Understand the different types of listing processes and the differences between them. The startup journey, described a financial sense, is a process of raising larger and larger amounts of funding to support growth. This money usually comes from private investors like venture capital firm and [...]
Redefining success for a more sustainable future
By Lina Bodestad
The social responsibility of business is to increase its profits.” Those ten words were both the sentiment and the very title of a famous New York Times article by economist Milton Friedman in 1970. As history goes, Friedman would later be awarded the Nobel Prize in Economics for his work.
Fast forward 50 years to the 2020 World Economic Forum in Davos, which dubbed its overarching theme: ‘Stakeholders for a cohesive and sustainable world.’ At Davos, world leaders delved into the details of making a global shift toward ‘stakeholder capitalism’ and away from shareholder ditto.
With the privilege of hindsight, we see that our ideas of profits-before-all and scale-to-exit measures for success have had detrimental effects on our lives and the world. As for the environment, climate change is affecting environmental ecosystems at increasingly alarming rates.
January 2020 was the hottest in recorded history. Media images of the roaring wildfires in Australia seemed to depict hell on Earth. In February this year, a heatwave in Antarctica melted 20% of the ice on one island–in nine days. There is now little doubt left that we need to make a massive shift in how we live our lives and how we conduct business to halt this detrimental development.
When it comes to humans, you don’t need to be a psychologist to know that mental illness and stress-related health issues are increasing around the world. For example, a staggering 83% of American workers suffer from work-related stress, resulting in 120,000 early deaths each year and US$300 billion in losses for U.S. workplaces (American Institute of Stress). Frankly, we seem to be pushing ourselves beyond the limits of our ability and, at the same time, are becoming less and less sure of exactly why.
Speaking of ‘why,’ in psychology, there is a model called the ‘Sense of Coherence Scale,’ which is used to map the overall mental and physical well-being of a person. It was developed by Aaron Antonovsky in the late 20th century and has since been corroborated by decades of research.
In essence, the model stipulates that we need three things to thrive. Firstly, we need our lives to be comprehensible. We need to understand what’s going on in our lives and feel a sense of cohesion or predictability. The opposite of predictability is, arguably, uncertainty, which is a significant driver of modern-day stress, according to the American Psychological Association.
Secondly, our lives need to be manageable. We need to have enough resources–be it money, time, mental energy, knowledge, competence, or social support–to meet the many demands placed upon us by society and ourselves.
Thirdly, and–according to decades of research–most importantly, our lives need to be meaningful. We need an intrinsic reason to get out of bed in the morning–a sense of drive that comes from within and a feeling of being part of something greater than ourselves, contributing to something beyond our individual limits.
Clearly, a lot of what is happening in the world today provides the complete opposite of these three things. Today’s world is, to many, neither comprehensible nor manageable, resulting in people falling prey to stress-related and mental illnesses at alarming rates. An underlying factor in this issue could very well be a decreasing sense of meaningfulness in a world that seems to be spinning faster with every breaking dawn.
What is the point of all this? If we are driving climate change in a direction where the very extinction of humans is now on the radar, do I really need an umpteenth pair of shoes? Questions like these are seeping into people’s minds, and public figures like Greta Thunberg are bringing them to the negotiating tables of world leaders in business and politics.
So, what can we do? Is there still time to turn this ship of ours in a new direction? Let’s take a moment to play with some thoughts, keeping in mind that every great idea that ever changed the world was initially considered entirely crazy.
One of the culprits in our unhealthy perception of success is our narrow definition of ‘work.’ During the Industrial Revolution era, work broadly meant producing goods or managing others doing so. Today’s definition is clearly wider, but seemingly not wide enough. What if ‘work’ could mean producing something valuable, useful, and sustainably viable for the benefit of others? Many new jobs would have to be created, while millions of existing ones would need to be scrapped.
What if activities like exercising, taking short naps, or reading non-work-related literature could be considered aspects of ‘work,’ since such activities are scientifically proven to boost productivity, creativity, and wellbeing? How much more sustainable could the workforce be if one hour per day was devoted to personal growth activities? Could this change, in fact, increase, rather than hamper, business growth in the long run? The $300 billion in stress-related costs could surely be put toward something better. Plus, we know that even today, approximately two hours of a workday is wasted on non-work activities (Salary.com).
What if we tossed Freidman’s maxim out the window and redefined the concept of corporate success? If economic profit is not the sole purpose, but a byproduct of different goals, what could those goals be? Contributing to x percent decrease in CO2 emissions, creating y new jobs in a region, and saving z tons of food from going to waste could be new objectives.
What if the seventeen United Nations Sustainable Development Goals were turned into business KPIs, alongside traditional performance indicators? What about a ‘level cap’ (to borrow from the gaming world) which dictates that any individual or corporation could increase its worth up to a very generous, but also sustainable, limit? Or what if corporations could keep growing, as long as they maintained a certain level of efficiency and effectiveness, scaling back on bureaucracy and administrative bloating that doesn’t contribute anything meaningful?
What if businesses needed to prove how their products or services positively impact society and if they fail to do so, their business would be banned? In other words, is it an unquestionable right to manufacture items such as sugary cereal, low-quality garments, or cheap plastic toys that break or go missing within minutes of getting into the hands of a child?
The implication here is, of course, also a moral one: Who gets to decide for the rest of us what is truly healthy or sustainable? Nevertheless, we are already seeing industries like fast fashion being put under hard scrutiny for producing cheap garments at an unsustainable rate. No one said the path toward sustainability wouldn’t be rocky.
Milton Friedman would likely have scoffed and called me a socialist. Right there is another problem in today’s discourse: a polarizing, all-or-nothing rhetoric. It is my firm belief that we can increase human welfare, dial down mass consumption, move toward a sustainable future, and let businesses stay for-profit at the same time. Surely there is a vast continent of middle ground between unrealistic utopian ideals and the wealthiest 26 people on Earth owning more than the poorest 50% of the world’s population (Oxfam).
Goodnight, Mr. Friedman. Good morning, a less straining and more sustainable future.
About the Author
Lina is a licensed psychologist based in Sweden who specializes in UX research. She is the founder and CEO of Crimson Vale Consulting, a startup that develops apps to gamify and simplify everyday family life. Lina has a life-long love of tech and psychology and is one of Sweden’s first UX psychologists
This story was originally published in Jumpstart Issue 29: Back to Basics as Goodnight, Mr Friedman.