Owning the Future: The Emerging Ownership Revolution

"This book absolutely hit the spot for me because it helps make clear that business can be structured and designed in such a way that it can actually help bring about the kind of industrial change that Cradle to Cradle is describing, that it can actually help bring humanity into the Doughnut, to help meet the needs of all within the means of the planet. The way that we often think about business is that since it is out to make a profit for itself, it will inevitably undermine communities and run down the living world in the process. Is it possible to turn that around? I’ve presented the Doughnut diagram to hundreds of businesses over the last five years and heard very different reactions, ranging from those who would just do nothing—‘the business of business is business; everything we’re doing is just about legal and so we’ll just carry on’—all the way up to the highest aspiration of ‘what we see as our core purpose in the world is precisely captured in that Doughnut diagram: we see ourselves as helping to bring humanity into that space.’ And I was fascinated by what it is about the set-up of different businesses which means they will respond in these different ways. Discovering Marjorie Kelly’s book reinforced for me the idea that smart 21st century economics is all about understanding design, including the design of enterprise. She picks out five underlying traits—traits that she argues enable a business to be aligned with pursuing social and environmental goals. For starters, what is the enterprise’s purpose? Does it have a financial purpose to maximise profits or maximise shareholder returns, or does it have what she calls a living purpose? Well, if your primary purpose is to maximise your financial return it’s unlikely that you can manage to pursue another, very different goal at the same time. And, in fact, when I talk to senior decision-makers in companies today I see that so many face a tension between their desire to pursue a living purpose on the one hand and the way that they’re also owned and financed on the other. At the heart of her book, Kelly points out that it’s due to the structural design of businesses—how they are purposed, how they are owned, how they are financed, how they are governed and how they are networked with others. These traits make up the DNA of an enterprise and they shape so much of what is possible. In the last couple of years, I’ve spent more time than I expected talking with people in companies who, for example, might want to adopt a really ambitious living purpose which contributes to health and wellbeing in the world, but the company is owned by shareholders, and hence faces a deep tension, with shareholders continually saying ‘actually, your fiduciary duty here is to maximise shareholder returns’, so you can only go a part of the way towards of your greater purpose. “Instead of focusing on strong leadership and business responsibility, Kelly goes straight to the question of how a company is set up, structured, owned, financed, and networked” Kelly’s book is eye-opening because instead of focusing, as many authors do, on strong leadership and business responsibility, she goes straight to the question of how a company is set up, structured, owned, financed, and networked, and argues that this corporate DNA will empower, enable, or delimit what you can or cannot make happen in the world. It goes back to systems thinking: if you want to intervene to change the impact that businesses have in the world, then start by changing the purpose and structure. Models of ownership that are emerging now, such as employee ownership and cooperatives, are what Kelly calls ‘rooted membership’. As she says, there is an irony to the structure of mainstream business which is that shareholders, who may never even set foot inside a company, are seen as the ultimate insiders because they are the owners of it. And in tough economic times, those who work day-in and day-out at the company are made the ultimate outsiders because they get laid off in order to retain the financial value of the company for the shareholders. This is topsy-turvy. So, she advocates ‘rooted membership’ where those who own the company are the ones who actually work within it. In my book I write about this as one way of creating economies that are more distributive by design: in an enterprise that is employee owned, the value created is shared far more equitably with all of those who helped to create it – among employees and those who are connected through the supply chains. Just in the way that David Bollier’s book is about opening up a new appreciation of the commons in the 21st century—because technologies have changed, because structures of society have changed, the commons have a new chance to flourish if we name it, recognise it and recognise its potential—so too Kelly is opening up new insights into old models of business. People typically think of cooperatives as a 19th century movement but, actually, they are resurgent. What’s more, in towns and cities around the world, local governments are realising that if they encourage employee ownership, it creates what’s called a ‘sticky business’: it will stick around, rather than hot-footing it off to the next low wage industrial centre, because it has a connectedness to the community. So it’s re-embedding economic activity within the community, within society, within the living world, and has a greater chance of embodying social and environmental value. I really like the way Kelly explores how to bring together different aspects of enterprise design. There’s a great section in the book in which she talks with lawyers who are helping to draw up the legal frameworks for new business models. Just as we only give the commons a decent chance of thriving if we create legal models that allow creative commons licensing, so we need lawyers to help design enterprise models that actually allow a new form of economic activity an equal chance of thriving. I got very exciting about these when I first read the book because, to me, these are design questions and I wanted to put them at the heart of rethinking economics. In essence, I wanted to bring together ideas about redesigning the commons and enterprise, ideas about living between the boundaries of the Doughnut, ideas about framing and the power of visual metaphors—then wrap it together with systems thinking, and see what would happen when they all danced together on the same page."