“How’s it going?”
I expect you also get that question a lot these days, especially with the pandemic still dominating our daily lives. For those of us in the sustainability arena, the question is often about our efforts to transform companies to more sustainable enterprises. I’m an optimist. I think the seven helping forces in the 21st century sustainable enterprise force field are overcoming the six hindering forces. Why?
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A company's business model is its blueprint for what it does, how it does it and how it generates enough income to be at least a going concern. Traditional 20th century business models imply that a corporation is an island, independent of societal of environmental boundaries and myopically focused on maximizing shareholders wealth. It's time for an upgrade to a model that is fit-for-purpose in today’s volatile and risky economy. As encouraged by the Business Roundtable, a 21st century business model explicitly acknowledges the company's surrounding environment and its purposeful stewardship of the wellbeing of other stakeholders. Building on other guidance on what a business model should contain, here are the 6 design criteria for 21st century business models. Read More
For the last 50 years, Milton Friedman's three-word corporate purpose mantra has been imprinted into the mindsets of business school graduates: "maximize shareholder wealth." The maxim worked well ... for the 1%. In August 2019, the Business Roundtable acknowledged that 20th century shareholder-primacy capitalism has failed the rest of us and declared that the new / improved 21st century corporate purpose is to "maximize stakeholder wellbeing." Stakeholder-primacy capitalism is not a revelation for the founders of the B Corp movement who have shown that operating for the benefit of all stakeholders is more rewarding in today’s tumultuous economy. The new stakeholder-centric purpose drives 21st century capitalism – and changes everything.
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Company purposes have evolved. The usual explicit purpose of a company is to provide products and services that improve the wellbeing of stakeholders like customers or shareholders. That's a necessary purpose, but it is no longer sufficient. To multiply the power of its purpose, a company needs to be purposeful about its intended positive impacts on the wellbeing of two critical implicit stakeholders: the environment and society-at-large. That is, "3 purposes are better than 1." Read More
