On purpose, humanity and the future of the corporation

These past couple of weeks, I’ve been reflecting on an interesting paper from the British Academy – Principles for Purposeful Business: How to deliver the framework for the Future of the Corporation.

Essentially, it’s a treatise on closing the ‘say-do’ gap on purpose, setting out principles and pathways for taking us beyond the rhetoric and hardwiring it into organizations everywhere. And there’s a lot to like about it – not least its definition of corporate purpose, the simplicity and clarity of which stands in sharp contrast to the Business Roundtable statement published a few months back:

The purpose of business is to solve the problems of people and planet profitably, and not profit from causing [them].

I don’t know about you, but I absolutely love that – not just for what it says about anchoring corporate purpose in broader societal goals (as represented by the SDGs), but also what it implies about our notions of ‘prosperity’ and the essential role of capitalism in furthering it. It encourages us to shift our perspective on how and why markets work from their allocative efficiency to their effectiveness in promoting creativity, problem-solving and the diffusion of innovation.

When you think about it, this makes perfect sense. After all (as some smart McKinsey bods argued a few years back), life isn’t better today than it was in 1800 because we’re allocating the resources of the 19th-century economy more efficiently; it’s better because of the vast array of innovations (life-saving antibiotics, indoor plumbing, motorized transport to name just a few) that have become available to much (if not yet all) of the world’s population.

In other words, prosperity can’t be properly understood by looking at just monetary measures. Maybe it’s better understood in terms of the accumulation of solutions to human problems – the ultimate measures of societal health and wealth (and business success) being the range of problems solved, and how widely available those solutions are to all.

I do have my reservations, though…

Aside from the undoubtedly excellent definition of corporate purpose – plus a few abstract references to the wellbeing of humanity – the report is strikingly devoid of any kind of human expression. From ownership and governance to measurement and performance, the principles outlined (while useful) are all largely ‘mechanistic’ in nature, steeped in the mindset of the lawyer, the accountant, the economist, the management consultant and the academic.

As highlighted by a purposeful pal of mine, amid some WhatsApp chat-chat about the report, a big part of the problem today is surely that we’re already drowning in these perspectives – and have been since time immemorial. At their worst (embodied by the likes of Frederick Taylor and his scientific management theory), it’s these perspectives that have led us to spend the best part of a century trying to drive humanity and its imperfections out of the system, so perhaps it’s no great surprise that a humanist perspective is missing from the narrative.

But when it’s our essential humanity that’s now seen as the very thing most critical to business and society thriving over the long term, those deeper philosophical underpinnings need to be there, e.g.:

• Understanding what it means to be human at work in an era of increasing human-machine collaboration, and how to nurture that
• Recognizing that any business (at least at its founding) is fundamentally a social enterprise – a coming together of people to solve a problem/meet a need that they couldn’t address alone
• Appreciating our innate desire, as humans, for connection – with nature and with each other
• Framing the need for change in terms of finding the antithesis of an economic model seemingly designed to pry ourselves from our human natures, dampen our passions and keep ourselves from constructing a ‘whole’ and meaningful story for our lives

To that last point, the WhatsApp chatter generated a series of ‘from… to…’ statements that bear closer inspection and deeper thought. If the mood takes you, I’d invite you to have a think about these, and maybe share other ‘mindset shifts’ you’d add to the list:

• From engineer to artist
• From physicist to biologist
• From economist to spiritualist
• From specialist to generalist
• From consumer to citizen
• From parts to systems
• From economics to holonomics
• From mechanism to organism
• From extractive to regenerative
• From ‘more!’ to enough
• From scarcity to abundance
• From growth to scale
• From financial returns to impact returns
• From transactions to relationships
• From bureaucracy to community
• From organization to self-organization
• From control to nurture

Something to ponder over the festive break, anyway.

 

If not now, when?

I received this passionate and utterly brilliant message from Giles Gibbons, Founder & CEO of Good Business, earlier this week. Naturally, I agree with every word, and it’s just too good not to share in full:

Dear friends,

20 years and counting of the ‘sustainability movement’ – of which we count ourselves a part – and what have we achieved? Our honest answer right now is nowhere near enough.

If anything drives it home it’s the summer we’ve just had. We don’t think you can have lived through it without having a ‘stop and think’ moment. 46-degree heat in Paris. The hottest July the continent of Africa has ever seen. Populism breaking politics in Britain, and exploding onto the scene in France, Italy, Ukraine – and the list goes on…

Too many people feel that the world is stacked in favour of elites at the expense of everyone else. And so the two main challenges of our day – climate change and inequality – played out on the global stage in a clear, present and in-your-face way. Even the FT and corporate USA have started to argue that capitalism as currently construed isn’t working. And that’s before millions of people around the globe joined the biggest climate protest ever.

This must be the time not just to sit up and think, but to take action. Businesses have been delivering slow and incremental change in the name of business responsibility and sustainability when what we need is a thunderbolt of transformation.

We can’t keep saying we’ve got twenty years to save the world because the time will run out. From zero-carbon commitments to the SDG deadline, horizons for delivery are drawing ever closer, not so the action they demand. In fact we think that unless business steps up to the challenges we face, time will be called on the sustainability movement. It’s not delivering the capitalism the world both wants and needs.

But it absolutely can. And there’s never been a more compelling case for it to do so. Not least because there is a massive new wave of will for change. For the first time ever consumers and culture are in the lead on all this, demanding action. People want to buy from, work for, talk about and partner with organisations that deliver bold solutions for people and society. And for every established business that doesn’t deliver against this there’s a disrupter that will.

The message is clear. If you want your business to be part of the future you need a step change in thinking and action. Steady progress on sustainability will write you out of history. The winners will be those that embrace transformative change.

And if there’s ever a moment to mark a new beginning it’s upon us – January 2020. A decade to meet the 2030 agenda for sustainable change. The moment to draw a line in the sustainability sand, and springboard into a new era of action.

We know this is anything but easy. But it is essential. And we believe that everything we’ve learnt and done over the past 20+ years of working in this space has set us up for this moment.

If you agree, join with us. If you want us to help, please get in touch. We’re ready.

Transform your business, transform the world.

Giles

Founder & CEO
Good Business

I’m not Boris (obvs!).

“We will dismantle systems of privilege and inequality and build a society that works for the millions and not the millionaires,” says Holly Rigby of the Abolish Eton campaign of Labour’s conference vote to abolish private schools.

Well, Holly, I’ve got news for you. Not everyone who goes through, or pays for, private education is some Boris-style toff. I’m certainly not a millionaire and I don’t come from a background of privilege – unless, of course, by ‘privilege’ you mean having the good fortune to be born into a loving family who instilled in me the value and importance of a curious mind and a lifelong love of learning.

Like my parents and grandparents before me, whatever good fortune I enjoy now, I’ve earned through study and hard work. And I choose to spend the fruits of my labour on my daughter (the first member of the family on my side, incidentally, to go to private school). I do so because I know the mindsets and skills she will need most to adapt and thrive in the future of work, and because (regrettably) I don’t believe we will find those 21st century skills being given anything like the same focus and attention in the state sector.

You wanna fix that? Grand. Go to Finland. See how the highest-performing education system in Europe does it, and recognise the myriad ways in which it differs from ours – not least the prestige of the teaching profession, the complete absence of standardised testing, and the way in which development of what they call “transversal competencies” is foundational to the teaching of every subject.

Then, perhaps, you’ll realise that your proposals are redolent of that excellent quote from US journalist, essayist and satirist, H. L. Mencken:

For every complex problem there is an answer that is clear, simple and wrong.

Live Long and Prosper: now available to download for free

To be honest, the title of this post says everything that needs to be said, so I won’t belabour the point. Rather, since my magnum opus (if anything that can be read from cover to cover in under an hour could ever be described as such!) may soon disappear from Amazon, I wanted to let people know that, instead, I’m making it available to download for free, as a PDF; also to record for posterity some of the very kind words people wrote about it in customer reviews.

For all the equally kind words Live Long and Prosper received from luminaries such as Paul Polman, Jonathon Porritt and John Elkington, it’s these reviews that I truly cherish, because they nail the essence what Kevin Keohane, me and our fellow 55-minute guide authors set out to do: namely, to give our readers the maximum possible insight, while taking from them the least possible time. I couldn’t have asked for better…

I bought Live Long and Prosper out of curiosity to see how it would tackle the complex convergence of sustainability, brand and design in a book that could be read in only 55 minutes. It does it well.

Billed as a ‘quick and dirty’ tour with ‘no fluff. No filler. No jargon’, I’m not sure this description quite does the book justice. Admittedly, the style is no-nonsense, however this only helps convey highly complicated concepts in a concise, clear and accessible format that will appeal to the seasoned sustainability professional, as well as those new to this space.

As someone well-versed in the concept of a sustainable business and brand, it was a great book to re-elevate my thinking out of the day-to-day issues, re-grounding me in the importance of what building a sustainable brand really means – the ability to exist in 50 years time. The short summaries on each page are great sound bites – handy for those conversations with the non-believers! In fact, this is an ideal book to hand out to the skeptics that I meet on a daily basis.

Yes this book can be read fast but I challenge readers to get through it without pausing to think or jot things down. A few extra minutes – in my view, it’s time well spent.

————

For those who have already read the first edition of “Live Long and Prosper”, you know how fantastic this little treasure is. I don’t know how he did it, but author Dan Gray has updated and improved his 55-minute Guide to Building Sustainable Brands and has (in my humble opinion) created the best guide to how sustainability issues can and will influence business in the opening decades of the 21st century. For anyone with an interest in the future of business and brand value, you owe it to yourself to get this book!

[About me: I recently completed a multi-year graduate degree in sustainable business at a top-ranked US business school, and when I read this book I was amazed at how it manages to combine the most important themes from my (very expensive) education into 100 thoughtful, concise, and easy-to-digest pages.]

A few of my personal favorite updates in the 2nd edition include a feature on “Creating Shared Value” first advanced by Michael Porter at Harvard Business School, an explanation of the dichotomy between thin vs thick value, and a new section on “Design for Sustainability” and biomimicry (the most exciting field within sustainability today).

This 55-Minute Guide has been near the top of my sustainability reading list since it was first published, but now that it has been updated it is going right to the top of the pile. I can’t recommend it highly enough.

————

Distil down all the critical points you might hear from a well-informed sustainable business consultant, using everyday language grounded in practical business fundamentals rather than emotive arguments, and deliver it in a form that even a slow reader can squeeze into an hour (with time left over to make a cup of tea), and you’ll end up with something like this.

As someone who works in the field and consults with some of the world’s biggest companies, I can honestly say that if I were given a chance to spend an hour locked in a room with a global CEO, to persuade him or her to think differently, I would seriously consider keeping my mouth shut and just handing over a copy of this.

Global CEOs: buy and read this.

People who have the ear of global CEOs: buy and make them read this.

People who consult with global CEOs: buy, read and absorb the simplicity and clarity of this.

Everyone else who cares about the impact of business on our planet and society: ok, you get the message!

Could business hold the key to universal access to safe drinking water?

Imagine a life without safe drinking water. It isn’t easy. Most of us take for granted that we can just turn on a tap and fill a glass. But that’s not an option for roughly one in four of the world’s population — the 2.1 billion people who still lack access to safe drinking water today.

With half of all hospital beds in low-income countries occupied by people with water-borne diseases, it’s hard to overstate the importance of reaching the UN Sustainable Development Goal of equitable access to safe, affordable drinking water for all by 2030.

While the current rate of change isn’t fast enough to hit that target, some fantastic research by EY’s Wayne Simper suggests grounds for optimism, thanks to the growing number of impact entrepreneurs innovating new models for the scalable and sustainable provision of safe water in underserved communities.

That story of optimism is one that Unilever and EY were shouting loud and proud at World Water Week in Stockholm, late last month, drawing on a joint report based on Wayne’s insights, and which I had the pleasure of writing.

Co-signed by Kees Kruythoff (President, Home Care, Unilever) and Alison Kay (Chair of the EY Global Accounts Committee), How can a trickle become a torrent? shines a light on the critical factors influencing impact entrepreneurs’ ability to build truly scalable and self-sustaining Safe Water Enterprises (SWEs) with the capacity to bring safe drinking water within reach of hundreds of millions more people.

The market leading SWEs, analysis of whose businesses forms the basis of the report, are already serving more than 15 million people across Africa and India, and we may only have scratched the surface of what these, and others like them, could achieve with the right focus and support. Wayne’s research and analysis suggests this rests on recognizing three things above all:

1. That the high fixed costs inherent in any SWE operating model mean that only SWEs that operate at scale can achieve true sustainability
2. That there’s no “ultimate” SWE model that works best in all circumstances, which means that the path to scale depends on finding the best fit to a particular blend of market conditions
3. That we need investors who are prepared to take a more balanced view of SWEs’ potential to generate returns — from a social impact as well as financial perspective — so as not to overlook promising and scalable models for safe water provision

Picking out just one of these themes, to give you a flavor of the kind of insight you’ll find in the report, it’s worth taking a closer look at the third point.

We’ve all seen the power of a “magic metric” to galvanize action, a prime example being how a single piece of data such as grams of carbon dioxide emitted per kilometer (gCO₂/km) has transformed perspectives and behaviors across the automotive industry. The report introduces a new one that has the potential to create a similarly seismic ripple effect: Impact Return on Capital, or IROC for short.

In the case of safe drinking water, this metric represents the number of daily water consumers whose needs can be served per thousand dollars of invested capital. It’s an important measure because it opens up an entirely new way of looking at the capital efficiency of SWEs — one that properly takes into account the purposeful trade-offs these life-changing businesses make, often intentionally running close to breakeven in order to keep prices low and make safe drinking water as affordable as possible.

With innovative SWEs clearly so vital to reaching the SDG target of equitable access to safe, affordable drinking water for all by 2030, we can’t afford to overlook any model with the potential to accelerate that access. Combined with more the more traditional measure of Return on Invested Capital (ROIC), IROC paves the way for a more holistic approach to building and evaluating investment cases that can help guard against this eventuality.

For more on this and other insights for accelerating growth of SWEs, I urge you to read and share the full report. The health and wellbeing of more than 2 billion people could depend on following the advice within its pages.

On democracy: the case for a referendum on the final Brexit deal

Amid the ongoing Brexit shitstorm, I find myself perplexed by the position of some – including HM Government – on the idea of a referendum on the final deal.

The government’s official response to a petition calling for said referendum reads as follows: “The UK Government is clear that it is now its duty to implement the will of the people and so there will be no second referendum.”

Contrary to the belief of some, I don’t dispute the result of the 2016 referendum. Regardless of my feelings as to how ill-conceived it was (in both motivation and execution), I nonetheless accept it was a decision that was democratically reached. However, I’m bound to point out a logical fallacy that lies at the heart of the government’s response, which is this: a referendum on the final Brexit deal would not be a “second referendum” (as in a rehash of the first). Rather, it would be a different referendum answering a different question.

The 2016 referendum result represents the view of the British people as to whether, in principle, they would rather leave or remain part of the EU, based on their beliefs as to what the relative benefits and consequences might be. A referendum on the final deal, on the other hand, would represent their view as to whether they feel it will be better in practice to follow through on the decision to leave, based on what the precise terms of departure actually are.

This is not the same thing at all.

Further, if you believe it was right and proper for the people to have a say in the UK’s future relationship with Europe by means of the former referendum then, logically, I struggle to comprehend why you wouldn’t adopt the same position with regard to a further one on the final deal.

The democratic rights and freedoms at play are no different. The only difference, in fact, is that, this time, it would be even more right and proper to exercise them. After all, leaving aside subjective opinions on the political and economic fallout, there were no immediate practical implications to the former referendum, other than to trigger Article 50 and commence negotiations. A vote on the final deal – when we will have much more substantial idea of what the upsides and/or downsides of leaving will actually be – is of infinitely greater consequence and therefore even more worthy of being subjected to a public vote.

Let’s state things even more baldly:

If you agreed with the need for the first referendum, there is no logical reason to oppose a further one on the final Brexit deal. There is only an emotional one – the fear that, this time, the result might be different.

This, too, I find perplexing, since, if the case for leaving is as clear and obvious as many Brexiteers purport it to be, then why should that fear exist?

There are only two viable answers to that question, it seems to me. The first is that people aren’t as confident in the benefits case for Brexit as they outwardly claim – or at least not as confident as they once were that a majority of their fellow citizens still see the world as they do. The second is the utter chaos within HM Government’s ranks and the consequent hash they seem to be making of the negotiations – in this case, the fear stemming from the prospect that the final deal bears little relation to what many Brexiteers wanted, and which therefore waters down or undermines many of the benefits they thought would flow from the “hardest” form of Brexit.

Here again, though, you would think this only adds more grist to the mill, strengthening the case for a referendum on the final deal even further. After all, it matters not what you think the deal on the table ought to be. It matters only what it is. And irrespective of whether you are a Leaver or a Remainer, if you think the country’s being sold a pup, you should have the chance to express that view.

In praise of doughnuts: restoring the environment as a key dimension of inclusive growth

As the great and the good gather in Davos for the World Economic Forum Annual Meeting, you can be sure that there’ll be plenty of name checks for ‘inclusive growth’.

Commonly defined as enabling as many people as possible to contribute to and share in the benefits of economic growth (or words to that effect), it captures the need for governments and business to recast our model of growth to one that works better for everyone – spreading prosperity, opportunity and reward more fairly; treating tackling social inequality and driving up productivity as interconnected; and rethinking our account of economic progress so that we measure not only the rate of growth, but also the quality of that growth and people’s ‘lived experience’ of it.

Not much for me to argue with there, right? Well, no, except for the fact that I can’t help feeling an important part of the equation has been left out.

That nagging feeling was brought into sharp relief recently when a colleague shared a copy of a report by Morgan Stanley, entitled “Inclusive Growth Drivers: The Anatomy of a Corporation”. In laying out the ‘business case’ for inclusive growth, it states:

In the broadest sense, inclusive practices can promote business aims in two key ways:

1. Improved Operating Environment: Inclusive growth creates more prosperous, secure, healthy and safe societies, which ultimately provide better operating environments for business and investment. Countries with higher levels of inclusive growth are more politically stable and typically have lower levels of social resentment and social unrest.
2. Enhanced Consumer Purchasing Power: By folding historically neglected swaths of the population into a growing economy, inclusive growth expands the customer base available to businesses. That benefit is extended by the better health outcomes and longer life expectancies correlated with reduced inequality.

It’s the second point above that sticks most in the craw, given the rest of the document goes on to say the square root of bugger all in recognition of the obvious environmental consequences of lots of people living longer and buying more stuff.

On the evidence of most viewpoints I’ve read on inclusive growth, this is by no means atypical. Quite the contrary, it appears a very common trap to wax lyrical about reducing social inequality while (consciously or unconsciously) neglecting environmental considerations.

It’s an omission I find totally baffling, given the obvious correlation between poverty and environmental degradation. Wherever they occur around the world, climate shocks hit the poorest in society hardest and, unchecked, the World Bank has estimated that global temperature rises could result in an additional 100 million people living in poverty by 2030. Surely, then, it’s as plain as the nose on my face that action to protect and restore the environment has to feature more prominently in the prevailing narrative around inclusive growth?

The great challenge facing us as a society – so that broader narrative goes –  isn’t only ensuring that everyone has the opportunity to contribute to and benefit from economic growth; it’s also making sure, at the same time, that we don’t irreparably damage our planet’s life-supporting systems. In other words, it’s to generate growth that is both economically inclusive and environmentally sustainable.

This is precisely where Kate Raworth’s doughnut economics model – with its combined emphasis on raising social foundations, while not smashing through the ecological ceiling – runs rings (pun absolutely intended) round just about everything else I’ve seen and read on the topic of inclusive growth.

If this model is new to you, it’s worth taking a moment to absorb the elegance of the metaphor. In the hole in the middle, we are living in a state of deprivation, with an insufficiency of the goods and services we need to lead a good life; beyond the outer ring, we are living beyond what the planet can support; it’s in between the two rings – in the doughnut itself – that we find the “safe and just space for humanity.”

It’s time to restore the environment to its rightful place amid all the talk around inclusive growth and the doughnut shows us how. (I always knew they were good for you!)