Towards a new me-AND-you economic paradigm

Original Book: Edward Freeman, Kirsten E. Martin and Didhan L. Parmer (2020): The Power of AND – Responsible Business Without Trade-Offs.

The book at a glance. The book “The Power of AND” is a helpful summary of today’s various ideas for a more human and sustainable business practice. Above all, it offers a new imperative for the role of business for society, resulting in five shifting managerial key concepts: 1) prioritizing purpose (beside profits); 2) creating value for stakeholders (beside shareholders); 3) seeing business as embedded in society (beside markets); 4) recognizing people’s full humanity (beside their economic interests); and 5) integrating ethical criteria into business decisions (beside economic criteria). The authors provide empirical evidence and a lot of examples, which show that doing business and progressing humanity is not an “either-or” trade-off and promote a full integration of both into a new business narrative. Only if businesses start to act in such an integrated, holistically responsible way they can serve both an ethical and economic advancement of our society.

What were my three most inspiring insights?

1. We need a new story of business. For decades we’ve lived up to the “old” narrative of business that tells us that business is only responsible for profits and shareholder value, acting relatively separate from society. This narrative does not hold true anymore, but a new concept has still to emerge.
2. Ethics have always been part of business. We just neglected them as a decision criteria.Firms tried to delegate ethics to social responsibility units in order to liberate the core business from it. But that’s not possible – doing business always has ethical implications, whether we consider it consciously or not.
3. Stakeholder interests are interconnected. Businesses need to address all stakeholder interests in holistic ways. This means it's necessary to think about stakeholder engagement in terms of 2-way, collective and interdependent relationships that are transformative in nature rather than in discrete one-way economic transactions with four independent stakeholder groups.

How does the content relate to today’s times?

This book couldn’t be more spot on! We need businesses to renew their own identity and role in a way that actively contributes to the solutions for the burning societal issues of our times, such as climate change, inequality, demographic changes. Otherwise firms stay on the side making part of the problem - aggravating, exploiting or even causing them - risking to lose their societal legitimation.

How did the book change my thinking?

It’s not about firms going from profitability to humanity now. It’s about uniting the two concepts. Adding some ESG goals under our short-term profit logic will not be enough. For a paradigm change we need the courage and the ability to integrate ethics and humanity into the core of our business models on “eye-level” still with the profit-logic – without compromises or trade-offs.

What did I appreciate most reading?

First of all, the book provides a carefully researched and very helpful overview of all current sustainability and social value concepts (e.g. conscious business, ESG, JUST economy, B-Corporation, just to name a few) that have emerged today. In this welcome but still incubation-grassroots landscape of alternative business concepts, this book is a helpful conceptual guideline to carving out the 5 core managerial pillars of a “new” model of doing business. It’s nothing particularly new – but the great value of the book is bringing it all together in a compact way. Above all, the book is written to the point in very clear and easy-reading language, summarizing main points of each chapter at the front. It’s a pleasure to read it entirely!

My most inspiring quote

“When we say that business and ethics are integrated, we mean that business choices have ethical implications.

[…In other words:] What business choices have not 1) impact how others make sense of our virtues and values; 2) involve social norms, rules, and laws; and 3) generate harm and benefit to different stakeholder groups?”

What wisdom in this book will I use in my daily life?

To make business decisions much more consciously, considering whether they advance only economic values or as well ethical and human values. For that, I will use some of the proposed questions presented by the authors: What is humanity-wise the right thing to do here? Who gets harmed? Who does benefit? What kind of business are we if I decide in this manner? Will we be a business where our children and grandchildren want to work?

Who should read this book?

Every start-up entrepreneur, every manager, every investor…. Actually, everybody who is interested to get a profound overview of today’s new concepts of business as a valuable contributor to societal change and solutions.

Those who have no time to read the whole book might get a good overview in the webinar of Ed Freeman around the ideas of this book, organized and facilitated by the Strategic Management Society.