How Doughnut Economics Helps Businesses Adapt to a Regenerative Future
Join us on a journey of pioneering enterprise redesign.
Think of Doughnut Economics as a compass for human prosperity in the 21st century. The aim is to meet the needs of all people within the means of the living planet. The ‘Doughnut’ consists of two concentric rings: a social foundation, to ensure that no one is left falling short on life’s essentials, and an ecological ceiling, to ensure that humanity does not collectively overshoot the planetary boundaries that protect Earth’s life-supporting systems. Between these two sets of boundaries lies a doughnut-shaped space that is both ecologically safe and socially just: a space in which humanity can thrive.
The starting point of Doughnut Economics is to change the goal from endless GDP growth to thriving in the Doughnut. At the same time, begin economic analysis by seeing the big picture and recognising that the economy is embedded within, and dependent upon, society and the living world. Doughnut Economics recognizes that human behavior can be nurtured to be cooperative and caring, just as it can be competitive and individualistic. Critically, it calls for turning today’s degenerative economies into regenerative ones.
And, importantly, it calls for turning divisive economies into far more distributive ones.
Lastly, Doughnut Economics recognizes that growth is a healthy phase of life but nothing grows forever and things that succeed do so by growing until it is time to grow up and thrive instead. This has profound implications on business and finance.
A journey into the deep design of business
Doughnut Economics calls on businesses to demonstrate how they are going to transform so that they will belong in a future that is regenerative and distributive. The answer is a journey into the deep design of business itself — explored through the Purpose, Networks, Governance, Ownership, and Finance of any business. Through these, we can ask if businesses are designed to deliver on the 20th century question of how much value can we extract through this enterprise or the 21st century question of how many benefits can we generate through this enterprise. Transforming business design to focus on benefits will be central to enabling regenerative and distributive dynamics.
These design layers powerfully shape the strategic decisions and operational impacts of businesses, and ultimately determine whether or not businesses can transform to become part of a regenerative and distributive future. By diving into five layers of deep design, this approach reveals both design blockages that prevent transformative action, and design innovations that can unlock its possibility. Regenerative and distributive strategies, practices and ideas can be unlocked through such changes in business design, thereby helping to bring humanity into the Doughnut. For a quick intro to enterprise design, check out our video.
Ultimately, enterprise redesign is a post-growth question. Given the current dominant models of business design lock-in a focus on growth of sales, market-share, margins and dividends, redesigning businesses aims to free businesses from the parameters of this kind of obsession with growth.
Embracing ambitious transformations
A renaissance in redesigning businesses is now emerging. Businesses are using emerging governance models and ownership structures to unlock bolder ambitions. British soapmaker Faith in Nature decided to give nature a seat on its board. US brand Patagonia transitioned ownership to a foundation controlled model. From El Puente in Germany to Riversimple of Wales, companies are creating new multi-stakeholder governance models. Dutch chocolate brand Tony’s Chocolonely recently gave some specific rights to a committee of independent experts tasked with speaking up if the company moves away from its social purpose.
Meanwhile other businesses like Einhorn, Ecosia and Cafe Direct go further and are using emerging Steward Ownership models that give foundations, NGOs and communities controlling shares to keep the business focused on the ecological and social transformations they need to undergo. Other companies like Eileen Fisher, Inc., King Arthur Flour, New Belgium Brewing, Richer Sounds and Namaste Solar have embraced employee ownership as a model to lock in their social and environmental purpose. These emerging ideas in enterprise design are opening up a new era where businesses can pursue sustainability far more ambitiously.
Getting into the Doughnut will require a new set of enterprise designs. This is because businesses need to go beyond the easier wins in sustainability to ambitiously embrace more difficult transformations that can create far greater social and ecological benefits. This means pursuing ecological ideas like circularity and biomimicry, while increasing commitment to address social issues like rising inequalities and respecting human rights.
Emerging business designs that unlock such ideas contrast starkly with the outdated business designs of the 20th century. The old designs have held back businesses from pursuing social and ecological goals, and limited them to only doing so where they can deliver maximum growth in sales, margins and dividends — particularly in the short-term. In pursuing sustainability, this acts as a straight-jacket on the world of business.
Instead, 21st century designs are enabling a broader set of strategies, allowing businesses to facilitate internal investments, transform product designs, transition to new models of manufacturing, and embrace deep partnerships with workers and communities across their operations and supply chains. They are also aimed at protecting businesses from hostile take-overs or generational change that could undermine sustainability commitments. As this diverse range of enterprise designs emerge, they increasingly showcase new possibilities for the role of business, the benefits it can generate and the speed with which it can pursue the needed transitions to help humanity into the Doughnut.
We hope this journey of enterprise redesign is embraced by businesses of all kinds and sizes, as a way to unlock the regenerative and distributive strategies and transformations that are urgently needed.
Inspired? Here’s what you can do next:
- To help anyone who works with and within a business through this journey, DEAL have created a tool that’s available for use by all values-aligned change-makers — with versions for a two-hour and five-hour workshop. If you’re a business, you can use it directly within your organisation for self-reflection and to explore the possibilities of transforming your deep design.
- If you’re a consultant, business network or other organisation that works with businesses, you can use the above workshops with your clients or network after registering here.
- The Doughnut Design for Business tools also contain links to relevant resources from models and ideas such as Steward Ownership, Community Ownership, Post Growth Entrepreneurship and Financing Structures for Impact Enterprises.
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