people to the edge of their mental maps and nudging them off.

We talk about the way our brains are wired. About cognitive bias. And how the challenges we face today impact our ability to lead change.

I ask Rick how we can accelerate the sustainability strategies and performance of companies. And how ESG can be less about a paper drill, and more about action.

His insights in this area are fascinating.

Rick talks about the power of expanding the playing field.

He talks about what a CFO said to him once that was game changing for their teams.

And then we talk about the hot topic of net zero.

There is so much here. He even finishes with some really sound advice for the times we are currently living in.

So grab that favourite beverage or throw on those running shoes, and enjoy this conversation with Rick.

And please don’t forget to let us know what you think of this episode, leave a review and subscribe.

00:00:02:05 – 00:00:27:03
Philippa White
Welcome to the show, where we unearth new ways of looking at ever evolving lights around the world. Seen from a number of different industries, cultures and backgrounds. But there’s one thing that unites everyone I speak to. They all want to do their part to make the world better in their own unique ways. It’s a uniting passion. Whether they’re from the commercial world, third sector or public sector from the Global North or the global south.

00:00:27:15 – 00:00:58:11
Philippa White
My name is Philippa White and welcome to TIE Unearthed the million dollar question. Are ESG there to protect companies and their money or are they there to help protect our planet? How will companies and countries start to meet net zero? And why is disrupting the comfort zones of employees a tool to a better world? Hello and welcome to episode 61 of TIE Unearthed.

00:00:59:03 – 00:01:25:04
Philippa White
Today we’re speaking with Rick Wheatley, a friend of mine whose ambition is to help leaders break out of the old ways of thinking and see new possibilities that enhance commercial success while creating the future we need. He’s the founder of System Seven, an advisory firm. He started in Oslo in May of 2021. And their underlying aim is to help businesses that matter to the future outperform the ones who don’t.

00:01:26:02 – 00:01:59:19
Philippa White
They are inspired by the idea of forced transitions, an oft repeated phenomenon in which societies and businesses seem to get surprised by major shifts. Despite the writing having been on the wall for some time and in neon lights at that system, seven equips leadership teams to avoid force transitions and transform with intent. We cover a lot in this conversation, from mountain climbing to sailing to the state of the world and thoughts on how to make things better.

00:02:00:06 – 00:02:08:21
Philippa White
There’s a lot here, so grab that favorite beverage or drone those running shoes and enjoy this conversation with Rick. Hi, Rick. Thank you so.

00:02:08:21 – 00:02:12:06
Philippa White
Much for joining us. It’s so nice to have you with us today. How are you.

00:02:12:15 – 00:02:14:04
Rick Wheatley
Doing? Really well. It’s great to be here.

00:02:14:05 – 00:02:20:08
Philippa White
So I’m looking at your your mountain house. You’re obviously up in the mountains. Where are you?

00:02:20:09 – 00:02:27:05
Rick Wheatley
Yeah. Okay. So I’m in Ruka in Norway, which is two and a half hours directly west of the city of Oslo.

00:02:27:06 – 00:02:27:22
Philippa White
Okay.

00:02:27:24 – 00:02:47:18
Rick Wheatley
Yeah. And if anybody’s ever seen that that heavy water World War Two Netflix series, right, when the Germans were trying to manufacture an atomic bomb or a nuclear bomb, they were they were sourcing material from here. So this was it was a World War Two movie with some fancy old World War Two era actors in it. And then there’s a more recent one on Netflix.

00:02:47:19 – 00:02:50:01
Rick Wheatley
So it all it all happened right out here outside the window.

00:02:50:04 – 00:02:53:07
Philippa White
And I saw you post the other day that you were going through.

00:02:53:14 – 00:02:55:00
Rick Wheatley
Exactly. Yeah. I was up there with.

00:02:55:02 – 00:03:01:08
Philippa White
We explained that everything your house must be like built into the rock.

00:03:01:08 – 00:03:06:20
Rick Wheatley
No, it is. It’s a standalone house. But, you know, looking out the window here, most of the buildings have grass on the roof.

00:03:06:21 – 00:03:07:24
Philippa White
How extraordinary.

00:03:08:00 – 00:03:17:15
Rick Wheatley
It’s just a Norwegian Norwegian tradition. And, you know, you just get up there every late August, early September, and just knock it all down. It stays in better shape the next year.

00:03:17:16 – 00:03:25:13
Philippa White
So home made when in Rome? Yeah, right now your accents obviously not Norwegian. So talk to us about your background.

00:03:25:14 – 00:03:44:04
Rick Wheatley
I’m originally from Vermont in the northeast of the U.S.. Bernie Sanders and Ben and Jerry’s country. And Burton snowboards, too, by the way. Yeah, fewer people understand that. Right? So I grew up there until the age of 22, I guess, went to university there. I went to a small university, military university, was in the Army for four years.

00:03:44:04 – 00:04:04:18
Rick Wheatley
I did some army time in in South Korea and then on the West Coast of the U.S., which was which was interesting for I mean, I was 22 years old, second lieutenant showing up in South Korea, which was a place where I felt like the the third world in the first world, where like wall to wall, South Korean teenagers were proximity dating on telephones in 1998.

00:04:04:22 – 00:04:06:11
Philippa White
Wow. Really?

00:04:06:21 – 00:04:15:00
Rick Wheatley
I had these little programs. And when you got close to somebody in a mall or someone who was looking for somebody like you, then a little light on the antenna would start to blink.

00:04:15:12 – 00:04:17:18
Philippa White
Oh, my God.

00:04:18:09 – 00:04:40:09
Rick Wheatley
19 people. And in 1998. Right. So when I when I left the U.S., I don’t think I even had a cell phone. And then when I got to South Korea, I was promptly given one by a local fixer out in the village. Right. So, so that was really cool. So I, I was there for four years then was recruited out of the military by an IT firm that Ross Perot owned.

00:04:40:09 – 00:04:59:10
Rick Wheatley
At that point, he was always gathering young officers. I left the military because I felt one. There wasn’t a lot going on, too. We were training for things that seemed like they were never going to happen. Obviously a lot has happened then and people that I was in with have experienced many things that I feel fortunate to not have under my belt at this at this stage.

00:04:59:13 – 00:05:24:03
Rick Wheatley
Now, I worked in it for a while in the health care sector and did that in Southern California for three, three and a half years or something like that. And just thought this business stuff is interesting, but I don’t know if I want to do the grind and so cal on eight lane in both direction highways and so I was spending a lot of time skiing and mountain biking in my free time and fell in with a group of telemark skier, bad actor types who would go to the Alps every year.

00:05:24:06 – 00:05:50:16
Rick Wheatley
And so I got involved with that trip and my mind was blown by the Alps. I mean, the mountains in North America are amazing. But there’s there’s something about the Alps that are really unique in the, you know, the history and albinism and skiing and all this stuff that exists there. And it was either in my second or third year going to the Alps that I met the woman that I would marry from Oslo, had Swedish originally, but had moved here when she was a teenager because of a job her father had gotten, were no longer married, were were very good friends.

00:05:50:16 – 00:05:58:18
Rick Wheatley
But we have three pretty awesome kids. Yeah. One who’s probably going to end up down here at some point asking me what the hell I’m doing and.

00:05:59:09 – 00:06:05:13
Philippa White
I look forward to meeting her. I mean, I’ve seen so many pictures. The these are going to grow up through social media. Yeah.

00:06:07:00 – 00:06:16:10
Rick Wheatley
Yeah. So that’s sort of that’s sort of how things got started. I thought I was going to be an army officer. I thought that was what I was going to do. And then I was spending all my free time climbing and skiing and beach in the mountains.

00:06:16:12 – 00:06:19:15
Philippa White
And you’re now also a sailor, if I’m not mistaken.

00:06:20:10 – 00:06:34:03
Rick Wheatley
Yeah, I am. You know, and that was that was also by mistake. When I moved to Norway in 2003, it was really difficult to get a job without speaking Norwegian back then. And so I ended up working for a professional sailing team for a couple of years.

00:06:34:05 – 00:06:36:09
Philippa White
Oh, my gosh. Really? And this is before you sleep?

00:06:36:13 – 00:07:02:07
Rick Wheatley
Yeah. As a Boy Scout, I had, you know, sailed lasers and weird stuff like that, right? A little bit, yeah. My brother in law and my then brother in law was good friends and worked a bit with a guy named David Frost who was a Olympic sailor, maybe Olympic windsurfer, I think, and had later done the Volvo Ocean Race a few times, did it as a skipper twice, and then actually sailed on Brazil one once or twice with Torben Grill.

00:07:02:13 – 00:07:13:15
Philippa White
Yeah, I know. Yeah, I know Torben and actually Google and he sailed against him. He beat that. Anyway, he beats Torben. It’s a it’s actually quite, it’s quite a name but anyway. Yes, I know Torben and Lars interest.

00:07:13:15 – 00:07:32:22
Rick Wheatley
Okay. Right. So, so Knute spent a lot of time sailing with Torben small world. Right. But that project was a almost 60 trimaran. So these French trimaran that have 400 square meters of sail and go like 30, 40 knots. Right. Amazing, amazing boats. This was before foils. So these things sailed. Yeah. On the water, not above the water.

00:07:32:22 – 00:07:45:21
Rick Wheatley
And I did logistics stuff for them and got involved in a company that Newt had started with my brother in law. And then I eventually became a part owner in that company. And the idea was to do leadership and team stuff.

00:07:46:09 – 00:07:47:19
Philippa White
On the boat. Yeah.

00:07:48:02 – 00:08:04:12
Rick Wheatley
Very cool. But if I’m honest, at the age, whatever age I was at that stage, I didn’t know anything about what I was doing right. So I had a great idea, but I was really a bit too inexperienced to pull it off, so not much came out of it, but I did have the opportunity to do a little bit of transport sailing with those guys.

00:08:04:12 – 00:08:19:21
Rick Wheatley
That’s what opened my eyes. Wow. The ocean, the speed, the force. I remember one time we had clients with us and canoe gave me the tiller. We were sailing in the inner Oslo fjord, like right, right in the city, basically. And we were going 28 knots.

00:08:20:01 – 00:08:21:11
Philippa White
Oh, my God. Really?

00:08:21:11 – 00:08:42:00
Rick Wheatley
Water was the water was totally flat, right. And and so this person steering is up here right out of the water, maybe two meters out of the water. And he was sitting just on the other side of the tiller from me. So that he could grab it and save the day if I did something stupid. And he looked at me and he probably said this to everybody who’s ever been at the tiller going fast on that boat.

00:08:42:00 – 00:08:59:03
Rick Wheatley
He said, I’ve gotten so many tickets that if the police focus over here, it’s on you, right? So so some great memories with those guys. And when I stopped working with them, I knew at some point I want to do this myself, obviously on a very different scale. So we have a nice little cruising boat and it’s great fun.

00:08:59:11 – 00:09:15:01
Philippa White
It’s interesting that you talked about the sailing and it was sort of leadership development kind of stuff then, but too young, you didn’t really understand what that was about, but you then did get into leadership development. That’s actually what you did. It’s a big part of what you did. Maybe you can talk to us just about that journey.

00:09:15:01 – 00:09:37:12
Rick Wheatley
I started a hell of a learning journey, I guess you could say, when I started working with Newt and that team and with my brother in law, Max Repair, who is also in the space. So he was a great mentor and they both introduced me to, I guess to a network of much more experienced people. So I was I was a second or third chair on leadership development programs for, I guess, four or five years.

00:09:37:12 – 00:10:04:08
Rick Wheatley
At that point, I basically followed these more experienced facilitators and consultants around for a number of years, doing little bit parts in these programs, and then over time learning more and doing more. Until 2008 or nine, I started designing and delivering some smaller versions of those things myself. But I mean, I had the opportunity to, to learn from some absolutely amazing people and a lot of this stuff was human potential movement.

00:10:04:08 – 00:10:23:05
Rick Wheatley
Iselin, Santa Cruz inspired stuff. The first programs that I worked on were very self-awareness oriented. You know, these were the sorts of things where people cry on Wednesdays and our superheroes by Friday sort of thing, you know, like these sort of deep awareness oriented programs, which was which was really eye opening for me. So in the beginning of those things, I was pretending as hard as I could.

00:10:23:05 – 00:10:32:02
Rick Wheatley
Like I one knew what was going on because the language wasn’t always necessarily one that I understood and two was comfortable with what was going on. But it was a hell of a learning opportunity and learning journey.

00:10:32:04 – 00:10:52:14
Philippa White
And just reflecting on what you now know about leadership development and also how you see the world and the direction that it’s going in and just how it is now. And we talked about this a little bit on the phone the other day. When you look at vertical development and the leadership competencies that are needed in today’s world, what can you say about that?

00:10:52:15 – 00:11:17:24
Rick Wheatley
The first seven, seven or eight years of my experience in that were very sort of inner journey oriented self-awareness and, you know, developmental psychology and those sorts of things. Like if you can become truly aware, then you can become a better leader. I do believe that’s true. The nine years that I spent after that, I joined a company after that and and did a lot of this work, but from a very different perspective, it was from almost a purely intellectual.

00:11:18:00 – 00:11:38:07
Rick Wheatley
The result of all of that experience when you put it together is there’s a really interesting symbiosis between what needs to be true on the inner side and on the other side. You know, we always used to say, like, the development experience is what we’re trying to design for. People are designed so that we take people to the edge of their mental model or their mental map and we nudge them.

00:11:38:07 – 00:12:05:06
Rick Wheatley
All right. So that’s like a horizontal version of what we talk about when we say vertical development, right? So there are we were working on on a design yesterday for a program we’re doing for IKEA right now where we’re spending a lot of time talking about the difference between adaptive and technical challenges. The nature of the world today is such that its complexity overwhelms our ability to deal with the complexity, given the way that we think and are at the moment.

00:12:05:06 – 00:12:27:00
Rick Wheatley
Adaptive challenges require the leader and the organization and the team and the person to actually change in order to be useful against the challenge. If you operate something of a certain size and you’ve sort of come up through the levels and you’ve learned the different pieces of it, and you get to a management for a leadership position of that organism where you truly understand it.

00:12:27:00 – 00:12:58:02
Rick Wheatley
You can be quite an effective manager or a leader, but in a global organization today, it’s very likely that at some point your vertical rise in the organization is going to outpace your ability to understand all the pieces and parts. And I think that’s an interesting it’s almost like a molting that a leadership needs to go through and you need to completely, really see the need that you’ve had to have control of and understand all of the elements and adapt to completely new way of being and thinking about reality.

00:12:58:02 – 00:13:16:06
Rick Wheatley
That’s a pretty intellectual thing, actually, but it has very many psychological underpinnings and components in order to be able to do that thing intellectually. That’s one aspect of it. But there’s there’s two other things that I think are interesting to add to it. One is I went to this climate reality training that Al Gore and his organization put on in Istanbul a number of years ago.

00:13:16:06 – 00:13:33:04
Rick Wheatley
And he mentioned that we have three budgets. And the one that I mentioned is, is the emotional budget. We have only so much capacity for bad news or things that we’re uncomfortable with. That’s a factor in leading change or in leading organizations. People are very motivated to look away from things that they either are overwhelmed by or just don’t like.

00:13:33:08 – 00:13:52:23
Rick Wheatley
Very prevalent in the world today, obviously, that’s that one factor is driving a lot. And then there’s a third thing, right? So the third thing is cognitive bias. And I would put that in a slightly different bucket than just not wanting to look at the negatives, the amount of pre programing and cognitive bias that exists in the leadership situations that many of us find ourselves in today’s huge.

00:13:52:23 – 00:14:16:24
Rick Wheatley
And there’s obviously many, many types of it. But when you go back to sort of the root of your question, vertical development and leadership, given the state of the world today, all of these things are playing a role and it makes it a really, really complicated environment to operate effectively in. And then you add on top of that, if we are to be successful, we need such an amazing degree of pretty high level multi-stakeholder collaboration.

00:14:16:24 – 00:14:18:19
Rick Wheatley
WinWin thinking, etc., etc..

00:14:18:21 – 00:14:25:23
Philippa White
So that brings me actually beautifully to System seven. I’d love to understand more about it. So how did it come about? What is it that you do?

00:14:25:23 – 00:14:45:15
Rick Wheatley
In my last role, where I worked with an absolutely amazing group of people, I had the opportunity to spend four or five years being sort of a challenger for an oil and gas company that was trying to understand if it should go greener or not. I had the opportunity to do some really interesting work with senior folks in Unilever and some other organizations.

00:14:45:15 – 00:15:05:21
Rick Wheatley
And one of the reflections that I had after doing that for several years was I think it’s pretty impactful working at this level, but I would also really like to be working with the investor level because very often we find limitations inside the businesses based on what the investors are willing to tolerate fund based on how much risk they’re interested in, you know, accepting, etc..

00:15:05:21 – 00:15:23:04
Rick Wheatley
Two years ago I started a conversation and with a, an investor named Rainier Indoor who was actually introduced to be made by Canoe many years ago. And I did a quick project with Rainier and a previous private equity firm that he was part of all tours during that phase where I was sort of young and learning the ropes, as it were.

00:15:23:04 – 00:15:48:16
Rick Wheatley
He’s since started a private equity firm called Suma Equity, whose investment thesis is around investing to solve global challenges. So it’s an ESG oriented, sustainability oriented, private equity firm. They have three funds under management. The last one that they closed late last year is ‚Ǩ2.3 billion. It’s an Article nine Impact Fund as well. So they’re actually obligated to make sure that they place that in a way that is very impact aligned.

00:15:48:18 – 00:16:08:21
Rick Wheatley
So System seven was created based on a project idea that Rainier and I had, which was around how can we accelerate the sustainability strategies and performance of companies that some of us the name is a bit weird but chosen on purpose. We’ve done so much work with systems thinking over the years and we live in a world of overlap being intertwining systems.

00:16:08:21 – 00:16:25:15
Rick Wheatley
So that’s something that we wanted to take with us. And then we’ve also worked with very many leaders that regardless of the fact that we live in a very systemic environment, want to simplify every complex thing into a list of three points. We picked the number seven because seven is like just slightly too many things to hold your mind at one time.

00:16:25:15 – 00:16:30:11
Rick Wheatley
Yeah, and that’s the reality that we live in. So we just put Systems and seven together.

00:16:30:11 – 00:16:32:10
Philippa White
And I’m like, Yeah, that’s nice. I like.

00:16:32:10 – 00:16:56:16
Rick Wheatley
That. We are absolutely engaged in leadership development. We are engaged in helping leaders build fluency in the sustainability and ESG space, and we are engaged in helping them think creatively about what impact could be for their organizations. Our experience is that when people think about sustainability and ESG, they take a space that’s this big and they think about a space that’s this large.

00:16:56:16 – 00:17:15:18
Rick Wheatley
They often take what’s a pretty expensive canvas and reduce it to carbon emissions that completely misses out on the social piece. So they do two things. They think about carbon emissions, and then they think about things that are within their own boundaries, within the boundaries of their own organization. Thinking about how to change things within the boundaries of our organizations is not going to change the world.

00:17:15:20 – 00:17:46:04
Rick Wheatley
It’s going to help us do some housecleaning, which we should do. But thinking about how we can reorient our organizations to solve environmental and social problems and governance problems that others have is where we can change the world. And the governance piece has been a bit of a dark horse. I think when you look at how a due diligence might be done on an investment case by a sustainable investor, they’ll often look at the E and the S inside the company and maybe slightly outside of the G will be purely inside diversity, equal pay for equal work.

00:17:46:04 – 00:18:13:12
Rick Wheatley
So let’s look at gender balance on your board and in your leadership, those sorts of things. Right? But what we’ve seen over the past several months with this war in Ukraine is that governance in government is, in fact, a really, really important thing that business needs to have a position on. Are you in support of policies industry organizations, chambers of commerce, etc., that are advocating for peace, the rule of law, human rights and all of these sorts of things?

00:18:13:13 – 00:18:32:09
Rick Wheatley
Or are you telling yourself a bedtime story that you’re a business? You’re too small to have a view on that. It’s none of your business. If you’re the second you could find yourself in some at some point in a situation like this happen in Ukraine where suddenly governance falls apart and governance in Ukraine has not fallen apart. They’re proving themselves to be superheroes at this moment.

00:18:32:09 – 00:18:55:04
Rick Wheatley
But global governance, multilateral cooperation, the United Nations peace and the rule of law, etc., is vital to healthy businesses and healthy societies. So we’re trying to help business leaders take a more expansive view on what ESG is and how they can play. So that’s the third thing. We’ve built an impact map together with Suma, which sounds incredibly boring, but I think is actually quite exciting.

00:18:55:04 – 00:19:28:10
Rick Wheatley
The impact space is large. Any time you go into a new area that you’re unfamiliar with, whether it’s in the mountains or on the ocean, you’re probably going to bring a map. So we’ve created a map for the impact space. It’s been a little bit inspired by the scopes of emissions from emissions tracking. What we’ve tried to help businesses do is having conversations with businesses where you say, like, I know that you’re doing this thing here, but if you’re able to expand the way that you think about that and understand what value might created be created for other commercial partners that you haven’t thought of, if you do a good job at that, you could

00:19:28:10 – 00:19:39:15
Rick Wheatley
have impacts that are actually even further out and are at a societal level. And don’t forget, the result is that an industry standard has been created and that industry standard can then likely be transferred to other markets.

00:19:39:16 – 00:19:49:23
Philippa White
Can you give us a quick story how you would work with IKEA or how you would work with a private equity firm? From a leadership development point of view.

00:19:49:23 – 00:20:12:15
Rick Wheatley
One of the things that we’re doing is we are doing leadership programs who we’re building in an adventure element. We’ve had a couple of examples of that over the past few months. We’re doing some some programs for P.E professionals where the first module, which is close to home, doesn’t take too much time, is focused on some self oriented stuff, some of its self self-awareness, some of its sort of personality preferences driven, etc..

00:20:12:15 – 00:20:40:14
Rick Wheatley
Right. And then the second modules team oriented, you know, this team session needs to be one where you get pushed off the map gently. If needs to be something that’s physical, it needs to be something with a high degree of nature content. Third week of August, we had a group of professionals from a PE firm all at the same level, a community directors staying at 2800 meters in the Alps at the foot of an absolutely amazing glacier in the summer, where more glacier melting has happened than I think is on record.

00:20:40:14 – 00:21:05:01
Rick Wheatley
Right. And we did a mix of sessions where we talked about team dynamics and what builds high performance teams, one of which interestingly, is shared consciousness, which just like means like being in the same mental space together and cultivating that over time. And obviously being up there at 2800 meters without any coverage gives an experience of that, of being someplace special, of being there together, of not being disturbed, having some mental space.

00:21:05:01 – 00:21:19:18
Rick Wheatley
And then the other thing that we did is we took them. None of them were experienced on this and did some alpine climbing. Alpine rock climbing. So we had three, three professional mountain guides with us. Two of them are geologists and specialists in glacial melting and climate change and things like that and have done Seasons eight.

00:21:19:23 – 00:21:20:04
Philippa White
Wow.

00:21:20:08 – 00:21:41:04
Rick Wheatley
So lots of that sort of content, right. And then we pushed ourselves off our map and got pretty high up on some pretty jagged, jagged ridgelines and climbed around and tested ourselves physically and mentally and did that as teams. So that’s an example of something where investors and private equity folks, they work probably harder and more intensely than many other professions that I’ve dealt with in the past.

00:21:41:04 – 00:21:55:24
Rick Wheatley
And when you’re working with capital, with investment, I think a lot of these people have more influence on our future than they realize getting them away and really creating that headspace, reconnecting with the natural world. We had another group of them crawling around in the caves under Budapest a few weeks ago, right?

00:21:55:24 – 00:21:56:05
Philippa White
Yeah.

00:21:56:09 – 00:22:14:22
Rick Wheatley
So doing some basic stuff that humans do when they’re growing up, that’s something that we’re trying to bring to the leadership development space. Leadership development is what it is. There’s maybe not actually a lot of variation in best practice today, but I think the way that it gets done, the surroundings and how you create space for it is probably a forum for innovation.

00:22:14:22 – 00:22:34:11
Philippa White
Totally agree. Now you obviously work in the area of you talk a lot about ESG as you just talked about it. I’d love to post that you posted it probably nine months ago, I guess questioning the relevance of ESG and how when the same ESG reporting suggests that Exxon Mobile is a leader in ESG is. How can we trust is chase?

00:22:34:16 – 00:22:37:08
Philippa White
What does that even mean? Yeah. What is your opinion on this?

00:22:37:08 – 00:23:01:11
Rick Wheatley
When ESG first came about, there was version one and there was version two. Version one was about protecting investments and investors from risks that came from environmental risks, social risks, and government risks. Right. So that’s not about protecting the world. That’s about protecting the money. That’s how it started. When that example with ExxonMobil and Tesla, it was a Moody’s ranking or something like that.

00:23:01:11 – 00:23:27:00
Rick Wheatley
Right. ExxonMobil is doing a better job of protecting itself from ESG risk than Tesla’s. So just hold that thought version two of ESG is how companies are helping to protect society from risks and the environmental, social and governance space. And there you could say that while ExxonMobil is providing energy to society that society uses, they’re doing all kinds of other things.

00:23:27:02 – 00:23:48:15
Rick Wheatley
And they persist in the lobby and they do all manner of things to protect their profits, but in a way that actually exacerbates risk to the environment, society and governance planet. Right to the planet. Right. Whereas, you know, Tesla’s arguably doing some other things that are really, really impressive for the future. That’s, I think, super interesting. And that’s the problem with ESG in a way.

00:23:48:15 – 00:24:01:17
Rick Wheatley
It’s about protecting the money. Then we’re going to protect the money to our detriment. I always say the planet’s going to be fine. The planet doesn’t care, we won’t be fine. The rest of you know, the animal kingdom won’t be fine. That’s what we’re trying to protect.

00:24:01:20 – 00:24:37:02
Philippa White
Yeah. So then that brings me to a few of my sort of big, meaty questions. How do we make ESG is not just a box ticking exercise one and two. How do we make it not just about protecting the money? And how do we make this more of a real thing that is about real, tangible action? It’s something that I get really frustrated by because really our projects and all of our programs are made with constraints at the core, and the difference that we are able to make is massive.

00:24:37:05 – 00:25:04:17
Philippa White
And I just think, Christ Almighty, these companies have so much money and there’s so much that they could do and they’re not. And so and obviously we’re at a moment right now that the world hangs on the precipice of change. And there’s obviously this now unique economic climate in the wake of a pandemic, we’re seeing inflation, high cost of living, vulnerable client growth portfolios, you know, the growth of technology and challenges to established corporate concepts.

00:25:04:17 – 00:25:26:01
Philippa White
And it’s all colliding with this new situation and it’s accelerating the creation of a new global status quo. There’s a lot going on and I’ve heard people talk about purpose is impossible in this current climate, just can’t be the focus. ESG, we’re going to focus on them, but they’re just going to turn into a box ticking exercise because to be honest, we really can’t focus on much more than that in this current climate.

00:25:26:01 – 00:25:30:03
Philippa White
And I just wonder, what are your thoughts on this?

00:25:30:03 – 00:25:58:15
Rick Wheatley
Yeah, I mean, I don’t know why, but for some reason, over the last few days in my feeds, there’s a lot more Lord of the Rings material, you know, like a lot more saving middle Earth material. And the reason I mention that is because, like, we are sort of a little bit in a situation like that. We’re at a point in time where either we really get serious about the future of humanity and all of the natural systems that we rely upon or things are things are going to go quite badly.

00:25:58:15 – 00:26:16:01
Rick Wheatley
You know, I spend a lot of time thinking about the leadership that happened in the World War Two era, the Marshall Plan, like all of these things that were actually quite long sighted and visionary. Right. And really shaped the next generation of progress. And I wish we had more of those types of leaders around us today. Something’s happened to us.

00:26:16:01 – 00:26:40:09
Rick Wheatley
I think it’s pretty clear. I’m worried about that. You know, last week in a session, I put a slide up that had a picture of a snapshot from Hamilton the musical on it. And there was a quote, You stand for nothing, brr. What will you fall for? So, you know, this purpose piece is absolutely critical. And one of the things that we spend all of our time working on, despite that second pillar that I talked about before, people can’t handle that much negative.

00:26:40:10 – 00:26:59:13
Rick Wheatley
We spend all of our time trying to help people relate to whether it’s here or a summer suit, companies, etc., that we’re working with relate to the reality of what’s happening in the world. And then we try to imagine how we could expand the responsibility that we have while while still being a business. There’s one thing that I think is hopeful.

00:26:59:13 – 00:27:18:16
Rick Wheatley
It’s not hopeful, but at the same time it is. And that is 15 years ago working in this space, we talked about risks that were going to emerge sometime over the horizon, but we didn’t know when. One of the things that’s happening in real time around us right now, Hurricane Ian, not to mention what’s happened in Pakistan over the past six weeks, that is much larger in scale and human suffering.

00:27:18:16 – 00:27:44:18
Rick Wheatley
These risks are materializing right now and they’re having geopolitical ramifications, environmental and humanitarian ramifications right now. I see in the businesses that I’m working with, increased recognition that we’re no longer talking about something that we’re trying to protect ourselves from in the future, that it’s right here, right now. And I think there could be like a bit of a morphing happened where happening where they may say what you just said, we don’t have time for purpose right now.

00:27:44:18 – 00:28:00:07
Rick Wheatley
But these issues move center stage because it’s happening around us right now. It either has a new name or it has no name. It just becomes our new reality. We have to do different things as a result. I’m a little bit hopeful about that. You know, we had Biden and DeSantis traveling around Florida over the last couple of days.

00:28:00:07 – 00:28:26:22
Rick Wheatley
Right. Which is a rather unexpected thing without it takes a major hurricane for that to happen. Obviously, the ability of certain groups, of primarily populists to hoodwink the population, that what’s happening outside their window is not happening is is limited. I hope so. Right. And then I think what’s also fortunate is that ten, 20 years into this journey around sustainability and and ESG, you know, the honest fact is nobody knew how to do this stuff when we started it.

00:28:26:22 – 00:28:51:08
Rick Wheatley
So there’s 10 to 15 years of learning that’s happened and there are starting to be more and more good examples of companies that have created successes. Right. I am hopeful about that. In a session last week, we used that map to share a Tesla story and then we overlaid it with a local company. And you see some some leaders in the audience say things like, I didn’t realize that we were allowed to be visionary about the impact our businesses could create and to be creative about it.

00:28:51:08 – 00:29:05:23
Rick Wheatley
I thought that we were supposed to focus on the carbon, and I understand why they say that, because that’s where things have been for a long time. Right. But when we expand the playing field, it makes it possible for lots of people to do other things. Not every company is an oil and gas company. Not every company is a car company.

00:29:05:23 – 00:29:14:00
Rick Wheatley
There’s many companies who actually don’t have a huge amount of negative impact to mitigate but have huge potential in terms of the positives that they could do.

00:29:14:01 – 00:29:29:08
Philippa White
So creating agency for people. And that’s the that’s yeah, that’s where we work. Right. And I think that’s the power in itself that I mean what you just said is so incredible. If people suddenly realized that I can be the driver of change. Well, hold on a second. So, yeah, I can use my ideas and I can be a driver of change.

00:29:29:12 – 00:29:35:19
Philippa White
Yes, yes, yes. That’s actually totally. You are our saviors. We just need more people to realize it.

00:29:35:19 – 00:30:01:24
Rick Wheatley
You know, I had another CFO come to me and say, hey, you know, if we can talk to our team in this way, it would really inspired because, you know, one of the things that’s negative about ESG is that it’s become a paper trail. Yes. So reporting driven, when you have small companies that have limited carbon emissions being overwhelmed by reporting requirements, it means that they don’t spend much time on what they could be doing with the businesses that they operate that would benefit in either the either the environmental, social or governance space.

00:30:01:24 – 00:30:07:02
Rick Wheatley
Right. So we’re consuming all of our energy on activities that maybe don’t generate much progress.

00:30:07:02 – 00:30:27:21
Philippa White
That’s fascinating. Which is also why it’s a huge reason why knowing that the ideas and the drive for change can come from so many different places, unlocking that and are you seeing the energy in the right areas? And then the question is back to the two ways of ESG is if it is just a box ticking exercise and if it is saving our money, well then they actually don’t care about the power of the individuals.

00:30:27:21 – 00:30:42:06
Philippa White
But if you really are interested in the second option of ESG is, then you can’t do it alone and it’s not going to be the CEO doing that either. It’s going to be the people who are driving these companies, within these companies that are coming up with the ideas, that are finding the solutions they need to feel empowered enough.

00:30:42:06 – 00:30:52:06
Philippa White
And then that’s the things back to what you do and what we do, which is helping people realize what they can do and then helping them see the world and themselves in a different way to be able to drive it.

00:30:52:10 – 00:30:55:08
Rick Wheatley
Exactly. And that’s really the heart of it. That’s brilliantly synthesized.

00:30:55:10 – 00:31:24:12
Philippa White
So another quick question, because you are talking to many of the companies that are thinking of net zero, which is another another big one. Right. Corporate and company leaders are talking in agreeing about the importance of net zero. And this is something we’ve been talking about for a really long time. You know, we know we need to act now, but the collateral impacts of net zero or absolute zero need to be carefully assessed, because in this current climate that we’re in, climate, environmental issues, is it possible to solve them in a world that’s in recession?

00:31:24:12 – 00:31:41:19
Philippa White
And then do we need growth to be able to get to net zero, to be able to figure out what those solutions are? Do companies have a responsibility to enforce net zero? You’ve been working in this area for a really long time. I mean, I have opinions on it and have opinions on how to get there, some of which we’ve just talked about.

00:31:41:19 – 00:31:52:19
Philippa White
But I’d love to know your thoughts on all of this, because this is also a bit of a hot topic. You know, I don’t believe that people even know what to do. So it’s a bit kind of deer in the headlights. I don’t know. Do you know? I don’t know. Do you know? Well, let’s just wait it out.

00:31:52:19 – 00:31:55:00
Philippa White
But we can’t wait it out because we can’t wait it out.

00:31:55:00 – 00:32:29:17
Rick Wheatley
So, yeah, one of the reasons for the crisis in Europe right now is because they didn’t go net zero fast enough. The reason that Europe is exposed to expensive fossil fuels or cares that Russia has cut off those gas pipelines underneath the Baltic Sea is because Europe hasn’t gone net zero fast enough. Borrowing energy from 40 million years ago and transporting it up from the depths in a physical form that either needs to be piped or barreled right or brought on tankers and is very heavy and very dense around the world is not a particularly efficient way to do energy.

00:32:29:19 – 00:32:48:00
Rick Wheatley
Even in Norway right now, which is pretty far north, there is a solar revolution happening right now because people recognize that the closer that I can move to the point of energy collection to myself, the more control I have over it, the more I can insulate myself from the sort of energy price volatility that’s happening in Europe right now.

00:32:48:06 – 00:33:09:21
Rick Wheatley
It’s completely unbelievable what’s happened with energy prices going net zero because it’s good for the climate is not the only reason we’re going to be going net zero. Decarbonizing our energy system is also an incredibly smart geopolitical move because we insulate ourselves from factors that we cannot control. We have over the last 15 or 20 years, though, have been on a huge technology journey.

00:33:09:21 – 00:33:32:07
Rick Wheatley
And at the beginning of that journey, technologies that were required for this were combination of not efficient enough and too expensive. But, you know, the efforts of Germany in the beginning and then China have done wonders for the solar panel cost curves. I mean, the efforts of Tesla and others on the battery front, we’re at a point now where it’s much less expensive than it has been to invest in these sorts of technologies.

00:33:32:07 – 00:33:54:13
Rick Wheatley
And I think the wave of investment that’s going to happen right now in different parts of the world because of this energy price volatility and this conflict in Europe is going to push a lot of that stuff down further. That’s not going to solve the problem, but I think that’s going to help. The other thing that I would say is you’ve probably heard about all kinds of companies and countries making net zero commitments and then there’s been some really good stuff.

00:33:54:13 – 00:34:15:11
Rick Wheatley
Okay. So there was a letter, this is probably nine days ago now from the New York City comptroller to BlackRock to Larry Fink, the CEO of BlackRock, one of the biggest investors in the world, saying you spoke very loudly about all these commitments that you guys were making about net zero and all manner of other things. But we see relatively little progress toward those commitments.

00:34:15:11 – 00:34:34:20
Rick Wheatley
We need to be super careful about confusing commitments with action. So there’s been a tremendous amount of greenwashing where people have been making commitments but going no further. So that’s another thing that we need to really be paying close attention to. I think that’s very much on the agenda for the FCC and for governments these days. We’re seeing investigations into corporations that have been doing those sorts of things right.

00:34:34:20 – 00:34:56:19
Rick Wheatley
So there’s a gentleman that spoke a sumo event last week named Tariq Fancy, who used to lead sustainable investing for black and who quit and then who wrote a series of blogs that are just absolutely amazing for anybody who’s interested in. Oh, well, he made a couple of interesting points that I think are relevant to share. One is there’s been so much energy and activity spent talking about commitments and targets.

00:34:56:19 – 00:35:17:06
Rick Wheatley
It’s given people a false sense of how much progress is happening around us. But the fact of the matter is that there’s entirely too little progress happening, a lot of commitments being made, but those are essentially marketing I think we’re going to see here in the near future a real split between who’s serious and who’s just making forward looking marketing statements, basically in the form of climate commitments, etc..

00:35:17:22 – 00:35:38:00
Rick Wheatley
So it’s a bit of a come to Jesus moment in the whole space to be honest with you. And that’s overlaid with, as you said, recession and potentially inflation conflict. All of these things are coming to a head. I wonder if that creates a bit of an opportunity too, because Pakistan ridiculously hot summer in Europe, drought, hurricane in, etc..

00:35:38:00 – 00:35:52:24
Rick Wheatley
Right. All of these things are still happening. Wildfires is all over the world. So it isn’t like these things are going to stop because we’re having a recession. So we’re going to have to dig ourselves out of this hole in a way that also helps us with regard to some of these risks. Yeah, I really do feel that that would be unavoidable.

00:35:52:24 – 00:36:04:19
Rick Wheatley
And what you saw with DeSantis, when he has a hurricane in his own state, it is necessary for him to tone down the shit talking. He’s doing because he finds himself in a reality that doesn’t it doesn’t match what he’s saying.

00:36:04:19 – 00:36:32:05
Philippa White
I see two things. I see one, but necessity being the mother of invention. And then I think to the greenwashing and the purpose piece, I think it comes down to, it could just be about commitments, it could just be about saying a whole lot of stuff. But to be honest, the people working for you are going to know and it’s going to come out in the wash eventually showing who’s actually doing things like Patagonia, who actually is standing for something and it’s I don’t believe that purpose goes away in a recession, actually.

00:36:32:05 – 00:36:44:15
Philippa White
I think it becomes even stronger at moments like this. I think you’re right, companies that are really properly standing for something and then those are the companies that people want to engage with, want to invest and want to. The question is whether it all happens quick enough.

00:36:44:15 – 00:37:02:00
Rick Wheatley
You know, I mentioned that World War Two generation thing. One of the things that probably made them as effective as they were was that they were faced with some really large challenges that they had to tackle. One of the features that we’ve had since World War Two is that with the exception of a couple of blips, things have just gone gangbusters.

00:37:02:00 – 00:37:22:00
Rick Wheatley
And that’s meant that fewer and fewer great people have gotten involved in government. It’s been a lot of collective enrichment going on, so a real reality check might thrust us into a different reality now and then. It’s an adaptive challenge, right? So it’s going to be a question about whether or not we are all able to evolve into what we need to become to deal with this.

00:37:22:00 – 00:37:27:03
Rick Wheatley
Or if we continue to sit here on our phones and look at tick tock and do other do other things.

00:37:27:06 – 00:37:48:06
Philippa White
That’s why I just think what we’re doing, both of our work is so important right now because it’s the moment where we need to help people respond to be more resilient, respond to these challenges, you know, putting people on mountains or sailing in a boat or, you know, all of these different challenges and, you know, being the way that tie works as well, I think it’s about getting people to see.

00:37:48:06 – 00:38:06:15
Philippa White
Yes, see themselves and see the world in a different way and then to feel, to respond to really the more actually we’re talking about it, the more I just realize this is a huge part. This is a huge competitive advantage for companies that actually realize that giving agency to their people and giving them the power to rise up is actually the answer, I think, to a lot of us.

00:38:06:20 – 00:38:23:11
Rick Wheatley
Yeah. I mean, I’m a little bit a little bit humble there. Right. So we’re trying and we’re doing our part. And I think it’s like unfolding and we’re learning all the time. Yeah, but we’re committed to continuing to learn how to do what we need to do to be useful as folks try to do that.

00:38:24:09 – 00:38:35:18
Philippa White
Well, you and I have spoken a lot about Tai over the years, and obviously both of us working in leadership development. We’ve kind of covered this. Now, why in your mind are initiatives like this that important?

00:38:35:18 – 00:38:49:04
Rick Wheatley
There is something super healthy about overwhelm a system. That’s one of the ways that you force an evolution. You overwhelm the old system. It just gets so overwhelmed that the old way of being becomes obviously very useless.

00:38:49:04 – 00:38:49:09
Philippa White
Yeah.

00:38:49:20 – 00:39:16:09
Rick Wheatley
And then things. And then things start to happen, you know. Yeah. I think that’s part of this game in micro and macro ways. Yeah. Probably for both of us, right. Yeah. It’s interesting. I was doing this one program with a client several months ago and they had a pretty good portion of the people in the program were leaders from Russia our initial sessions were before any of this happened and we were talking about adaptive challenges and we were talking about the difference between complexity and complicated.

00:39:16:11 – 00:39:30:16
Rick Wheatley
And I think for them at that time it felt a little bit academic. So my hope is that we’re putting some stuff in people’s toolboxes that maybe feels a little bit academic when they get it, but then at some period of time, a little bit after, they’re like, Shit, I’ve got that thing in there somewhere. Where is it?

00:39:30:16 – 00:39:46:03
Rick Wheatley
And they put yeah, they use it. So maybe that’s like two different parts of this. One is like opportunities to immerse people and overwhelm their systems so that they have an evolution. Awesome. But also the more regular sort of development work where you’re able to put some stuff in people’s toolboxes in hopes that they take it out of threat.

00:39:46:04 – 00:39:53:00
Philippa White
Yeah, that’s where we have come to the end of the podcast. But I just wonder, is there anything that I haven’t asked you that you’d like to tell our listeners?

00:39:53:00 – 00:40:11:03
Rick Wheatley
I think one of the things that I would say is that I wonder if there’s lots of people walking around out there thinking that it’s just them feeling that it’s a little bit rough right now. I had a conversation with somebody yesterday about this where this woman sort of had like she had a moment, you know, she sort of she sort of crumbled a little bit and tried to catch herself and she couldn’t.

00:40:11:03 – 00:40:25:17
Rick Wheatley
Right. And then talked to a couple of hours later and she said, yeah, I went for a walk with a friend and she told me that she’s just she’s just really having a hard time right now too. And then I talked to my husband and he said that his boss, you know, almost had a breakdown when she when she dropped a cell phone.

00:40:25:20 – 00:40:47:23
Rick Wheatley
You know. So I feel like very many of us right now are maybe a little bit on the edge and and connecting with each other and accepting that rather than trying to push it off and pretend like it’s not the case is maybe important at this moment, because when you step back and you think about the different issues that are sort of overlap, it’s pretty unlike anything that many us have lived with in our lifetimes, right?

00:40:47:23 – 00:41:07:06
Rick Wheatley
The COVID thing was one thing, but now it’s almost like there’s COVID plus five or six others and they’re all really complex and they require us to be the very best versions of ourselves in order to be able to live good lives in the midst of them, but also do anything to try to solve them. So that’s one thing that’s maybe struck me over the last couple of days.

00:41:07:09 – 00:41:11:15
Rick Wheatley
There’s something there. Everybody’s having a hard time right now. Let’s take care of each other, talk about it.

00:41:11:15 – 00:41:15:07
Philippa White
We’ll ask for help. And together we are stronger. Totally.

00:41:15:07 – 00:41:16:12
Rick Wheatley
Absolutely. Yeah.

00:41:16:18 – 00:41:19:08
Philippa White
Couldn’t agree more. Thank you for joining us.

00:41:19:10 – 00:41:20:00
Rick Wheatley
My pleasure.

00:41:20:01 – 00:41:29:11
Philippa White
Yeah, it was really great to talk to. Really, really nice to talk so much there. And lots of really great reflections there. So I really appreciate you taking the time. Thank you.

00:41:30:05 – 00:41:32:06
Rick Wheatley
Thank you.

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