What Sets Us Apart?

From the start, the Economics of Mutuality has been responding to the diagnosis that most institutions today are failing to adjust to the urgent needs of humanity and that power has shifted to multinational corporations. Therefore, the responsibility for sustainable human existence lies upon the shoulders of business leaders and on their capacity to leverage the efficiency, scale and resources — financial and otherwise — that business provides to make business a force for good.

 
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A Unique Endeavour

The Economics of Mutuality’s distinctive features set it apart from other approaches to sustainable business. It has not emerged from an isolated university or a non-governmental organisation without business experience. On the contrary, it has developed within the context of multinational corporations and academic institutions working together to tackle significant global problems.

This unique combination of business practice and extensive research has yielded a robust and agile management innovation with holistic applications that go far beyond the typical spheres of sustainability. More than a theory or a set of case studies, the Economics of Mutuality is a management innovation designed to restore trust in a broken system. 

Unlike the many corporate social responsibility initiatives that have appeared in recent years, the Economics of Mutuality is applied at the grass roots level. Instead of relying upon a charismatic CEO or lofty targets to drive change from the top-down, such as Conscious Capitalism or the B-Team, it enables transformation from the bottom-up through engaging business unit leaders who are passionate about improving performance and impacting society and the planet for good. 

The Economics of Mutuality equips these leaders with the vision, tools and processes to reshape fundamental practices, such as performance metrics, accounting methods, ecosystem-thinking and modes of profit construction. It provides innovative strategies that target investment in people, their communities and the environment as the drivers of financial and non-financial performance. For more information, see What Is the Economics of Mutuality?

The reason that such an unusual approach is able to exist lies in the nature of its development. The Economics of Mutuality is based upon a decade of trial and error within a diverse range of business environments. World-class experts from across the academic and business spectrum have embraced pragmatism, understanding, determination and humility as essential values within the process.

Looking forward, our ambitious goal is to see all business practice evolve from a narrow focus on profit-maximisation. We are confident that the Economics of Mutuality offers a powerful framework to achieve this transformation.

 


The State of Play Today

Our current economic system is failing to meet the needs of people and planet. It requires more than reform — the entire structure must be transformed. We have to move on from the 70s and design a system fit for the complex challenges of today — a system that performs for people, planet, and profit.

There are plenty of extensive and bleak assessments of our current global environmental, social, and economic contexts. Many observers come to the conclusion that, simply put, today’s economic system is failing. Natural resources are increasingly scarce, public trust in global business and economic institutions is low, while inequality continues to rise.

Tackling the world's complex, interdependent and significant problems will require everyone across sectors and geographies to work together. The UN's Sustainable Developments Goals (SDGs) present a global consensus of these challenges.

We are most interested in the crucial role that business and financial sectors will play in tackling them. Here is our reasoning:

  1. Due to their size, modern corporations and financial institutions wield unprecedented power and reach, which poses a threat to our very existence as long as they continue to perpetuate a broken model.
  2. The Profit-maximising model, designed in a different world 50 years ago, has resulted in businesses operating on unsustainable trajectories.
  3. Therefore, without transforming the business and financial sectors, our economic system will remain sub-optimal - maintaining a destructive and distorted status quo.

Economics is fundamentally about the management of scarce resources. Today, we are facing new scarcities that our current model is unable to manage effectively.

 
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Attempts to Change the Status Quo

Just as there are many assessments of our present global economic troubles, there have also been a great number of attempts to find solutions - particularly within the business sector. Since the 90s, CSR initiatives have been a common way for business to 'give back' by providing a mixture of money, time, and expertise to social and environmental causes. 

Today, such attempts by business to self-regulate and ‘do less bad’ have proliferated - clustering around discourses on 'sustainable' and 'responsible' business or 'ethical' and 'circular' economies. Some well-known examples include Triple Bottom Line accounting, Creating Shared Value, and inclusive capitalism.

Alongside these ideas, many businesses, networks, and foundations have emerged to develop and implement them. It has become a crowded and sometimes confusing space in recent years. Nevertheless, there is a lot to learn from and a lot to praise. 

Most would agree that business needs to be a force for good in our world – for the sake of people and planet. Therefore, the question is no longer 'if', but rather 'how' business should fulfill this responsibility. We believe that the status quo can change, but only when business is fundamentally transformed. It will not be enough to play the offsetting game – doing ‘less bad’ and ‘more good’. The time for incremental change has passed. The time for transformational change has arrived.

 
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Neither charity nor corporate social responsibility, but rather a way for sustained profitability, Economics of Mutuality argues for making money in a way that remembers the meaning of the marketplace.

Dr. Steven Garber
Principal, The Washington Institute

 
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Transforming Business for Good

Our desire to transform business emerged from a key question that we were asked in 2007: ‘What is the right level of profit for the corporation?’ This question strikes at the very nature of business. Is there really a different purpose to business than to maximise profit?

We, like many others, believe without doubt that there are other purposes for business than simply to deliver shareholder value. The Economics of Mutuality is a new management theory and business model designed to measure, manage and deliver holistic value for people, planet, and profit. It empowers companies to compete not only to be the best in the world, but also to be the best for the world. 

In the business and financial sectors, performance is synonymous with financial returns. However, companies engage, create, manage, and destroy multiple forms of value: human, social, and natural capital. Why is company performance not also measured according to these non-financial capitals?

Business will only manage what it measures, and will only perform when well-managed. Consequently, it needs to measure and manage both financial and non-financial capital in order to perform holistically and compete to be the best for the world.

Business is by no means all bad. It's capabilities in efficient management of resources and value creation at scale is crucial - these must be preserved while its purpose is transformed to be a force for good.

 
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Getting into the 21st Century

It is the end of business as usual. As globalisation and digitalisation takes us further into the 4th industrial revolution and the global challenges that we face become more acute, the businesses that thrive will be the businesses that transform. They will embrace the complexity and ambiguity of our world and maintain a synergy across people, planet, and profit. The Economics of Mutuality will help to get us there.

 
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