Martin Lindström is one of the world’s leading business, branding, and culture transformation experts. Since his research in behavioral psychology has helped reshape how organizations approach innovation, culture, and business transformation, I really wanted to hear his views and tips on how companies can navigate our Never Normal world.

Crises are opportunities too. On the one hand, we’ve been living through extra-challenging times with a pandemic, the Russo-Ukrainian war, a warming climate, the tensing relations between China and the Us and other seismic shocks. But on the other we have also been able to recognize the potential of these situations to create a better future.

Martin pointed out, for instance, how organizations were able to deeply align around a common goal during COVID-19, though there was a pitfall too: “A lot of business leaders were somewhat amazed but at the same time also fooled by the fact that suddenly the whole organization came together. They made the mistake of thinking that this was a preview of the future culture.” Of course, if you want that type of serendipitous change to stick, you need to integrate that dynamic into your governance. And very few companies were able to do that, unfortunately.

Strangely enough, sometimes that type of survival instinct can also stifle the more radical type of innovation. “Most of the bigger innovations we have seen, happened just before the COVID-19 pandemic”, explained Martin. “Outside the technology space - like the metaverse or Web3 - I have personally not seen dramatic transformations over the past 2 years. Even then, examples like Balenciaga and Gucci dabbling in the metaverse may be pretty cool but it’s still mostly marketing innovation rather than full blown product innovation”.

A reason for the current dominance of this incremental innovation is that it actually is a reaction: humanity has moved into survival mode as it is trying to stay afloat in a world of seismic shocks, like pandemics, energy crises, environmental shifts or unbalanced geopolitics. And it has been looking feverishly for solutions to these problems. Martin gave the fantastic example of Maersk, which categorically “put sustainability front and center of everything and has currently its ships cleaning the sea … with in fact the only purpose of cleaning the sea.”

But both Martin and I feel that that type of reactive innovation isn't perhaps as bright and snappy as the genuine core type of innovation that comes from really being able to think outside of that constant pressure from the Never Normal.

A creativity crisis

Martin believes that our current creativity crisis might have an important role to play here as well. “When we spend time with our clients, they consistently tell us that they've lost creativity internally. My mantra around that is very simple. When you and I talk through a screen, there's no empathy and all the body language is gone. In many ways, our intense real-life in-office collaboration is the emotional glue and buffer that fuels that much needed creativity. It’s a lot more difficult to show the vulnerability needed for creation and innovation behind a screen. Take that away, and you’re left with incremental ideas. And with creative team members that need psychological assistance because they lack the necessary input to keep them feeling relevant and happy.”

“The online and hybrid working mode really saved our life and business during COVID”, he added. “But we must also accept that that space is simply not designed for feeding the emotional foundations of creativity and innovation.”

A holistic approach

Martin believes that – until the online and hybrid mode are designed differently – “it’s important to organize live innovation and reflection days at the office, when employees receive the time and safe space to look at things in a different perspective. When they are not involved in tick the box exercises or online meetings at the office. But when they look at holistically at the organization. That is how you can activate the innovation mode.”

Taking a holistic approach is a matter of continuous compromise and deep collaboration, according to Martin: “It means you have to spend more time respecting each other's skillset and it also requires people to give and take. But that's not happening right now. Now we have silos that are defining each employee’s area of responsibilities because that makes the manager’s Teams calls so convenient to run.”

But perhaps even more crucial for a holistic approach is the role of the customer, believes Martin. “Organizations see themselves from inside out, rather than outside in. They almost never communicate with consumers and customers anymore. The result is that they lack empathy, that ability to put themselves in the shoes of a customer. So the best way to create a holistic approach in the organization is to change the view from outside in, by bringing your people into the homes or offices of customers or consumers. It's not about spreadsheets. It’s about conversations and communication. And once you feel their pain, that sense of empathy becomes the guiding light throughout the organization. A CEO visiting the home of two consumers for one day is can be much more powerful than a 20,000 people survey. Because there's passion and emotions attached to it.”

Decluttering

Another way to trigger more radical innovation inside companies - as opposed to the reactive and incremental type - is through what Martin calls “spring cleaning”.

“Just like you explained with your Day After Tomorrow model, Peter, most employees are up to their neck performing tasks just to survive on a day to day basis. The only way to break that vicious circle is to install very simple methodologies to free up people’s time. In other words, you need a spring cleaning in your organization, to redesign its dynamics. You need to kill internal initiatives that are cluttering things up. You need to ask yourself the questions "what do I want to achieve, what should stay and which of my tasks are a waste of time because they do not add to my core. Very few organizations ask these types of fundamental questions. But those who do are a lot less in a reactive mode. They are mentally much more prepared to take innovation on board.”

The hurdles to take

We also talked about ESG and purpose, subjects that are close to both of our hearts. When it comes to designing purposeful companies, Martin sees 3 different hurdles to take. Firstly, he firmly believes that Generation Z will be a trigger for significant change, when it comes to ESG. “They want a life where they will be able to change things for the better, and they will flatly refuse to work in an organization without true purpose. Before that moment that they take over the workplace, we will see a shift but it will sadly only happen if there's real money attached to the purpose.”

The second thing to happen to make purpose become real, is immediately attaching concrete initiatives to it, according to Martin. “At a recent European event at Coca-Cola, its president and global CEO offered the strong message, saying that “If you are making any decisions which go against our mission of sustainability, we will not support them”. And I'm seeing those companies attach concrete initiatives straight to their vision and actually punishing people within the organization that are not living that purpose.”

And lastly, as Martin pointed out, comes our addiction to quarterly announcement earnings. And he believes that pension and sovereign funds - which “are at a level right now where they have no long term perspective” - are some of the worst problems here. “The good news is that for instance the Norwegian, Swedish and Danish sovereign funds only want to invest if sustainability is part of the agenda”, he adds. “So we do see change happen here.”

I personally believe that the G – the governance part –plays a huge role in the success of the E and S of ESG. Just to compare two situations. Walmart is taking great strides because their sustainability efforts are deeply embedded into the company’s core: through the Walton family with is long term focused an which gives CEO Doug McMillan the authority and the capability to play that long game. The situation at for instance Unilever, however, was very different. When CEO Paul Polman was running the show, he abandoned quarterly reporting which I thought was immensely impressive. But the second he was gone, they went back. And that really shows that they didn't have the governance or the capabilities installed to make that long term vision a sustainable thing.

That is why I believe that the G of ESG - the governance part - might eventually become the most important element. Because if you don't fix that long term capability of your commitment, you are never going to be able to solve both the E or the S, which are basically just a charade without the G.

If you want to learn more about the opportunities of the Never Normal, join me and Isabel Albers, General Editor of De Tijd & L'Echo on 'The Never Normal' business tour in New York in June 2023. More information here.