Accelerating the Shift to the Next Economy
“Economic growth in the form of increased GDP has long been used to measure a country’s progress and development. The assumption has been that high material welfare will give good lives, but GDP does not say enough about how people feel.”
Mike is President and CEO at Junxion. He has guided strategy development with early-stage ventures, decades-old corporations, not-for-profits and charities, and government agencies. Reach him via [email protected] and let's start an audacious conversation.
So said the government of Norway in a major announcement this summer, in which they also committed to developing “a national strategy for quality of life.”
Along with many leaders in government, business, academics, and civil society, they make the case that economic success is not merely about growth, as the news headlines might lead us to believe. It’s also about wellbeing.
Since the 1970s, particularly in America, social wellbeing has been demoted among economic priorities in favour of financial success. This has been a matter of public policy, legal standards, business management, and even business schools’ curricula. For companies’ decision-makers, ‘shareholder primacy’ has been the central touchstone of strategy. Those days are over.
To Navigate Multiple Global Crises, We Must Shift Our Thinking.
For all of our 20+ year history, Junxion has been focused on accelerating social and environmental responsibility—in companies, nonprofits, networks, and nations. Our work has taken us to five continents, where we’ve supported hundreds of clients in dozens of industries. If there’s one thing all those clients have had in common, it’s that they rejected the primacy of the shareholder. For them, a stakeholder model shaped strategy.
They hold a vision of a world made better by their work—better for the planet, better for their customers, better for their staff, better for their communities. Wide-reaching? Sure. Ambitious? Definitely. Audacious? Frequently.
Change is Afoot….
Today, countless grassroots efforts the world over are coalescing into a movement of movements in pursuit of ‘the next economy.’ The Wellbeing Economy Alliance—WEAll—is a 10-year project that aims to catalyze systems change toward the realization of a wellbeing economy. Junxion was proud to be among the group of WEAll members that collaborated to define five fundamental principles that will underpin this ‘next economy’:
- Dignity: Everyone has enough to live in comfort, safety and happiness.
- Nature: A restored and safe natural world for all life.
- Connection: A sense of belonging and institutions that serve the common good.
- Fairness: Justice in all its dimensions at the heart of economic systems, and the gap between the richest and poorest greatly reduced.
- Participation: Citizens are actively engaged in their communities and locally rooted economies.
So if this is what we need to see in our economic system, what should individual companies be thinking about?
Many of our clients are social venture leaders—people who run companies that were conceived with these principles in mind. They’re outperforming their peers in winning customers, earning revenue, retaining their staff, and delivering both profits and social impact.
Other leaders run what we might call ‘traditional’ businesses, but many of them are seeing the writing on the wall—particularly as the COVID pandemic has made it impossible to ignore the vast societal inequities that our current models have wrought. They can cling to old ways of doing things, earning diminishing returns. Or they can make the leap to the next economy, delivering the benefits and winning the rewards.
Six Imperatives for Next Economy Leaders
During the pandemic, Junxion wrote pieces on each of six imperatives leaders must consider as they shift to next economy thinking.
Each of these imperatives is a movement in and of itself. We invite you to dig in, learn more, and think about how your leadership, your organization, and your sector might stand up as a case study of the next economy.
1. Embedding Purpose
Mountains of data now show purpose-driven companies outperform their profit-driven peers. Companies that lead in meeting the needs of all their stakeholders have outperformed the laggards by almost 30% over the past four years, and by double-digit margins throughout the pandemic. Surely, you want that kind of growth?
Here are three steps to embed purpose and help shift your organization toward the next economy.
2. Leading from Values
Expectations shift with every generation. So companies that merely meet accepted social norms will be out of date in a few short years. If businesses want to emerge stronger post-COVID, they must embrace the values of the next economy—values that support transparency, connection and collaboration, social justice and equity, and values that respect the climate’s real limits.
Delve deeper into leading with values and cross the threshold to the next economy.
3. Upholding Trust & Transparency
Knowledge closely held concentrates power, which is fundamental to the individualistic definition of success in today’s hierarchical economic paradigm. Transparency fundamentally threatens that, driving the sharing of knowledge and thereby distributing power. In a time when public trust in institutions is eroding precipitously, more transparency is essential.
Here’s the business case for transparency, a fundamental principle of the next economy, and the means to unlocking your values-driven culture.
4. Engaging Stakeholders
Stakeholder capitalism has emerged as a response to the shareholder-centric approach to capitalism that has dominated business dogma for the past 50 years. Stakeholder engagement is now fundamental to best practices in public relations, community engagement, corporate social responsibility, strategy, and marketing. It’s also an essential corollary to transparency.
A lot of work has been done to define and design public and community engagement best practices–here are some of the fundamental principles for stakeholder engagement to help you get started.
5. Encouraging Equity
The work of economic recovery that lies ahead brings a profound opportunity to reshape our economies to serve all stakeholders. Amplify the unheard. Listen for the unspoken. In a white-, western-, and male-dominated paradigm, encouraging equity can be deeply personal work. But only by deepening awareness and engaging one another differently can we change our organizations.
Encouraging equity is a next economy imperative. Here’s our guide to encouraging equity in your organization.
6. Ensuring Wellbeing
Imagine for a moment an economy remade to serve the common good—an economy that seeks to maximize wellbeing for all people and nature. Consider the possibility that economics need not be about zero-sum profit-taking, but positive-sum wellness-building. What is your role in bringing this about? To be sure, this is not utopian thinking: it’s already emerging. And you can be part of the change.
Move over GDP. It’s time for a Wellbeing Economy—a new mandate for the next economy. Discover five ways you can support a Wellbeing Economy.
Junxion is just one of thousands of companies that are working alongside advocates, policy makers, NGOs, and other businesses to take steps toward the next economy.
Are you moving forward with us? Or are you hanging on to a past that’s quickly fading in the rearview mirror?
Let’s Be Audacious, Together….