Learn
from
yesterday
LEARN FROM YESTERDAY
For the past fifty years, the primary focus of the business world has been to maximise profits and shareholder return. Prior to this, businesses existed to keep their customers happy, and they were motivated to make the best products to ensure that customers came back time and time again. Adam Smith, the man considered to be the “father of capitalism”, felt it too obvious making this statement about business as, in his words, “What else could the purpose of business be?”
In 1970, Milton Friedman, the famous Nobel winning economist, wrote an article in the New York Times stating that the sole purpose of business should be to maximize shareholder returns and that “any other use of shareholders’ funds was irresponsible”. The business world rapidly adopted this new way of being and fifty years later, we are still doing business by this mantra.
LEARN FROM YESTERDAY
This new model has been incredibly successful contributing to improved standards of living, decreased mortality rates, extended life spans. In fact it has, for so many reasons, altered the trajectory of mankind.
However, it has also led to stagnant wage increases, catastrophic consumer debt, growing inequality, unbridled consumerism, destruction of our natural resources, global warming, climate change, and so the list goes on.
“Infinite growth on a finite planet is simply not possible” (Paul Polman former CEO Unilever).
In the mid-nineties, John Elkington coined the phrase “the triple bottom line” with the intent to challenge business leaders to re-think capitalism from a purely money focus to a more holistic view that includes people and planet. Unfortunately, 25 years later he was disillusioned with the manner in which business leaders had embraced the triple bottom line, and the slow pace at which the business world was evolving to become sustainable, so he issued a public recall of the triple bottom line, claiming it had become mere window dressing with business leaders using it to balance trade-off’s rather than doing things differently.
LEARN FROM YESTERDAY
He said that “the triple bottom line was never meant to be a mere accounting tool but to rather provoke deeper thinking on how to revolutionise capitalism and its future”. He said that “CEO’s and business leaders will move heaven and earth to hit their profit number but the same is not true for their people and planet targets, meaning that the triple bottom line has failed in its endeavours to bury the single bottom line”.
“If cancer is life run riot, then plastic-clogged oceans, obscene wealth divides, the undermining of democracy, and climate-induced societal collapse are symptoms of our current form of capitalism running riot” (John Elkington, author of Green Swans).
If being green is about doing less damage, and sustainability about reaching zero, net positive is about making things better.
It’s time for business to make things better.