4 min read
Jan 2024

Oxford Forum 2019 Photographs

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Practicing Purpose at Scale

The Economics of Mutuality started life as an attempt to answer a question posed in 2007 by a Mars shareholder — ‘What is the right level of profit?’ Since then, it has evolved into a breakthrough management innovation and a new growth model that empowers business to adopt a more complete and mutual form of capitalism that is fairer and more efficient than the dominant profit-maximizing business models of today.

It is based on four management principles: put purpose at the center; embrace your ecosystem; financial capital is necessary but not sufficient; and the traditional profit contribution is misleading. In discussing how to put those principles into action, a number of key lessons emerged.

A corporate purpose must be defined and articulated as seeking to solve a meaningful challenge – a simple description of what the business does or a statement of its values is not enough. The people who are involved in or affected by this purpose define the boundaries of the ecosystem in which the business operates, which goes far beyond the traditional boundaries of the firm.

Delivering the purpose will also draw on four different forms of capital, or types of resources: the land and environment (natural capital), skilled and knowledgeable men and women (human capital), communities (social capital), and money (financial capital). Understanding and valuing each of these capitals, and measuring their creation or depreciation can result in a fully mutual account of profit and loss.

Putting purpose into practice will require new thinking, courage, boldness, and humility. But more than anything it will require knowledge. Mars’s decision, announced at the conference by Jean-Christophe Flatin, that it will be making the knowledge created by the Economics of Mutuality project freely accessible to all through the creation of a new foundation, will enable leaders to start ‘making decisions that finally reconcile the contradictions that have been in opposition for centuries.’

 


Case Studies

 

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Academica:

Closing the Income Achievement Gap

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BASF:

Impact Valuation Informing Management Decisions

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Conservatorio:

Urban Regeneration Without Gentrification

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LafargeHolcim:

Integrated Reporting in the Construction Industry

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SAP:

Developing Integrated Thinking Through Reporting

 


Photographs

 

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