The decisions we make today are based on the world we think we’ll have tomorrow. But the world is changing so rapidly that the decisions we made even three weeks ago bear little relevance to today.

In his discussion with Ben, Graham Boyd sets out the dangers of running a business in isolation, rather than in concert with others, and how success doesn’t have to be a zero sum game.

Further reading

• Rebuild: the Economy, Leadership, and You – Graham’s book
• Net Positive, by Paul Polman
• Why Most Things Fail, by Paul Ormerod
• Evolute Six
• Graham’s website
• Peripheral Thinking episode 2, with. Mark Anielski

Hey, Hey, welcome to Peripheral Thinking, a series of conversations

with entrepreneurs, advisors, activists, and academics, intending

to inspire, inspire you with ideas from the margins, the periphery.

Cuz that's where the ideas which will shape tomorrow are hide in today.

On those margins.

The periphery.

This week I spoke to Graham Boyd.

Graham is an entrepreneur, a Startup founder and innovation manager is

extensive experience leading businesses and is driven to make a difference through

innovation that enables business and people to do more with less friction.

How good does that sound?

Uh, in this episode, we talk about his book, Rebuild: the Economy,

Leadership and You, which is describes as a toolkit for builders

of a better world, people like you.

I hope you enjoy Graham.

Welcome to Peripheral Thinking.

Only a pleasure.

Ben, thank you for inviting me.

Most welcome Most welcome.

Now I could, as I mentioned in uh, as we were sort of talking a little bit

before recording, I actually came across you, you uh, on another of our guests,

Mark Anielski's podcast uh, and you were talking about all sorts of very

kind of inspiring ideas around kind of regenerative businesses and how, how we

kind of function well in this sort of crazy complex times that we live in, but

I think you were talking about your new book on Mark's podcast and I was kind of,

I don't actually, is it, how new is it?

So it's been out on the shelves.

The virtual shelves of online bookstores for almost 18 months now.

So it's, it's new-ish but not brand new.

And it's called Rebuild the Economy Leadership in You.

And it's written as a toolkit for anybody who's trying to build a better world.

Especially for people who are trying to use business as a force for good,

in particular to build regenerative or net positive businesses.

So anybody who's reading Paul Polman's book Net Positive would be well-served by

reading this book immediately afterwards as a toolkit on how to actually put

into practice in an anti-fragile way.

Many of the things that Paul, for example talks about in his book.

And so just going back to a sort of basics where, when you talk about sort of

regenerative businesses, or kind of net positive, what we sort of mean by that?

I look at regenerative very broadly.

For me.

Something is regenerative when it increases every single

capital that it touches.

And that, that spans your all the six classes of capitals say in the

integrated reporting initiative, I'm not just talking about natural capital.

I'm also talking about the human capitals as well as things like manufactured

capital and financial capital.

And so you sort of talk in the book as your, your kind of your subheader sort

of point out there's sort of the three aspects of this there's the you or me or

the individual there's the organization.

And then there's the economy.

And I think that the subheading goes the other way round, doesn't it?

The economy the organization and the individual.

But does the book follow that thread or does it start with me out?

So that was a big question that Jack and I wrestled worth whilst writing

the book and we ended up putting it into the order of the title.

So we begin with the economy, then we deal with the individual

and we end with the organization.

And we originally had it, the individual first, then the organization, and then the

economy at the end, we said to ourselves, and we've explicitly written this in the

preface, no order can possibly be correct.

for three elements that are deeply interrelated and in many senses have a

circular relationship with each other.

So because of the constraints of publishing, the book is linear,

but please read the book in whatever order appeals to you best.

So w if we were going to do a sort of little sort of explanation of it where

would you think is a, is a good place to start for the telling of the story?

So let's say for the context of this conversation where we began and given

the context that we're living in, in the moment, right now, people are extremely

aware of just how uncertain the world is.

Yeah, whatever people were predicting for this week, three weeks ago is

probably completely irrelevant for the world we're dealing with right now.

And yeah, I was certainly, I'm sure you were everybody listening

to this took decisions three weeks ago, based on the world that they

thought they would be living in today.

And we're now living in a very different world.

So, this is one of the central themes of the book, which is that the world is

actually far more volatile, uncertain, and complex than most of us are easily

able to deal with, know how to deal with, and are willing to accept.

And the question is, if you truly are living in a world that has inherent

uncertainty, inherent complexity, that is irreducible, that is in a sense,

has very large unknowable suedes.

And this is a concept that you'll find in religions, but we've

lost in today's Western world.

This awareness that whatever you're looking at, holding, dealing with,

it has a knowable component and an unknowable component And yes, the

knowable component, you can codify that you can put in place best

practices, or at least good practices.

You can get it under control, et cetera, et cetera, but whatever is inherently

unknowable, you can't and you're wasting your time and effort if you try to

put time and effort into getting to know what is inherently unknowable.

Instead, you need to deal with the unknowable in ways that are appropriate

for what is inherently unknowable.

So where this boils down to, if you go to business school, or if you study

economics, the way that economists and business school people are taught to

deal with uncertainty is based on a few big assumptions, which actually don't

apply in the real world we're living in.

And because of this in the west, we've become more and more enamored

of the idea that we're independent of each other, our businesses are

independent of each other, we can just take decisions in a simplistic way.

And one of the big themes in the book is that this is simply not

true in a world that is well, first of all, it's simply not true.

We're not as disconnected as we like to believe.

And secondly, the bigger the unknowable components of the world

we're living in, the bigger the uncertainty and vulnerability, the

more harmful this myth becomes to us.

So, if you're running a small business even more.

So if you're running an individual freelance operation and you're trying

to run it in isolation, disconnected from everybody else where you're looking

at the entire world as a competitive jungle, your job is to win by beating

everybody else around you, that's actually setting you up to fail.

I like to say there's a big difference between winning and succeeding.

Winning is about beating.

The other person.

Succeeding is about well succeeding, and you can quite happily succeed in ways

where everybody succeeds, succeeding does not imply somebody else losing.

And if, if you go back and you look at how the guilds worked in centuries past, or

if you look at how a Japanese K Ratso, the Japanese conglomerate works, or in fact,

if you look at how any large multinational works, if you look at Procter and Gamble,

in all of these instances, your ability to live, to succeed was being taken care

of buyer, balanced mixture of what you did individually as an individual member

of the Guild, or as an individual brand in Procter and Gamble, and collectively

what the Guild did as a whole to take care of people when bad luck happens,

when something unpredictable emerges.

Or in the case of Procter and Gamble, if you take the past two years of COVID you,

your job in P and G is covered by the money coming into P and G as a whole, it

doesn't really matter whether the brand you're working on has taken off massively.

Because COVID has increased the amount of money people are spending

on home care products or has plummeted because the amount of money that

men are spending on male grooming products has diminished to zero.

You know, so many men over the past two years have reduced their shaving frequency

down to perhaps once a week or not at all.

So you're poor, poor Gillette razor blades has not done nearly

as well as perhaps was in P and G is forecasting six months into 2019

before COVID-19 arrived on the horizon.

So what all of this means is that the way that we used to work with each other.

The way that we still work with each other, when it comes to

things like raising a child, it takes a village to raise a child.

All of these things are actually deeply true in business.

And this is one of the reasons why we're having so many problems today

with environmental degradation, climate change and all of these things.

We've bought into the myth that economists have imposed on us,

neoclassical economists which is that only pure competition is right.

Everything else is wrong.

And that's a myth that has emerged because economists basically

don't understand statistics.

They'll take a slight detour.

The statistics that everybody is taught in business school

and economics is only valid.

If everything is completely independent of everything else.

As soon as there are connections, that approach to statistics

is fundamentally not valid.

So if you take a decision in your life personally, today, the effect of

that decision multiplies everything else that happens in your life.

And it multiplies because your life is one connected flow

of life from birth to death.

From multiple lies before birth to multiple lives after death.

Depending on your belief system.

The whole paradigm of karma, for example, is simply saying that your

lives are connected with each other.

And so in a world where actually, what we're dealing with are connected

processes through time, rather than just completely disconnected events

where you can swap one event out for another, without any restrictions on

that, in a world that is multiplicative, we cannot use the statistics that were

taught at university to estimate in an uncertain world what choices to make, to

give us a good probability of success.

What that turns into is that using the wrong ways of estimating, what are the

likely outcomes of a choice you might make in an uncertain world means that

we are seriously underestimating the risks of losing and overestimating

the probability of gaining a benefit.

And at an individual scale, that means that we intuitively realize

that we have to build up a much bigger pile of cash in order to survive.

At investor scale.

It means that investors have to chase significantly better returns

from their portfolio because of all of the loss that's happening.

And at a global scale, it means that we have to use significantly more

natural resources and human resources to deliver a certain level of success.

So basically, we're holding up a cup and trying to keep it full of

what we need to thrive, not noticing that the cup has holes in it at the

bottom, and it's leaking like a sieve.

And so we're ending up putting 10 times more into it, just to maintain

the level than we would need.

The way around that is through connection and collaboration.

Recognizing that we're connected that if I am running a company that is internet

based and that has generated a huge profit over the past two years because of

COVID, that's not for any other reasons.

I was on in one of the lucky arenas when this unpredictable thing called

COVID arrived and another company that was involved in, for example,

travel that ended up hemorrhaging and going bankrupt during COVID, it wasn't

because of any lack of ability in the business that they lost all of that.

It was simply because cOVID hit the stage when it hit the stage.

And it's something that was, yes, it was predictable.

That COVID would come at some point, nobody could predict exactly when,

nobody could predict it would start exactly in this month and plan in

their business strategy appropriately.

So the way to do this is to simply look at how nature works, how villages

used to work, recognizing that almost everything that comes our way is

unknowable until it's here, and the way to deal with unknowability is

through collaboration, through sharing.

And that's the, that's one of the big essences of the book.

It's absolutely clear when you do the maths, if we build businesses this way, we

eliminate many of the losses in business and it gives us exactly what we need to

deliver full regeneration across all of the capitals, including financial capital.

I was really interested.

Interesting.

You sort of talking about this, the new.

Because of because of how it sort of plays out the need to have much more available

or available cash than we typically have.

And I kind of was thinking about my own experience of looking at all

your writing and looking at lots of business plans, for example, or any

sort of plan in whether running my own business or in people kind of running

businesses that I'm involved with.

Just the idea that everything takes maybe three times longer than you think it's

going to take, and it costs you twice the amount that you think it's going to cost.

So there's kind of, sort of just sort of intuitively we kind of have this

kind of this sort of insight that things take longer and cost more.

And you're also kind of then pointing to the fact that there

is a sort of an underlying sort of statistical thing, which means that

I also need to have more available money, which is kind of pointing,

I guess, to why that's happening.

Exactly.

This is the thing.

It's perfectly clear that if you simply apply the kind of approach that all

business leaders, economists are being taught so the numbers that come out, if

in an uncertain world, you want to have a company that is growing at 5%, then you

actually need to target an 83% growth rate in order to actually grow at 5% in one of

the parameters of the simulation I set.

And that, I mean, that's huge.

You want to grow at 5% and to compensate for the misunderstanding

of how things work in a connected, uncertain world, to grow at 5%, you

need to target an 83% growth rate.

That 77 percentage points difference is what's needed to take care of all of the

losses that we've built into how we design our business structures and operations.

And those losses is that sort of a considerable part of that

is that about the role of luck?

Yes.

Yes.

It's this interplay between unpredictable context drivers have a much bigger role

to play in business than we like to think.

That's the one side of it.

And that's been well studied by a UK economist, Paul Ormerod who

wrote a brilliant book about 10 years ago now, Why Things Fail.

And he looked at data from business failure, looking back more than

a hundred years and at everything from small enterprises through to

multinationals, and you then try to fit that data with all kinds of different

hypotheses for why things fail.

The only hypothesis that actually fits the data is random fortune.

Basically the equations of evolution where things change because of

random events, cosmic rays, whatever, those are the only equations that

fit the data for business failure.

And the essence of his conclusion is yes, the quality of your leaders,

the quality of your operations.

Do you have operational excellence, et cetera, et cetera, all of that

is important, but sooner or later, something comes in that could not

have been predicted, and it's that which causes the business to fail.

So that's the one side is this whole space of unpredictability.

And the other side, as I was saying is that economists and business

leaders in order to steer their businesses in an unpredictable

context, the way that they're taught to choose between options is wrong.

Because that way of choosing between options of calculating likely

outcomes only works if the world is disconnected, whereas the world we're

living in is actually deeply connected.

Yeah.

I mean, it's kinda, it's interesting because obviously this sort of goes

against I could, on the one hand, like you say, what sort of taught at business

school, but it also, if I think about then, just in a sort of day-to-day basis

for people running smaller businesses where we may not think we making decisions

based on a sort of statistical kind of return, a lot of it is kind of intuitive.

A lot of it is reacting in the moment, you know?

yes, there might be some sort of app support mechanisms or matrices we

might use to help consider whether an opportunity is worth pursuing or not.

Some of those things might be financial.

Some of them not kind of financial, but essentially it kind of, you know,

a lot of it is sort of intuitive.

But this kind of idea that actually so much about how we talk about

business, whether it's small or large, is this illusion of control,

essentially that we're putting in place.

We've got goals.

We've got this, you know, we have ways of operating, which is

lending an illusion of control.

Which, you know, I guess what you're pointing to is just

an illusion, essentially.

And the more that we embrace the idea that, that isn't illusion it then kind of

opens up the possibility of, okay, if that isn't illusion, what do we do about it?

Yes, exactly.

And that's the thing.

This is what humanity is known from the beginning of time.

It's many ways only relatively recent, this idea that we can control everything.

And if we're not able to control everything, then we just need to try

a bit harder to get it under control.

If you go back a few hundred years or thousands of years, you go to the

wisdom traditions of any of the let's say groupings that have preserved their

ancient wisdom traditions, there are a whole bunch of behaviors that are coming

from a whole bunch of clarity that much of what happens is not in human control.

And whether you're an atheistic physicist like me, who simply ascribes

that to natural randomness and inherent complexity or you follow any of the

faith beliefs or whatever, whether you attributed to a god or the spirits or

whatever, all of those traditions are saying, there are a whole bunch of

things that are unknowable, therefore inherently can never be controlled.

And so how do we, what behaviors should we adopt?

What practices should we have in order to succeed in a world that is

inherently unknowable and out of control?

And the essence of that is at the heart of what has made humanity succeed

so well for so long on the planet, which is we're able to collaborate.

Collaboration is our biggest enabler of success and of thriving in a

world that is inherently strongly unknowable and out of control.

And when I say collaboration, that means practical collaboration.

It means things like if I'm running an apple farm and one year I have an

amazing apple harvest, quite likely the next year I will have an absolutely

lousy apple harvest, but the year that I do have a brilliant apple harvest, I

share a certain amount of my windfall with everybody else in the village.

And knowing that the next year when my apple harvest is absolutely

lousy, possibly somebody else will have a superb, I invent something.

Maybe a grain harvest or a cow harvest.

And I know that because we're operating as one village rather than as 1000

independent families that don't share with each other, whoever in the village has

good fortune that year shares enough of that good fortune for the whole village

to make it through to the next year.

And in an uncertain world, whilst one person is at extreme risk of either

making it really big or going bankrupt completely when that's connected across

the whole village moves relatively stably.

So that's really at the heart of it.

And that means for instance, in a small business context, If you're running

a small business and you structure yourself like the guilds of old, where

you have, for instance, something that says you put 10% of your profit above a

certain minimum internal threshold, if 10% of those extra winnings go into a

collective pot in the Guild, and every year that pot is distributed equally

between all businesses, then that means that no business is going to go bankrupt

simply because bad luck happened.

And that means that if my business has good luck, this year and I put

that money into the pot while I get a little bit of it back, if all of

the businesses have good luck that year, then we net out at the same.

But if one of those businesses has bad luck, we've half of those businesses

have bad luck, this pot means that they stay alive for another year.

And the next year they might have good luck and I have bad.

And then their money helps me stay alive for another year.

And it's this reciprocal swings of ups and downs of good and bad luck by systemically

connecting the swings so they balance out, then the consequences of the upswings and

downswings don't cry that threshold of bankruptcy, where you kicked out the game.

So much of our thinking assumes that life operates the way a football match does.

You have a whistle?

The board is kicked for the first time and after a set amount of time, another

whistle blows and the game is ended, and that defines whether you've won or lost.

Life, business, these are not finite games with a set beginning and end.

These are infinite games with no beginning and no end.

The statistics of infinite games is different.

What you need to do to succeed in an infinite game where winning is

irrelevant because there's no end whistle, what you need to do to succeed.

There is fundamentally different.

Within your village, metaphorical or otherwise given, I guess we're talking

about metaphorical village is really Is it important to have a diverse range of

businesses, or should you be, you know, is it okay to be, cause you know, one

of the references you gave earlier, good friend of mine runs a travel business,

like you say, so, but the last two years kind of horrific sort of time, they're

just sort of coming out now managed to kind of hold on, you know, a Guild of

travel businesses, is that a, is that the kind of right way to go or should

there be sort of diversity in there?

Well, again, nature is our best source of inspiration here.

If you talk to anybody in the permaculture world, they'll say to

you that an entire farm of only one variety of wheat is highly fragile.

Yes, if you have an entire farm of wheat and you have a little bit of

a drainage problem in one corner of the farm and it gets flooded and all

of the week there dies out, you're protected against that kind of issue,

but you're far better off if you have something that is as diverse as the

diversity in any old growth rain forest.

That's your best protection.

Or if you have something like a Procter and Gamble or a Unilever where you

have such completely diverse business units, all within one organization,

it really doesn't matter for any individual employees survival whether

a business unit lives or dies.

If a certain business unit goes out of fashion, because for example, or men

stopped shaving so Gillette goes bankrupt because nobody needs razorblades anymore,

there's going to be another brand that takes off precisely because of that.

Maybe facial shampoo, especially designed for beards.

So the, the short answer is the more diversity, the better.

And again, this is one of the things where investors haven't quite got, what

an ecosystem really means because in the investment world as much thinking that

an ecosystem is a group of businesses, more or less in the same field, whereas

actually an ecosystem of businesses is a set of businesses that are highly diverse.

Is size of organizations important within that?

Do we all need to be able to similar size?

That's a very interesting question.

The two parts to your question, the first part is when you

are starting up the ecosystem.

And the second part is when it's a mature ecosystem.

When you're starting up the ecosystem, it's going to be far easier.

If all of the businesses are approximately the same size.

Because what you need to build is you need to build connections between businesses.

And that means two things.

You need to build mechanisms for businesses to share profit with

each other, and secondly you need to build in mechanisms for businesses to

engage in governance with each other.

It's all very well for you and me to agree that at the end of every year,

we will share between us 10% of each of our excess profit, but if the only

thing that is holding that in place Is a simple contract, then that's very

fragile, because that contract is only as strong as our respective readiness

to invest money in enforcing that contract, which can be very expensive.

Something like 30% of the global economy is the cost of trust.

Contracts are a very expensive way of trying to get trust to work.

Far better is that in my annual shareholder meeting and in your annual

shareholder meeting, each of us has an appropriate balance of voting power

in each other's shareholder meetings.

So we're then truly starting to act as a connected ecosystem.

We can engage in governance for the good of the ecosystem of companies as a whole.

Over the long haul.

Even it means for one company it's less extractive.

So that's the first thing.

And that means that it's, to get both of those mechanisms in place.

And I describe how to do that in my book.

To get both of those mechanisms into place.

It's best if we're approximately the same size, of course, long term, once it's a

mature ecosystem, you will have businesses of all sizes just as in nature, you have

everything from tiny fruit flies that live for a day, all the way through to

Sequoia trees that live for thousands of years and elephants and whales

that are equally huge and long-lived.

So is the word that you do other than kind of writing a book or in

addition to writing, but is it about putting these systems together?

Absolutely.

So that the heart of the work we're doing now is we're running what we're

calling our startup factory, which provides startup creation, acceleration,

and consulting services to startups and businesses in transition to

implement everything we're saying.

And we're working hard on building an investment vehicle, which is structured

according to the same principles.

So it's not an investment fund.

It's more like a holding company.

We're working hard on building that so that the vehicle invests into the members

of the ecosystem and the limited partners or the investors into the vehicle are only

investing into the ecosystem as a whole.

Which means that they have simplicity, they have high liquidity, they can

exit when they want, all of these things because they're investing

into a large stable ecosystem.

And inside the ecosystem, the individual businesses are going up and down and

very exposed to the unpredictability.

So, our bet is that approach shuts away most of the causes of loss.

And that means that we have far more available, which means that we

can make the impossible normal, we can have something that is highly

regenerative in all of the capital's high, positive impact, net positive,

and financially profitable for everybody concerned, including the investors.

Are you looking for sort of startups to join this community or young businesses?

Is there kind of profile of where businesses might be on their journey,

which is the kind of, which is kind of right for your networks?

Yes, we're absolutely looking for startups that have not even begun

starting all the way through to startups that are well on their

journey and are keen to reincorporate.

And even more so, what we're looking for are people who are say in a career

at the moment, they may be in their.

Twenties thirties, forties, fifties, or even sixties, and

who was saying, now's the time.

We have to do something.

I want to make my work count.

I want to make my money matter.

We have to build regenerative businesses.

And who are not necessarily have a founder mentality.

They don't have a big idea that they are passionately committed to founding,

and they're willing to sacrifice everything just to make this idea happen.

So a big part of our startup factory is bringing in people

who want to work in startups.

And we construct during our program an entire ecosystem of

interrelated startups that then enter our ecosystem of companies as.

Complete sub circle of the ecosystem.

So we're looking for people like that, definitely.

Where would people find out more about your ideas, these networks, how they might

get involved, what they might do, who it's for all of those sorts of things?

Absolutely.

The three places to look.

One of them is to go to your local bookshop and order yourself a copy of my

book, Rebuild the Economy, Leadership and You, and it's written by myself, Graham

Boyd and my co-author Jack Riordan.

The second place to look for details.

What we're actually doing and to register for our programs to get more information

is our company website evolutesix.com, which is E V O L U T E S I X .com.

And the final place to live.

And this is where you can sign up.

For example, for our monthly webinar series around the book is my personal

website, which is graham-boyd.biz.

I think there is just something so sort of compelling about the idea that actually

things are better together which, you know, is the kind of heart, the essence

of what you're talking about, which of course we all know instinctively and

intuitively and hopefully, you know, as in these kinds of volatile, uncertain

times, people actually look for those ideas, which have stood the test of time.

Those two words, better together.

That's been the essence of humanity since humanity first emerged on the planet.

And we lose our connection with that at our peril.

And I really mean at our peril.

What we might want to talk about, we haven't really touched on what do

these ideas mean in terms of each of our lives as individual human beings.

Why are we better together as groups of people?

What does uncertainty mean for me as an individual human being?

We focused mainly on business.

So I simply put that in as a possibility for a second podcast.

I hope you enjoyed that conversation with Graham.

Uh, if you did maybe check out the conversation with,

uh, economist, mark and SK.

Um, I came to Graham's work via mark.

So lots of overlaps there.

You might enjoy.

And as ever if you like this and like the work that we're doing, please share it.

That is the lifeblood of this journey.

This adventure is.

So if there's somebody who you think might benefit from what we're

doing, if there's somebody who you think might also be a little bit

inspired by some of the work that we are covering, then please share it.

That's what we are all about.

Uh, thank you for your time.

Thank you for your interest.

If you wanna check out more of these.

Go as ever to the website, Budha on the board.com.

You'll find everything about peripheral thinking on there.

Go have a look.

You can sign up, subscribe to the mating list and we will let you know of each

new episode which comes out until then.

Thank you.