The 300 Year Business Plan
Securing long term sustainable growth with regenerative business planning in this edition of Embetter Weekly #7.
Like yourself I am trapped into a system where quarterly planning is fundamental to run a business. But how sustainable is it really? Lately there’s been a lot of hype around purpose-driven business — but the question I ask myself is — is it enough and if not, how can we add another dimension?
I have started to play with the idea that no business is worth while, unless it can survive and thrive for at least three hundred years. Yes, say bye bye to Unicorn-frenzy and IPO-bonanza and build a long lasting business that will survive yourself and thrive for centuries. And even more important, create a business that is not only sustainable, but that is regenerative.
Regeneration
So what is “regeneration”? According to business consultant Carol Sanford regeneration is found only in the world of living systems. It offers us a paradigm for understanding life. Machine and other non-living metaphors cause us to conceive inaccurately. Living Systems offer us a set of First Principles that allow us to understand the world as alive and “at work”. A regenerative approach can be accessed through these seven foundational First Principles.
On her blog Carol states: The arenas of Regeneration First Principles are sourced from and contribute to:
- Whole: Capable of operating in a self-determining way within a system and interactively with other systems. Autonomous in its structures, systems, and processes. Keeps all individuals focused on their effect on the whole. Read more here.
- Potential: Initiating with potential, the intention and effect to be achieved, rather than existing problems and issues. Seeking disruptive, more fulfilling, and beneficial outcomes. Read more here.
- Reciprocity: Operating within living dynamic processes, making “fitting” contributions that benefit system health with care for contributions and outcomes for all. Read more here.
- Essence: Exhibiting singularity, working as “one of one” by increasingly bringing forth essence and non-displaceable uniqueness. Read more here.
- Nestedness: Embedded within greater and lesser systems, each playing a core role in the success of the whole and other nested wholes. Read more here.
- Nodal: Seeking the point of highest and most systemic return in interventions. Similar to acupuncture, where a single point or set of points are recognized as most effective for systemic regeneration. Read more here.
- Development: Seeking to grow and develop potential in each and all entities by focusing on increasing capacity of a whole(s) to be vital, viable, and able to evolve. Read more here.
From this natural theory of regeneration many business leaders and consultants are now looking into how we can create more sustainable business models that truly contribute to the growth and wellbeing of our community, society and planet.
What Is Great Business?
How would you describe a successful — or great— business? Securing tons of ROI on a quarterly basis? Maximising shareholder value? I have done quite a lot of research into this lately, since the first idea for Embetter — our media and analytics platform — took shape. I came across a great article Gideon Rosenblatt where he says:
One of the first steps to building regenerative business is rejecting the idea that your business is just a piece of property designed to maximize returns for your external shareholders. A regenerative business views profits as critical, but not as something to be extracted to boost dividends and share price. Profits are a vital source of fuel to sustain your mission and the full network of stakeholders who fuel it.
He then describes the different business models that are currently most used on a global level:
A. The Shareholder-Centric View of Business
B. Mission-Centric Organizations
C. People-Centric Organizations
And finally introduces a fourth, much more holistic and longterm model that could potentially make business thrive for centuries [my comment]:
D. Regenerative Business
The most successful emerging businesses are those that embrace their interdependence with stakeholders and take full accountability for their impact in the world. What’s more, these businesses will create powerful synergy between their stakeholders and their social missions. One of the most effective ways of doing that is through designing products and services so that when they are made and used by stakeholders, good things happen in the world.
He explains this way of running a business as much harder than being a traditional entrepreneur and are much less interesting to the financial institutions and media; since investors can’t buy stock in a company like Patagonia, so why report on the company in financial news?
Well, this suddenly changed dramatically when the outdoor company announced that they were going to donate all the Black Friday-sales to charities and grassroot environmental organizations.
Patagonia reached a record-breaking $10 million in sales. They expected to reach $2 million in sales — and beat that expectation five times over. Pretty incredible if you ask me. And probably a company that will last for three hundred years.
So, one could define a great business as a responsible business, always aiming at:
- Enriching people’s lives
2. Fostering regeneration of earth’s capacity
3. Fostering community uniqueness and democratic processes
4. Earning investors enduring ethical returns
The Seven Laws Of Regenerative Enterprises
In an article in HBR, the authors Kim C. Korn and Joseph Pine II write about the complexity of managing a company, especially in the long term.
Leaders today need a better approach. We need first to understand enterprises, along with the humanity and activities that make them up. And this understanding must be developed in light of (1) economic value creation — the primary function of a business enterprise — and (2) accepting the challenge that an enterprise ought to be able to thrive forever, if it chooses to. (For if your enterprise does not plan on thriving forever, expect it to fail eventually.)
They then write about the seven laws of regenerative enterprises:
“Identifying the aspects of value creation from this simple real-world perspective yields the following comprehensive framework, with its clear answer for each major question:
Humanity:
- Who creates value for the enterprise? The workers who choose employment in the work offered by the enterprise.
- Why do people come together to create value within the enterprise? To satisfy personal needs while meeting others’ needs.
Activities:
- Where does the enterprise create value? In enterprise-filled ecosystems.
- How does the enterprise create value? Through capabilities of people and activities.
- What value does the enterprise create? Economic offerings, bought by customers, which satisfy human needs through the businesses it establishes.
- When does the enterprise create value? In its decisions that operate, form, reform, and perpetuate the enterprise.
The Enterprise:
- In What Way do these aspects collectively create value? When integrated and unified.
So let’s formulate this collection of questions and answers as seven laws of managing. While we do not have space to develop them here — as we did from first principles, not from anecdotes and stories — you will see their connection to the aspects of value creation outlined above.
Humanity:
- The Law of Potential: Only the enterprise that unleashes potential, through meeting its workers’ innate needs, induces human engagement to its fullest.
- The Law of Meaning: Only the enterprise that infuses meaning, through a shared purpose, effects alignment among fully engaged workers.
Activities:
- The Law of Creativity: Only the enterprise that liberates creativity, through applying intuition and exercising free will, regularly discovers opportunities for surprising wealth-producing innovations.
- The Law of Learning: Only the enterprise that invigorates learning — through exploring, exploiting, and orchestrating — generates the knowledge necessary to persistently create new value among infinite possibilities.
- The Law of Humanity: Only the enterprise that enriches humanity, through the knowledge embedded in its business activities, creates offerings of unquestionable economic value.
- The Law of Vitality: Only the enterprise that attains vitality, through its incessant destructive recreation, produces the wealth necessary to survive.
The Enterprise:
- The Law of Coherence: Only the enterprise that sustains coherence in all its aspects, through ongoing orchestration, regenerates itself to thrive indefinitely.”
Write Your Own 300 Year Plan
Ok, so you are convinced that running a sustainable, even regenerative, business is the way of the future. Now comes the hard part; how would you proceed in writing your own 300 year business plan?
What kind of vision do you have for your company? What role in society does it play? What contributions to the evolution of our own and the planet’s wellbeing has it resulted in? How are the innovation cycles renewing themselves over time, without impacting nature’s ecosystem? How can you protect the company from market threats, competition and regulations? And so forth.
It’s not an easy task, but intellectually one of the most stimulating activities you will set out to do as a business leader and manager. Good luck!
With love,
RPK
