Foreword
Colin Mayer, Oxford University
Martin Radvan, Mars, Incorporated
Oxford University entered into Mars’ mutuality journey three years ago when Bruno Roche and Jay Jakub together with a team from Mars Catalyst came to the Saïd Business School to give a presentation on what they called the “economics of mutuality.”1 Of course, we had some notion of the innovative management practices in which Mars was engaged but we had no idea of what we were about to hear. The effect was electrifying. People in the business school came away thinking that there was really something of substance that warranted careful and in-depth analysis. So the seeds for what has thus far been a two-year—and is destined to be a many year—collaborative research program between Oxford University and Mars, Incorporated were sown.
We started in earnest in October 2014 examining what this curious concept of mutuality meant in practice within Mars. We talked to people at all levels in the organization and in particular focused on a pilot study in Nairobi, Kenya, called Maua, in which Mars Catalyst (Mars’ internal corporate think tank) was actively engaged. What I came to realize were three things.
First, that mutuality was a process, not a realization. It was the exploration of the way in which business can implement structures, systems, and practices to derive benefits through conferring benefits. Mars was in the process of identifying these structures, systems, and practices through experimentation, observation, and learning.
Second, and as a consequence, academia and business had a considerable amount to contribute to as well as learn from each other. In essence, quite correctly, Mars appreciated that business was not about knowing but learning, and since academia is about researching and informing, there is a natural partnership between the two. Companies appreciate that they have a great deal to gain from the scientific and technical knowledge of universities, but few understand that there is a benefit from partnering with them in the discovery of new business practices as well.
Third, the nature of that partnership between academia and business is itself mutual in nature. The interests of business and academia are not naturally aligned. Business is immediate, private, and confidential; academia is long term, public, and open. The reason the two coexist as distinct entities is because of their differences. Forging a relationship therefore requires an unusual appreciation of the goals, constraints, and attributes of the two parties and an avoidance of a condemnation of their respective failings.
In that regard, the Saïd Business School at Oxford University was extremely fortunate to have been able to partner with Mars Catalyst, the think tank of Mars, which, as an organization that combines the research and practice of management, was able to offer the intermediation between the academic and business world that was required for the project to flourish. In particular, as the leaders of Mars Catalyst, Bruno Roche and Jay Jakub provided the vision, imagination, and leadership that were required to bring the program to fruition.
Like mutuality, the research program is a journey on which we have learned not only about mutuality in business but also about how to promote mutuality in business research. What this book represents is a remarkable description of the concepts that underlie that program and the journey by which those ideas have emerged. It is a story that is of immense importance in understanding what is required to reform business in the twenty-first century because, as we are all coming to appreciate, the failings of business are impoverishing us not just economically and financially but as individuals and societies.
Reforming business is essential not only for completing capitalism but preserving it as well. We have seen only too clearly over the last few years the political as well as social ramifications of our failure to do that. We have made remarkably little progress, and time is running out before distrust and mistrust rise to a point where the fabric of our economies that we take for granted will be eroded.
This book provides us with the basis for understanding what needs to be done and what business can do. We should all take heed and learn the essential lessons that it seeks to teach us.
Colin Mayer, former dean, Oxford University’s Saïd Business School (SBS); Peter Moores Professor of Management Studies, SBS; author of Firm Commitment: How the Corporation Is Failing Us and How to Restore Trust In It
My journey discovering the economics of mutuality had humble origins starting with my own employment as a very junior associate in the Mars company more than thirty years ago. Initially my understanding was limited to a very simple relationship between myself and the company—I worked hard and I received new career opportunities and progressed financially. During the business period of rapid geographic expansion, I then witnessed firsthand what an enormous difference a successful business can make to all of its stakeholders, including employees, suppliers, customers, and a myriad of their dependents and networks. Experiencing this very tangible, indeed visual, impact of shared benefits in a variety of geographies from the Middle East to Central Europe left me in no doubt of the underlying and fundamental truth in the principle.
During my time managing the Catalyst function, I was exposed to the “what is the right level of profit” question and resulting research. This in turn seeded thoughts and a deep personal curiosity as to whether one could measure or even perhaps quantify our impact beyond financial measures and then indeed influence the delivery of that impact.
On assuming leadership of the beverages division of Mars, it was of course clear that rapid growth of this business was an imperative. But in addition to growth with all its inherent benefits, another question loomed: Could we drive a course of action to benefit specific stakeholders, and would such action enable us to realize the “biggest bang for our buck”? With the help of the authors’ analysis of shared value, a crystal clear “call to arms” emerged. The coffee growers at the very start of our value chain deserved the most attention. Personal visits to these source geographies only reinforced this conviction. As relatively small buyers of the total coffee crop, we had the luxury to decide where to buy from and hence where to focus our attention. In combination with our financial capital measures, human, social, and natural capital measures allowed us to select where we had the best prospects for success and enabled empirical measurement of our progress. The prospect of setting a business target of X% growth, in addition to Y% improvement in “social capital” of the growers, came in sight. In addition to the personal motivation this delivered, I was overwhelmed by the general engagement this generated within my management team and many other involved associates.
When I moved to run the William Wrigley Co. (a division of Mars), I carried these formative ideas with me. Within the Wrigley value chain we identified mint farming as a potential opportunity. However the same value chain analysis revealed that in the case of gum, a much larger opportunity lay in improving the share of prosperity within our distribution network—specifically in emerging markets. With Kenya as a fertile ground for experimentation, we set about testing our ability to generate micro-entrepreneurs. Our first attempts were abortive and taught us many hard lessons, but slowly, with the help of local partners, we established improved methodologies and rapidly we were able to foster some very promising results. Strict attention to deployment methodology and rigorous scientific discipline in measuring the impact allowed us to refine our approach, improve our operations, and start to measure our impact on the society in the areas of downtown Nairobi in which we worked. No experience can be more personally humbling yet motivating than meeting our entrepreneurs—for example a young mother who had moved her income from subsistence to a level where she could support her children’s education.
We have subsequently rolled this out into other areas (e.g., the Philippines), and we now have very exciting test programs in rural China, including the use of new e-technology to measure our impact.
Sadly we cannot right all the wrongs and injustice in our world, but through the approach outlined by the authors I am convinced that we can and we do make a significant difference to many, many lives along our value chain. Therefore my fervent wish is that we simply continue to share, learn, and accelerate our progress.