What's the key to sustainable, inclusive growth? It's not McKinsey.
I was disappointed this morning - though not surprised - to read this "Inside the Strategy Room" article from McKinsey & Company.
The piece transcribes the 'key insights' from a conversation between three of McKinsey's most senior principals, and it begins well:
We wanted to introduce what is likely to be a challenge ten times greater than the pandemic, which is creating a path to sustainable and inclusive growth.
However, the very next sentence betrays McKinsey's myopic and misguided understanding of the crisis we face:
Three dimensions together will drive our future prosperity, but we lead with growth because sustainability and inclusion will not be possible without growth.
The article as a whole could serve as Exhibit A in a critique of "Voluntary Market-Led" responses to the sustainability imperative - a critique put most compellingly in Duncan Austin's recent essays. Binge-read them now on Both Brains Required if you haven't already done so.
Pre-supposing that "growth" is the only way out of this mess, and that all solutions must flow from that, is (to use Duncan's analogy) tantamount to moving even faster to get out of quicksand.
The economy is a complex adaptive system, which itself is nested in, dependent upon and constrained by higher-level systems. McKinsey's principals seem disturbingly unaware of this, instead relying on the age-old assumption that growth = GDP, and GDP = good.
From an ecological perspective, there are four types of growth which economists (and the rest of us) should be concerned about:
- growth in biophysical throughput (how much stuff we take from the Earth and how much we dump back);
- growth in production and consumption (how much stuff we make and use);
- growth in welfare (how much people's lives are improved); and
- growth in natural capital (how much we increase Earth's capacity to meet our needs).
You can read more on these four types of growth and the implications here.
Without this systemic understanding we end up in unhelpful and divisive debates around whether we should pursue growth (CEOs and politicians: YES!) or de-growth (environmentalists: NO!). It's depressing to see that McKinsey - as one of the foremost advisors to business leaders - is still stuck in this quagmire, trotting out thirty-year old advice, propped up by a few updated stats. And they're not the only ones.
Does anyone reading have any thoughts on how we can get McKinsey & Company, Bain & Company, Accenture Strategy et al back to the classroom? Imagine the change we could see if the millions of dollars spent with these firms actually delivered advice that could start to get us out of this hole?