Can we build resilient enterprises?

 
As one of those who believe that we can - and we must – harness the big engines of commerce to create a livable world, I was delighted with this recent article from Strategy and Business:  Emerging alternatives to the shareholder-centric model could help companies avoid ethical mishaps and contribute more to the world at large.
 
            “I’m deeply convinced that [humanity’s] future relies on our ability to explore and invent new business models and new 
             types of business corporations.”
-          Franck Riboud, CEO, Groupe Danone
 
              “The financial meltdown of 2008 was a direct result of the pursuit of immediate profit by investment bankers and
              mortgage brokers who disregarded the impact of their actions on customers, on the larger economy, and indeed on
              stockholders and the company itself in the long term. Those who wanted to operate with integrity found it difficult…”
 
The article includes some juicy examples of effective pioneering.
 
….”Grameen Danone Foods Ltd. is a pathbreaking collaborative en­terprise,” launched in 2006, “a 50–50 joint venture between Groupe Danone — the US$16 billion multinational yogurt maker — and the Grameen companies,” founded by Muhammad Yunus, who won the Nobel prize that year. “ Yunus called the joint venture a ‘social business’ which he said could be a pioneering model… a hybrid between nonprofit and for-profit...”

“Novo Nordisk… has adopted an ambitious charter that spells out the com­pany’s values and commitments, including a commitment to ensuring that all products and services ‘make a significant difference in improving the way people live and work.’ Each year the company board must report to the foundation board on how it is ensuring that operations are ‘economically viable, environmentally sound, and socially fair.’ The foundation board includes an electrician, scientists, a physician, and a lab technician, so that participants represent many relevant points of view…”
 
“As Brooklyn Law School Professor Dana Brakman Reiser observed in a recent paper, Google.org is not a traditional foundation but a division of Google, standing alongside the engineering, sales, and finance functions, yet tasked with addressing climate change, disease pandemics, and poverty. By eschewing tax-exempt status, it gains the running room to combine investments with grants as it pursues its ambitious goals — drawing fully on Google’s staff, technology, and products in the process. As Reiser put it, “Google.org’s use of an integrated for-profit division inaugurates a new model: ‘for-profit philanthropy...’”
 
“Conventional methods for preventing abuses, such as regulation and criminalizing egregious behavior, are only partially effective. In the long run, the best way to get to the root of the problem will be for corporate ownership and governance design itself to evolve…”
 
“All the successful examples embody a view of enterprises as living systems. Most economists and law professors still view companies primarily as forms of property, owned through their shares. But for-benefit design starts with the assumption that companies are organically evolving entities, living social systems — in other words, human communities. And their design reflects that view…”
 
“We live in an age when short-term pressures have allowed speculation to overtake the more traditional, human functions of business. Alternatively designed companies offer important lessons in how corporate ownership and governance can evolve differently. And they’re important in their own right as well, for they are likely to prove better adapted to the cultural and ecological demands of the 21st century than the industrial age models they might one day replace. Such businesses may seem like anomalies today. But they more closely reflect the priorities that have engendered the longest-lasting businesses throughout human history.”
 
This Business Anthropologist says, THANK YOU.  And BRAVO.
Yes we can
 

 

 

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Are You Fit to Thrive in Any Economy?