What – or who – is a ‘catalyst’? And why they matter.
Corporate leaders (and investors) who shake things up, disregard the orthodoxy and ‘break things’ are often ridiculed or called fools. But Neil Goddin explains why Artemis’ impact equities team actively seek out companies led by these ‘catalysts’.
In a recent article, we explained why we only invest in companies with authentic leadership. As a complement to this, I was interested to read about the concept of ‘catalysts’ in a book, Move Fast. Break S**t. Burn Out, published late last year. These ‘catalysts’ see the world in a completely different way to most people and are often seen as troublemakers. The book’s authors, Tracey Lovejoy and Shannon Lucas, explain:
“Within any group of innovators, changemakers, entrepreneurs, and intrapreneurs, are those people called Catalysts, those of us who have a deep-rooted need to create positive change. Among Catalysts, there is an unmet need to be seen and valued for who we are and how we show up in the world. We move so fast that we lose people. We can break s**t without intentionality. Catalysts feel a deep sense of drive toward a better future state. We can’t help but see potential change and set it in motion, wherever we are.”
Why does this matter to the manager of a positive impact fund? It matters because it is clear to me that some of the best businesses in the world were built by ‘catalysts’. At Netflix, Amazon, Microsoft, Patagonia and Tesla, there has been a catalyst seeking to change the way things were done.
Being this catalyst is never easy. People are averse to change; encouraging them to believe there is a different, better way of doing things to believe in unorthodox methods is difficult. So catalysts are often laughed at, called fools and expected to fail.
The story goes that John Antioco, the CEO of Blockbuster, struggled not to laugh during a meeting with Marc Randolph and Reed Hastings, at which they suggested his company buy Netflix for $50 million. Apparently the meeting went downhill from that point. Randolph said “You fly to Blockbuster, try and sell the business, and they laugh at you”. The only option left was to defeat Blockbuster. Netflix stayed alive by making painful layoffs, finding a way to launch overnight delivery of DVDs and, crucially, preparing an early move into streaming.
Who's laughing now? Netflix eclipses Blockbuster
Happily for us, many of today’s catalysts are mission-driven and focussed on trying to solve many of the problems in the world today. These are often environmental issues, such as clean and affordable energy, clean water, responsible consumption and responsible production. They also focus on social issues like healthcare costs, hunger, education, poverty and diversity.
Investing in catalyst companies is not easy. We are fully aware not all of them will succeed. We are conscious they often look (very) expensive because they are young and still in the investment phase. We know that some people will think we are crazy to invest in them. But we also know that some of them stand the chance of becoming the ‘next Netflix’, all the while helping make the world a better place. So despite the short-term pain, despite the risk of failure and people thinking we are fools, we strive to be catalysts too.
Neil Goddin is a member of Artemis’ impact equities team.
