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Entries in economics of mutuality (33)

Tuesday
Dec162014

Catalyst: Cracking Complex Business Challenges for Mars

When Associates think about research at Mars, many point to our efforts in cocoa sustainability or WALTHAM’s study on human animal interaction. But did you know that Mars also has its very own Think Tank that delivers solutions to some of our most complex business challenges? 

For more than five decades, Mars has invested in Catalyst, a distinctive capability made of highly skilled, diverse Associates with unique access to experts. Catalyst takes creative risks to conceptualize, develop and pilot breakthrough business solutions to help position Mars purposefully in the thought leadership space.  Catalyst’s work has been recognized as cutting edge by scientific and business communities and continues to be a source of competitive advantage for Mars.

“By harnessing innovative and abstract ideas from a vast pool of stakeholders, including internal, external and academic experts, Catalyst unlocks transformational business strategies,” said Bruno Roche, Chief Economist and Managing Director of Catalyst.  “We strive to be a change agent for Mars, helping the company deliver long-term growth that we can be proud of.”

Catalyst is behind some of our company’s most exciting initiatives, including:

  • The launch of new inclusive business model pilots with Wrigley of Kenya and in the Philippines, in slums and remote areas where Financial Capital is scarce.  These pilots have demonstrated that delivering and measuring Human Capital (individual well-being) & Social Capital (trust within a community) among the Wrigley micro-entrepreneurs is a driver of increasing Financial Capital -- a major breakthrough that is unlocking a sustainable route to market, and that is scaling up.
  • A partnership with the Said Business School at Oxford University to co-develop a new management theory whereby Mutuality is driving business performance – through modified management practices and metrics; and
  • A contribution to a special edition of “the Brewery,” for the World Economic Forum in Davos in January, 2014.

Additionally, through its Labs, Catalyst is working to harness abstract ideas and transform them into strategies to help the company deliver growth. For instance, the Demand Lab has made great strides to bring discipline and rigor to our marketing activities by utilizing insights from applied mathematics, statistics and data mining, as well as psychology, cognitive sciences, neurosciences, ethnography, and behavioral economics. The results have been incredible – through its work, the Marketing Lab has doubled the efficiency of Mars’ advertising and deciphered the role of media in the laws of growth for our brands, bringing huge savings to the business and giving Mars a set of capabilities envied by our competition.

Catalyst has also made great achievements through its Culture Lab, which has developed a ‘best practice’ integration of acquisitions into Mars (based on a fusion of sociology and business anthropology), bringing huge value and enabling smooth cultural integrations. Furthermore, Catalyst’s Mutuality Lab has influenced the company’s 25-year vision, Mars' recent corporate branding, and is developing a new holistic performance measurement system for mutuality across the entirety of our business & identifying corresponding management practices to enact mutuality (Economics of Mutuality program).

'The only thing we have in common at Catalyst is that we have nothing in common,' an associate once observed. Catalyst is not a traditional team, by design.  It strives to be an agile organization made of associates & fellows from different backgrounds, nationalities, walks-of-life with a common passion to leverage values, sciences & knowledge to improve the world, and a relentless conviction that business/entrepreneurship is a powerful vehicle to achieve this goal.  Over its lifetime, Catalyst has demonstrated that Forrest Mars Sr's 1967's intuition that 'management is to apply sciences to economic problems' was correct. "The economic problems of today are not the same as in 1967, the sciences have also evolved in a dramatic way, yet Catalyst’s approach to transform abstract academic thinking into breakthrough business solutions and a means to ensure changes 'stick' culturally remains more relevant today than ever. " said Bruno.

So what’s next for Catalyst?

--Bruno Roche

Friday
Dec122014

Mutuality: Define, study, teach

In June of this year, Mars Catalyst and Oxford University's Said Business School entered into a multi-year partnership to explore the concept of mutuality in business and how to enact it.  The collaborative research program will build on the long experience of Mars, Incorporated, which has Mutuality as a core principle alongside Quality, Responsibility, Efficiency and Freedom.  It will also build on the breakthrough work of the company’s corporate think tank — Catalyst — in designing and testing new non-monetized metrics to help the business move from a profit maximization model to a holistic value optimization approach across People / Planet / Performance that could one day help Mars become the most mutual company in terms of fairness and shared benefits.  

Mutuality as a business concept is rapidly gaining support since the global economic crisis of 2008 and as consumers demand more demonstrated ‘values’  behind the value that they seek with their buying habits.  It is not enough, therefore, for one company to become more mutual in its business practices, as one cannot be mutual in a vacuum.  The Mars/Catalyst-Oxford/Said partnership, therefore, is about spreading the word to the next generation of MBAs and to rising business managers through executive education.

Specifically, the partnership will:

  1. Help define mutuality generically and develop a broad understanding of the values and principles of mutuality and their application in different business and economic contexts;
  2. Identify the management practices that can enact mutuality in different ways;
  3. Develop a business management theory based on mutuality; and
  4. Co-create MBA and executive management training curricula that will position ‘mutuality’ as a viable business model alternative to the current dominant Chicago School of Business Financial Capitalism approach.

Former Oxford Said Dean Colin Mayer is leading the Oxford side of the partnership with Mars/Catalyst along with former Harvard Business School Professor and current Said Dean Peter Tufano.  Prof. Mayer's essay on Mutuality and Morality in Business appeared in the January edition of The Brewery, a trade publication that featured writings on mutuality from Mars Chairman Stephen Badger, CEO Paul Michaels, Bruno Roche and myself from Catalyst, and other leaders from global businesses and government.

This partnership is the start of an exciting journey, whereby the world can become a better place through more mutual business practices.  Stay tuned!

--Jay Jakub

 

Wednesday
Nov262014

Stephen Badger, Mars Board Member, on Mutuality

Last week the Global Action Platform named Mars, Incorporated as the recipient of the first-of-its-kind “Global Shared Value Award” at the third annual Global Action Summit in Nashville, TN. Mars Board Member Stephen Badger received the award on behalf of the company, and he took the opportunity to talk about the Five Principles that guide the coporation, particularly Mutuality. The full text of his remarks are below.

My great grandfather had a powerful vision. The family today and Mars itself shares that vision and the conviction that Mutuality is the best way to do business.  And we’re looking for others who share this vision with whom we can partner to explore how to best to bring it to life.

"Thank you, Dr. Zakaria, and thank you to our hosts here at the Global Action Summit for this honor. I’m humbled and grateful for this recognition.  I’m grateful because it reinforces and affirms what Mars and our 70K associates are trying to do around the world, and I’m humbled because while we’ve been in business for over 100 years, I feel like we’re still getting started when it comes to bringing Mutuality to life.

"Our associates and the Mars family believe deeply in 5 Principles that guide us in how we run our business, and even our lives.  Mutuality is one of those 5: and mutuality speaks to Mars’ desire to benefit to all who come into contact with us…whether through employment, through supplying products or services, through the communities in which we operate, or through the purchase and use of our products. 

"The other 4 Principles are Quality, Responsibility, Efficiency and Freedom (and by Freedom we mean financial freedom to chart our own course and make long term decisions).  These 5 Principles are both static and evolutionary, and we seek to live up to them and bring them to life in all we do.

"Almost 70 years ago, in 1947, my grandfather, Forrest Mars Sr. penned a letter that spoke to his vision for Mars, Incorporated. It was nothing remarkable to look at – just a few short sentences of typewriter ink on a piece of paper that’s long-since grown yellowed and faded.

"It stated that Mars, Incorporated and all of its associates should promote a “mutuality of service and benefits” with every stakeholder that comes into contact with the business: from consumers to distributors, competitors to direct suppliers, governmental bodies to all employees and finally to its shareholders-who were called out last in the list. 

"In essence this was his attempt to answer the most fundamental questions that all institutions face. Why do we exist and what is our purpose?  He believed that his business was about more than generating profits. He laid out his belief that Mutuality was the purpose: that long term ‘win-win’ relationships were the key to success.  And we still believe that deeply whether it relates to, for example, supplier negotiations, the supply chain itself in a broader sense, the pricing and promotion of our products, the tax payments duly levied by governments, or the environment at large. 

"But how can we know when we’re really living up to our principle of Mutuality?  I’m certain that we don’t always.  And what is the right level of profit after all? What are in fact the metrics of Mutuality?

"Since our inception, Mars, Incorporated has grown to become one of the largest and most successful food manufacturers in the world.  We have operations in 74 countries, across almost 400 sites, where we manufacture confections, drinks and food for people and pets, and we have 11 brands with over 1 billion dollars in sales.  But size and scale are not an end in themselves.  And they certainly aren’t a reason in themselves for the family to want to keep the business privately held.

"Generating  Mutuality in all we do is, however, a rallying cry: for the family and the associates.  And today we have a 25-year vision that states, among other things, “Our belief that principled business can make the world a better place. Our ambition is to achieve Mutuality with our Associates, all stakeholders whom we touch, as well as for the planet. Our behavior demonstrates principled leadership and builds stakeholder trust.”

"And we’ve embarked upon bringing Mutuality to life both qualitatively and quantitatively.  In fact, we have a formal relationship with Oxford’s Said Business School at the highest levels to do just this: to quantify what Mutuality really is….to define the metrics for it across the entirety of our business.

"Furthermore, if I may, some examples of how we’re bringing Mutuality to life include: our sequencing and publishing of, without restriction, the cocoa genome so that we and others can work to improve the yield and disease resistance of this important global crop; our commitment to 100% of the key ingredients we use: cocoa, fish, tea, coffee and palm oil, with others to follow, as coming from certified sources by 2020 (and that includes economic, social and environmental components to that certification); our commitment to strengthening the whole cocoa supply chain for all farmers (including their access to nutrition through the African Orphan Crops Consortium); our precedent setting and industry leading global commitment to all our confectionery products having portion sizes of no more than 250 calories;  and the grand challenges that we’ve set for ourselves to create a range of nutritionally concentrated foods to address the needs of those whose children in many parts of the world face systemic malnutrition and stunting.

"My great grandfather had a powerful vision. The family today and Mars itself shares that vision and the conviction that Mutuality is the best way to do business.  And we’re looking for others who share this vision with whom we can partner to explore how to best to bring it to life.  It’s our belief that world truly needs it and that in fact it is the best way to do business-for all concerned.

"So I’m grateful and humbled to accept this award on behalf of all at Mars.

"Thank you very much."

--Bruno Roche

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