by Alan Moore on 31st January 2019
At the beginning of 2019 Larry Fink CEO of Blackrock Investments wrote his yearly letter to CEO’s, Purpose and Profit. He argued that there is an urgent need to take the long-term view, but that short termism to protect legacy businesses, and monopolistic powerbases is detrimental to what happens next.
Fink believes that ‘Purpose Will Save The Day’. Companies that place Purpose at the heart of their plans going forward will be the ones who will be more resilient and successful.
His letter reminded me of a number of questions which I have kept asking over the last decade: Why are we in business? What is the role of business? Whom does business serve? What is value? Is the pursuit of profit at all and any cost the only reason to exist? What is the role and purpose of the institutional investor?
As the outgoing CEO of Unilever Paul Polman asked, ‘Why should the citizens of this world keep companies around whole sole purpose is the enrichment of a few people?’
But I think we can go much further to look at a restorative design model that can deliver the necessary conditions for all life to thrive. In 2016 I published a book called ‘DO Design. Why beauty is key to everything’. It’s based on a lifetime’s work as an artist, designer, and business innovator.
The business case for beauty
Beauty is resilient, it’s ‘life affirming’. It gives back to create more life. To create more life that is worthwhile, we need a world populated by Beautiful Businesses. Beauty is key to nature’s foundational design model, its very DNA. Natures design always posses purpose and function, is highly effective and always regenerative even through life cycles. Nature is never extractive.
The laws of the universe are described as Beautiful, just ask the Nobel Prize winning physicist Frank Wilczek, who said, “having tasted beauty at the heart of the universe, we hunger for more.” There is a reason every human soul hungers for beauty as we intuit beauty as truth and truth as beauty. ‘Beauty’, as the award-winning architect Alison Brooks said to me, ‘is part of our humanity; there is no one who doesn’t want to live a beautiful life, have beautiful relationships or beautiful experiences’. And as for scale; we know the earth is vast and the cosmos a little larger, that’s been hanging around for a long time. Is not what businesses want to do – hang around for a while?
The optimising business metrics in use over the last 30+ years have not enabled all life to thrive. Quite the opposite, these metrics have delivered a rather unpleasant bill.
Leading economists have argued for a fundamental redesign of business for quite some time. What does it mean when only twenty-six people now own more wealth that 50% of the world’s population?
There is a cri de cœur from the Millennial generation, young people with no ticket to the future, who have got no automatic job, won’t have jobs for life, and won’t have pensions. Many of them feel they won’t ever be able to afford to buy a house. But while they lack economic security, they are steeped in values. They think a lot about values, they think a great deal about the environment, but they also think a lot about social responsibilities and equality and diversity. This generation, want the cool thing and the right thing. And, they’ve all had enough of ugly. This is not about, ‘either or’ – such a limiting phrase, but ‘AND AND’. These people want positive change.
Forbes Journalist Esha Chabbra writes “Every year, Deloitte conducts a survey to get an idea of what Millennials think of business. In 2018: ‘A majority of millennials in every market agrees with the statement that businesses have no ambition beyond wanting to make money.’ Across mature economies as a whole, the figure is 67 percent.’ That’s 67% of Millennials surveyed who feel that business is designed to do nothing more than rake in money. People are frustrated and tired of the corporate ways. They are looking for a new model forward. The survey backs it up, arguing that the motives don’t align”. According to a study done by The Society for Human Resource Management, “94 percent of millennials want to use their skills to benefit a cause and 57 percent wish that there were more company-wide service days.”
Beauty is restorative
Beautiful Businesses are by their very nature restorative as supply chains, because they take less, make better with less, and waste nothing; what is known as, ‘The TOTAL’ or, Financial Common Sense. There is growing evidence that restorative businesses are more resilient and financially successful. In a Deloitte study 73% of CFO’s agree that there is a strong link between sustainability performance and financial performance.
Geanne van Arkel, Head of Sustainable Development EMEA at Interface, explained to me “We have no choice (if we want to be in business in the medium and long term)”, says van Arkel, “we have changed our goals to become a company that is restorative”. Interface now utilizes fishing nets abandoned in the world’s oceans and are prototyping a process that delivers -2kgs of carbon for every meter of carpet tile it manufactures. It has future proofed its business model and in 2018, it is a Fortune 100 company with a market cap of $1.53 billion.
But to make these financial gains one cannot treat sustainability like another Ad Word. It takes focus and participation as part of a business strategy. Konrad Brits, Founder and CEO of Falcon Coffees shared his views with me: “Sustainability has become a very overused and diluted word and it has been treated as a destination. You can go through a checklist and tick enough boxes and you are a sustainable business. I always think that it is more like treading water. Delivering real sustainability requires constant activity because we live in a dynamic environment where things are changing all the time from the weather, to people, to the economy, to the availability of resources.”
In Brits’ and Van Arkel’s experience, a genuine transparent restorative business model will bring financial reward. Brits explains further, “I am not talking about collecting prizes and getting certifications and having plaques on the wall, just the everyday transactional execution, when the culture of your business has a positive intent. It is very, very good for business.”
Forward thinking companies are now interested in restorative supply chain designs that additionally offer a better experience for their customers, and a better return for their investors. Zero waste is a growing movement and a design revolution, which will make waste so valuable the last thing you will want to do is burn or bury it.
Purpose before profit
Beautiful Businesses are purpose and values led. Over a decade-long period a Harvard Business School study showed purposeful, value-driven companies outperform their counterparts in stock price by a factor of twelve or 133%.
But these things are not new – they are about a more nurturing philosophy and worldview. Brunello Cucinelli has been making clothes very successfully since 1978. Cucinelli pays his staff more than the average wage for their jobs, insists they work no longer than eight-and-a-half hours a day, and spends around 20% of his profits on what he calls “the gift”. He also runs an oversubscribed craft school, where students learn tailoring, stonemasonry and embroidery, among other disciplines. His is the Crafting Organisation. Cucinelli quotes Rousseau, “human beings are creative only when the environment around them is in harmony with creation.”
The Economist in an article on Cucinelli, has this to say,
Capitalism and Kant don’t always go well together, and pleasing the stockmarket isn’t Cucinelli’s priority. His ideal growth rate, he says, is 10%: “the hedge funds aren’t interested in that but the pension funds are…we want only a smooth growth level. It must be gracious. Everything in this business has to be gracious. Profit is the gift when creation is perfect.”
But Cucinelli’s investors have nothing to complain about. He floated his company in 2012, presenting the chief executive of the Milan stock exchange with a 16th-century edition of Aristotle’s “Nicomachean Ethics” on the day of its initial public offering. Since then, his shares have tripled in value; in the same period, the Dow has risen by around a half.
Everything man-made is designed
Then there is Design which is not incidental to modern economies it is integral. Why? Because everything man-made is designed; culture, products, services, code, farming, architecture, materials, you name it, the chair you are sitting upon, or the back lit screen you are reading this on. Everyday we have the opportunity to make everything meaningful, valuable, useful qualities that lift up our humanity. Design of outstanding products and services delivering customer satisfaction results in sustained financial performance. McKinsey found that those with the strongest commitment to design and the most adept execution of design principles had 32% more revenue and 56% more total returns to shareholders.
Last year I interviewed the founder and then CEO of Xero, Rod Drury. Xero is a suite of online accounting software for small businesses, accountants, and bookkeepers. It enables its users to track and manage cash flow processes. Xero has put design, purpose and legacy as core to their mission. In fact they describe themselves as a Beautiful Business. Beautiful in their purpose, and beautiful in their enterprise design. Design says Rod enables beautiful experiences in a multiplicity of ways.
I asked Rod should all businesses be beautiful? He replied,
“Yes, I think the world now needs businesses to step up. There is a bit of commentary about business is evil, it is all about profit. It is not. Businesses are here to solve social problems we need to create job opportunities, for more people and we need to lead by example. Especially as the world goes cross border and gets more and more global, so I think it is a time for businesses leaders to speak out, business is good and we think about, internally our purposes is to create employment for our network of customers and our accounting network and if we do that we know we leave the world in a much better place”.
The time of thoughtless design for thoughtless consumption is at an end, argued Dieter Rams, one the late centuries most influential product designers.
Because as Peter Childs Head of Dyson School Design Engineering at Imperial London said, “In design we bestow or give to the design, hopefully something wonderful, its all about bestowing to your design, to your venture, something wonderful, something beautiful”. He went onto say “Engineering can sometimes be viewed as a partner, or a cousin to design. Sometimes the words engineering and design can be used interchangeably, so I think designers are very aware of the importance of ascetics and by implication beauty, so is it a lens – very much so, that engineers and designers can readily use. Whether we are looking at products, services, systems or the design of experiences I think there is great message there and it is about going beyond just satisfying the clients, it is about giving something that is truly desirable, maybe even truly honourable”.
Beauty in workplace cultures
Beautiful Businesses create workplace cultures are created from a deep knowledge and understanding of generosity. Positive experiences generate deeper engagement, wellbeing, community and trust. We can only be our most productive when we feel our best. One does not need a survey to make the point of its obvious truth. Moreover people work for meaning, to create meaning. We are meaning making creatures. So I share a story about generosity and its benefits.
Olafur Eliasson — is an artist, known for his extraordinary work with light. The Weather Project at the Tate Modern’s Turbine Hall perhaps is one of his best known works. Olafur has a studio in Berlin where he employs a staff of 90. Everyday all staff sit down to eat freshly cooked vegetarian food, sourced mostly within a 10km radius of Berlin, or grown on the roof of the studio. The kitchen is not an addendum tucked away in a basement, it is at its the heart – centre stage. The daily communal lunch, Olafur believes, is about showing respect and hospitality to his staff, its about dignity. “Cooking,” says Olafur, is caring for others, it is a gesture of generosity and hospitality that functions as a social glue; it amplifies social relations and translates thoughts into food, into giving and sharing”. In fact Olafur wrote an entire book about his kitchen, not his art.
We need Beautiful Leaders & Makers to make more Beautiful Businesses.
Beautiful Businesses Leaders respond to a higher order calling of service to a greater good. Their leadership is framed by values and informed by purpose. They know how to lead with compassion, grace and elegance. They know beauty is hard won but it’s effects and benefits are enduringly satisfying. Like the craftsman, the Beautiful Leader purpose driven, is the bringer of peace, and, the maker of Civilisation. Beauty takes us beyond the language of sustainability, because it is restorative and regenerative. It says all life thrives.
Here are some final thoughts
Our journey has to start with stepping onto the path of becoming a better human, it is a return to our true human nature. Can we be more beautiful in our thoughts and actions? If we are able to bring beauty into who we are, and, what we do, how we frame ourselves, then we increase our capacity and potential. Its as simple as that. How do you turn up everyday with beautiful intention? And, what are you values that inform what you do?
What does it mean to be a more Beautiful Leader? How can beauty inform how we lead, how we create the necessary conditions to inspire others? How can beauty inform the decisions and choices we make? How does connecting beauty to purpose take you to becoming a more able and graceful leader, a more effective and empathetic leader? Imagine being in a boardroom where a decision is going to be made with far reaching consequences, just for short term gain. What if, someone asked the question ‘is that the most beautiful decision we can make… together?’
Beautiful Makers, make things that matter. They make better things for better reasons. Better makers build a restorative world. Within 10 years all businesses will move beyond optimisation of current enterprise designs, supply chains and manufacturing to become restorative in all that they do. Take less + make with less + waste nothing is the destination. I leave CFO’s to do the math.
I believe Larry Fink is right about Purpose, but I think we need investors, Chairpersons, boards, and yes CEO’s to be talking about beauty in its many forms. What if beauty as a frame enabled a more thoughtful and effective means of investing? Something I know a number of institutional investors are keen to look at. Why? – because, they want to be around for a long time to come.
A CEO asked me the other day if beauty and design could help them create a more enduring and successful business? I answered ‘why would you want to do it any other way, you can’t do business on a dead planet’. Not even investment companies and institutions that in fact hold more power than anyone else on this blue planet. And that is why beauty is the ultimate metric.
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Beautiful Business helps people, teams and corporations deliver authentic, profitable restorative businesses through our Beautiful Leaders & Makers Programmes, and mentoring. For more information on how we can help you firstname.lastname@example.org