Are We Doing Good or Just Feeling Good?
The numbers are impressive. 50 million consumers make at least some purchasing decisions based on a company’s claims of ‘doing good.’ That’s 1 in 4.6 Americans or about 22% percent of the US population over 18 years old. On average, 160 million Americans donate $229 billion each year to charity. That equates to approximately $1,000 for each American over 18 or 2% of the average US household income. Billions more are invested each year in social enterprises (broadly defined here as anything serving the public good while attempting to generate profit), ranging from renewable energy to recycled paper products to jobs skills programs and so on. By this account, it seems we are swiftly moving in a positive direction where people are making informed decisions, donating to organizations trying to make a difference and fund business that benefit the 3 P’s—People, Planet and Profit. But are we?
We are indeed making progress, but I would contend that is it very slow. There are however, two kinds of slow progress. Let’s call the first incremental change. This common concept is simply the process of taking small, intentional and forward steps on a path to some end goal. Let’s call the second form course correction. In this scenario, imagine a ship traveling thousands of miles across the ocean. If it changes course by just one degree early in its voyage, by the time it reaches the far shore it will be hundreds of miles away from its original destination. In navigation, that’s bad. In social change, it can be very good.
Currently we are making incremental change, but a pace that is not keeping up with the growing challenges we face (climate change, famine, political instability, water access, corruption and so on). But what if rather than making concerted effort after concerted effort to achieve small wins, we muster all of our weight and focus it on nudging the Ark of Challenges just a degree or two towards a better shore?
The reality is that we have almost no idea if the billions of dollars spent, donated or invested on incremental change are having any scalable success. Yes, there are numerous examples of localized successes which absolutely must be applauded. But are the large issues being tackled at their cores, or are we simply acting like Bugs Bunny using gum to plug up a hole in the dam that in turn causes two more to open up… in other words, using stop-gap measures that don’t solve the real problem at hand?
Imagine if we took the collective weight of all these people and dollars aimed at doing good and leveraged that towards a common goal—a reformulation of our financial markets full of incentives and rewards, for managers, consumers, policy-makers, communities, investors and the planet alike. A sort of collective self-interest where people win the most when everyone wins. To be clear, I am not proposing some sort of Marxian system of mutual benefit through artificial equality, but a free marketplace built upon and rewarding a new set of end goals.
How would this look? What is the role of investors, business leaders and the public? In Part II I’ll dig deeper into the roles of these various actors to see if its possible to nudge the boat just enough to make substantial infrastructure change. Part III will explore some examples– the Good, the Bad and the Well-Intentioned.