The Economy We Want: A vision for a world of Wellbeing
If we don’t clarify the shift in the economy, organisations and individual lives that we want, then the status quo will continue to dominate and we will not achieve a sustainable future. Sustainability leaders globally seem to be saying the same thing about what is wrong and how to fix it but in slightly different ways and focused on different parts of the puzzle. A whole picture view is therefore key to action-focused conversations and unlocking coordinated action globally.
Victoria and her colleague Professor Lorenzo Fioramonti set out that at the heart of the problem is the deeply held idea that financial income is a good proxy for our long-term collective wellbeing. This has led us to govern for a GDP economy, serviced by profit-driven organisations and powered by financially focused work and lives.
The new market economy that is being born, but which we need to start shouting for with one voice, is:
MACRO
A Wellbeing Economy – anchored to long-term wellbeing for all people and planet (sustainability) as the goal and operationalised within healthy thresholds of social and environmental systems (sustainably achieved).
MESO
Purpose-Driven Organisations (PDOs) – organisations whose ‘reason to exist is an optimal strategic contribution to long-term wellbeing for all people and planet’ (PAS 808: 2022). Purpose-driven organisations (including government as organisations) therefore operationalise the WE.
MICRO
Meaningful work and lives – humans empowered to serve the Wellbeing Economy through their work in Purpose-Driven Organisations and where work is a source of wellbeing and not a drain on it.
As established in ISO37000, the first global consensus on governance of organisations, governance is at its heart about: DIRECTION objectives and parameters – with strategy being how to best achieve the objective within the parameters, OVERSIGHT – have we achieved the objectives within the parameters? and ACCOUNTABILITY – we are accountable to significant others for whether the objective has been achieved within the parameters and what will be done to rectify things if not.
We have gone wrong by governing economies and businesses primarily for money (financial objectives) and focusing on the parameter of money (healthy stocks and flows of financial capital) (logic 1). Some firms are moving to long-term financial self-interest – keeping the same objective of money but moving the parameters for decisions to include the healthy systems, multi-capitals and stakeholders. This is where there starts to be a business case for authentically investing in ESG and serving all stakeholders (logic 2).
A truly sustainable economy and sustainable business is purpose-driven (logic 3). Purpose Driven Organizations (PDOs) govern for these three levels for the innovation objective of long-term wellbeing for all (sustainability) within thresholds of healthy systems, capitals (including but beyond financial) and stakeholders.
If we can govern strongly for these ‘outer edges’ of decision-making that really matter to us, then we can remove much of the red tape and bureaucracy holding the right innovation back, minimise central allocation and get humans, companies, capital and governments all pulling towards long-term wellbeing for all.
This requires whole system change, but Victoria believes we can focus on four strategic pillars: Purpose, Governance, Marketing and Leadership & Culture.
Purpose
Purpose is having a clear, authentic and meaningful reason to exist that ensures daily decisions work for, not against, a sustainable future. More specifically: ‘a reason to exist that is an optimal strategic contribution to long-term wellbeing for all people and planet’ (PAS 808: 2022). This nearly always requires a journey of deep introspection and organisational transformation.
Dr Victoria Hurth’s work has focused on helping reveal the consensus about what purpose is and how to put it into practice (see ISO 37000 and PAS 808 sections). With purpose-washing pitfalls abounding and social and environmental systems under severe threat, and purpose the key to supercharging the innovation needed, getting purpose right has never been such a top priority.
Governance
Good governance is vital to ensuring a sustainable future and purpose is central to good governance.
In her work, Victoria has co-led the process to create the first global consensus benchmark in organisational governance (ISO 37000: 2021). This benchmark outlines 11 principles of good governance: purpose at the centre, four foundational principles (Value Generation, Strategy, Accountability and Oversight) and six supporting principles (Risk Governance, Leadership, Social Responsibility, Data and Decisions, Viability and Performance over time and Stakeholder Engagement). As established in ISO37000, governance is at its heart about direction, oversight and accountability. We have gone wrong by governing economies and businesses primarily for money (financial objectives) and focusing on the parameter of money (healthy stocks and flows of financial capital) – we can fix this and unleash the market economy for a sustainable future by governing for an objective of long-term wellbeing for all within parameters of healthy systems, stakeholders and capitals (including financial but also human, social and natural).
Marketing
Marketing is an organisation’s (and society’s) value generation nerve centre. A sustainable future will require marketers and creatives to recognise their position of influence on both footprint and brainprint and use all their tools to drive system, organisation and behaviour change. Since most marketing runs counter to a sustainable future, we need to rethink and re-enact marketing to drive urgently needed solutions. Much of her work on marketing and purpose is incorporated into the groundbreaking 8 week online course by the University of Cambridge Institute for Sustainability Leadership: Sustainable Marketing, Media and Creative.
Victoria has contributed extensively to realigning marketing so it drives purpose. Her central proposal is that if we stick to a traditional BAU 'make-and-sell' approach to marketing, the one that short-term profit maximisation demands, marketing will fuel unsustainability. While a 'sense-and-respond' approach brings stakeholder demands into view this BAU approach still locks marketing to unsustainable actions. A purpose-driven 'guide-and-co-create' approach is the only one that faces reality head on and unleashes marketing. Sense-and-respond is made real by the Evolved Value Framework (EVF): six key principles that, if followed, ensure that marketing is aligned with purpose and sustainability.
Leadership & Culture
Leadership and culture are necessary components to achieving meaningful change that will contribute to the Wellbeing Economy and the shift to purpose-driven. Being purpose-driven represents a change in worldviews to a very different kind of pinnacle value-generation that is orientated to an optimal, strategic contribution to long-term wellbeing for all.
In her work, Victoria notes that while it is possible to intervene to changeculture, it is a complex system of interactions between all levels of the organisation and cannot be determined by any one party alone. At the same time, we need to recognise that the governance system is the most powerful way that culture is shaped through structuring worldviews in objectives, parameters and related routine decision-making (policies, KPIs, incentives, etc.). And, since both cultural hardware (systems, processes, structure, etc.) and cultural software (ways of thinking and acting) are underpinned by organisational worldviews, intervening concertedly in these shared base assumptions, especially through leadership in governance, is likely to be necessary to secure enduring change.
