Social Business Conference 2026 - Keynote Speech - Dr. Bruno Roche

[00:00:00] There is a limit to how much you can change the business from the inside. [00:00:04] And maybe I will surprise you, but I don't think the business environment will change. [00:00:10] Dr. Roche is an economist and thought leader best known for pioneering the economics of [00:00:17] mutuality, an approach that rethinks how business create and share value by considering natural, [00:00:24] social, and human capital alongside financial performance. Following a PhD in international [00:00:31] finance and a career as a chief economist at Mars Incorporated, he has spent over a decade [00:00:39] developing and implementing this model worldwide, working with leading institutions, including [00:00:46] the University of Oxford. He is the co-author of Completing Capitalism and [00:00:53] Putting Purpose into Practice and founder of the One Society Foundation. [00:01:00] Please join me in giving a very warm welcome to Dr. Bruno Roche. [00:01:09] Well, it's a great pleasure to be here and thank you very much for your kind invitation. [00:01:14] Actually, I was not supposed to be here because I'm supposed to replace my daughter, who is [00:01:22] who is a specialist in social entrepreneurship and she's teaching social entrepreneurship in [00:01:28] a business school in France. [00:01:29] But I'm also the proud husband of Marianne, who is going to give a speech about Mosaic cuisine. [00:01:36] So it's, you see, it's a kind of a family thing. [00:01:39] But as we were preparing the, this wonderful initiative with Samantha, I was actually in a move that actually Mohammed Yunus was at the foundation of this initiative. [00:01:54] And Mohammed Yunus has a special place in my heart because he's an economist, but he's also an economist who won a Peace Nobel Prize. [00:02:03] He didn't won the economic Nobel Prize, he won the Peace Nobel Prize. [00:02:07] And that's actually an interesting topic. [00:02:08] So economics and peace can be somehow related. [00:02:14] And I had the chance actually of working with Mohammed Yunus about 15 years ago, at a time when we were thinking about the role of government in promoting this kind of initiative. [00:02:31] It was in France at the time under the presidency of Sarkozy and Sarkozy sometimes could have like this kind of strange ideas to actually support this concept of social entrepreneurship. [00:02:42] And we had a chance to work on a specific mission, of course, everything has been forgotten, but at least there is a report in the French government, which talks about the role of social business in the, in creating value for society. [00:02:57] But thank you very much for introducing me as, as, as, as an economist. [00:03:02] And it's true, actually, that's, you know, I have to share a small story with you because when I was in my early 20s, when the Berlin Wall collapsed in 1989, and at the time I had a very strange intuition because I, I said, well, okay, of course, the, now this is the end of, of Marxism and communism. [00:03:25] And, and, and, and of course, it was the good news because it actually released a lot of freedom in Europe, and it was quite amazing to see actually the wall collapsing this way. [00:03:36] And, and personally, I was happy because for the first time we could connect with people behind the wall, but at the same time I said, well, okay, well, you could argue that until the 1989 time, there was some sort of a competition between Marxism on one side and capitalism on the other side. [00:03:51] And there was some sort of a, and there was some sort of a, and there was some sort of a, and there was some sort of a, of a competition between the two, but with Berlin Wall collapsing and the capitalism, Marxism disappearing, there was absolutely no incentives at all for capitalism to behave properly. [00:04:14] And I had a strange idea, actually, to start my PhD on this topic, that to do well, because my intuition was there will be actually no limit for the greed of capitalism. [00:04:27] And actually, you see, you remember the, the movie Wall Street, greed is good, so, so, so, of course, when I shared this, this concept with my supervisor, he thought I was a lunatic, I was crazy. [00:04:37] So, eventually, I ended up doing my PhD on a pretty dysfunctional and useless topic. [00:04:44] It's about, like, option pricing based on, on intraday data. [00:04:52] So, very complex topic, spent many years studying a topic which is actually completely useless, and even worse than useless, because actually, it's all about making money, with money that doesn't exist, for people who have a lot of money. [00:05:07] So, you can't, you can't be less social than option pricing. [00:05:11] It's a miracle I didn't end up in a, in, in a bank, or in a hedge fund. [00:05:16] But eventually, I, I joined Mars, the, the company that actually is a big competitor to Nestle. [00:05:22] I mean, a company that is actually pretty known in this country. [00:05:25] And I didn't join the company because it was, because I don't very much like the product. [00:05:29] But I was, I was interested because it was, it was a company based on family values, and there was some sort of strange about this company. [00:05:36] So, I joined this company, and, and I became, yes, after a few years, the chief economist, which eventually is, I was in charge of guiding the strategy long-term for the company. [00:05:45] And, but I, when I, when I, when I joined, I, just after a few weeks, I was appointed chief economist. [00:05:51] I had a, a very unusual conversation with the chairman of the board and the CEO. [00:05:56] And by chance, the CEO was an historian. [00:05:58] He was not trained as an MBA, whatever. [00:06:01] He had understanding, actually, of the long-term perspective of value creation. [00:06:04] And they asked me a very unusual question. [00:06:07] They asked me, what should be the right level of profit? [00:06:10] What should be the right level of profit? [00:06:16] And actually, I thought it was a trap. [00:06:18] I thought it was like a way to just to, to, to trap me, to set me up. [00:06:22] And I said, well, why are you asking me this question? [00:06:26] Just to ensure that we were not. [00:06:28] And actually, the response was extremely logic. [00:06:31] And I said, well, you see, well, if you compare, if you assume that the business is like a, is like a chain, a value chain. [00:06:39] Every chain is as solid as a weakest link. [00:06:43] So if the link somewhere breaks below or before or after, actually the whole ecosystem can be disrupted. [00:06:54] So I said, of course, as a business, I need to make money. [00:06:57] I need to make profit because I need to remunerate my shareholders. [00:06:59] I need to, to reinvest. [00:07:01] I need also to, to, to compete with my company, with the competitors. [00:07:07] But I don't want to take too much. [00:07:09] Because if I take too much, I may actually squeeze and take advantage of my size to squeeze my supplier, to squeeze. [00:07:17] And therefore, it was a real, a very, a real business question. [00:07:20] So what should be the right of love profit to maximize performance? [00:07:24] So it was not driven by moral or ethical or, or, or guilt. [00:07:32] It was like a real. [00:07:33] So it surprised me because usually this kind of question would come from an NGO or from trade unions or from government, not from a shareholder. [00:07:39] Okay. [00:07:40] So I, I took this question and I asked for a few weeks because I said, of course, it is a business question. [00:07:48] It is a very valid question, but it's also a kind of a moral question at the same time. [00:07:52] Okay. [00:07:53] Because what type of principle are you going to mobilize to justify how much profit you make? [00:07:59] Right. [00:08:00] And so to my surprise, to my surprise, maybe it works this way. [00:08:05] Yeah, very good. [00:08:06] Okay. [00:08:07] To my surprise, actually, it's not a new idea. [00:08:10] I mean, it's been, it's been the, in the air for a long, long time. [00:08:13] And here, it's, it's, it's, it's, I took here, like a quote from the book of the Proverbs in the Bible. [00:08:20] It said, "A man may give freely, and still his wealth will be increased, and another may keep more than is right." [00:08:25] Again, more than is right, but only comes to be need. [00:08:28] So it's not new as that. [00:08:29] Three thousand years ago, humankind was always struggling with this kind of thinking. [00:08:34] If we go a bit further west, I mean, if you look at the teaching of Confucius in China, that the superior man is concerned with virtue. [00:08:41] The inferior man is concerned with profit. [00:08:44] Okay. [00:08:45] So it's not new, but a complete blind spot in the management literature, still today. [00:08:56] The only response we have is this one. [00:09:01] And if you look closely at the words here, the sole social responsibility of business is to use resources, engage activities designed to increase profit for shareholders. [00:09:16] So here, Milton Friedman is equating social responsibility with maximizing profit. [00:09:23] So it's a very socially responsible definition for shareholders, not for the others. [00:09:29] Okay. [00:09:30] And ever since, every single business school in the world is teaching this. [00:09:39] Still today. [00:09:40] And a statistic which actually makes me so unhappy is that these days you have one third of all the graduate students worldwide, which graduate with a management diploma. [00:09:54] One third, 70 million every year. [00:09:57] We don't need as many business people. [00:09:59] Come on. [00:10:00] We need more artists, engineers, scientists, whatever. [00:10:03] We don't need more business people. [00:10:05] But still, you see, in the mind of many people in the world, business management is the superior discipline to have a successful life. [00:10:15] And the second tragedy is that we are still teaching these kids the model of yesterday. [00:10:24] Okay. [00:10:25] That makes me really unhappy. [00:10:28] So now if you go back a little bit to the meaning of economics. [00:10:31] Economics is actually a definition. [00:10:32] It's a social science. [00:10:34] It's a convention. [00:10:37] And in our world, in the Western world, economics come from two words, oikos, nomos in Greek. [00:10:45] Oikos is the house. [00:10:46] Nomos is the rule. [00:10:47] So it means actually the management of the household. [00:10:50] That's actually how you define economics, which eventually leads to the concept of the management of scarcities. [00:10:56] The management of limited resources. [00:10:59] So if you are in this kind of mindset, if economics is about managing scarcities, it all leads to what? [00:11:08] The fear of lack. [00:11:10] Fear of lack leads to competition. [00:11:14] Competition often leads to extraction or extortion, which is a form of self-destruction. [00:11:25] But if you, I mean, I just take your two other definitions. [00:11:29] What is in Hebrew? [00:11:30] Hebrew is calcala, which actually means the reception of abundance. [00:11:38] So that's what I teach to my students. [00:11:40] I say, are you in the management of scarcities or are you in the reception of abundance? [00:11:45] If you are in the management of scarcities, every single transaction is based on buying and selling, right? [00:11:52] If you are in the paradigm of abundance, economics is about giving and receiving. [00:12:01] And here we are touching actually the nexus of social business. [00:12:06] Are you in the buying and selling or are you in the giving and receiving? [00:12:11] And we are somewhere in the middle. [00:12:13] And you also, in Chinese, it's also a very interesting definition. [00:12:17] I move quickly. [00:12:19] But you see, this model of profit max worked very, very well. [00:12:24] The problem, I mean, here I give actually the, I look at the GDP of the last 2,000 years. [00:12:30] You see how it exploded since the 70s? [00:12:33] I mean, the, it create immense amounts of wealth. [00:12:36] The problem is actually, it's, it's, it's, it's created amounts of wealth, but for, for a few. [00:12:42] And here I just show, I did a bit of a study of about 3,000 companies over a period of 50 or 40 years. [00:12:48] And I look at actually the top line and the bottom line. [00:12:51] The top line is actually how your, your revenue is moving up and down. [00:12:56] And the bottom line is actually how much profit you make. [00:12:59] And here it shows actually that the bottom, top line can actually go up and down, but the profitability goes up. [00:13:05] So you could argue it's actually an outcome of improvement in efficiency, whatever. [00:13:12] But it is also an outcome of a philosophy. [00:13:15] If you teach managers to extract value, they will extract value. [00:13:21] I mean, management is agnostic discipline. [00:13:25] If you ask management to increase profit, they will increase profit. [00:13:28] If you ask management to create jobs, they will create jobs. [00:13:31] If you ask management to be innovative, they will be innovative. [00:13:34] So this is actually a very interesting graph, which actually that whatever the circumstances, [00:13:38] and even there is a 2008 period here, right? [00:13:41] So even during the 2008 period, the profit increased. [00:13:45] The top line went down, profit increased. [00:13:47] So it corresponds to an ideology, a philosophy, okay? [00:13:51] Now the real question is that, is this ideology, is this philosophy a natural law? [00:13:57] If it is a natural law? [00:13:58] If it is a natural law, it will continue, right? [00:14:00] If it is an ideology, it will collapse. [00:14:03] And in my view, that's the same way you see the Marxism collapse on the Berlin Wall. [00:14:10] Neoliberalism, financial capitalism will collapse, maybe on a different kind of wall, maybe the wall of Wall Street. [00:14:20] See? [00:14:21] From the Berlin Wall to Wall Street, there will be actually a collapse of the wall. [00:14:25] If we go forward with terrorism, if we go like some statistics. [00:14:29] In 2016, the top 100 economies, only 31 were countries, and 69 were corporations. [00:14:37] So today's corporations have the size and power of nation states, without having the democratic legitimacy. [00:14:47] 20 years later, 10 years later, same discipline, same thing. [00:14:51] You see, I compare here countries versus corporations. [00:14:56] But it took place at, here I show actually how capital has been remunerated versus labor. [00:15:09] And I compare three types of labor, the increased, like the high education labor, and low and middle education labor. [00:15:17] So here you could see actually that it's better to be born rich than to be born smart. [00:15:22] I mean, if you are endowed with a bit of money, you will be much better off than if you are endowed with talent. [00:15:28] So our system actually has developed a concept by which, whereby, there is more being, there is a higher level of remuneration to financial capital ownership than to any other form of talent. [00:15:42] So socially, it's a bit dangerous. [00:15:44] Because you would argue that actually it's better to allocate resources to the talented people. [00:15:52] Because being rich doesn't mean you are smart. [00:15:55] Being educated doesn't mean you are competent. [00:15:59] And I had an uncle, actually, who was the head of the National Institute of Demography in France. [00:16:09] And he had this quote, actually, that is the same proportion of idiots. [00:16:12] "In every population, whatever the principle of selection." [00:16:17] And I can tell you, I mean, I hired hundreds of people in my life. [00:16:21] I can tell you, the same proportion of idiots people graduated from Harvard than from people on the street. [00:16:26] Same proportion of idiots. [00:16:27] Okay. [00:16:28] Which is a little bit annoying, right? [00:16:30] And Molière said, actually, I show you an educated fool is even more foolish than an educated one. [00:16:38] So what happens when you have a bench of smarts, when you have a bench of smarts poor, [00:16:46] you actually meet with a bench of idiots rich, you have a revolution. [00:16:51] Okay. [00:16:52] Because being poor and uneducated doesn't mean you're stupid. [00:16:57] Being rich and educated doesn't mean you're smart. [00:17:00] It's actually more like a kind of an outcome of society. [00:17:03] Same thing happens to the planet. [00:17:05] I mean, today, I just picked yesterday the overshoot day. [00:17:09] You probably know the statistics, actually. [00:17:11] The time, the day when the humanity demand for the resources coming from the Earth and services [00:17:18] in a given year exceeds what the Earth can provide. [00:17:21] So even if you apply the concept of our own definition of economy, which is actually management of scarcity, [00:17:28] you don't need to have a PhD in economics to understand that a system that creates so much polarization, [00:17:33] so much problem, and so much also degradation development cannot sustain. [00:17:38] And the consequences is the following. [00:17:41] The first one is that there is a kind of a businessification of all sphere of societies. [00:17:46] Not only management but also education, health, culture, even religion has become a business. [00:17:56] Okay. [00:17:57] Second one is that we are dealing with new form of scarcity. [00:18:00] I mean, 50 years ago, financial capital was scarce. [00:18:03] But natural resources were overly abundant. [00:18:06] Okay. [00:18:07] So you could argue that at that time, inventing financial capitalism was not a bad idea. [00:18:12] But today, we have a complete reversal of these kind of scarcities. [00:18:18] We have a shortage of natural resources. [00:18:20] We have an overabundance of financial capital. [00:18:22] I mean, we live in Switzerland, right? [00:18:24] The interest rate these days is 0% at the bank. [00:18:27] And a few years ago, it was even negative. [00:18:29] And for me, frankly speaking, I know you're a physicist, but for me, I mean, [00:18:34] the fact that you have negative interest rate is as if you said that the law of gravity doesn't work. [00:18:38] I mean, it's just impossible. [00:18:39] It's impossible. [00:18:40] Okay. [00:18:41] Imagine I drop this device and instead of going down, it goes up. [00:18:44] So, but we even managed to create this kind of craziness, right? [00:18:50] And then the outcome of this is also that because the middle class has been vanishing [00:18:57] with a huge polarization in the center, the corresponding impact in society is what? [00:19:04] Is the vanishing of the center, center right and center left, [00:19:09] which actually now is creating a lot of space to the extremists, right or left. [00:19:16] So, it's not just about business. [00:19:18] You see what I mean? [00:19:19] It's not just about like a nice, no. [00:19:21] It has very concrete impact on how we are even organized as a society. [00:19:28] So, is there a future to capitalism? [00:19:33] Yeah. [00:19:34] But not in the current form. [00:19:36] And you mentioned actually that I wrote this book about 10 years ago, Completing Capitalism. [00:19:41] And actually, I had a lot of discussion with my editor at the time because he was, [00:19:46] because you see, when you talk about capitalism, especially in the US context, you will be careful, [00:19:50] especially when you speak English with a French accent. [00:19:52] It's a bit, it's a little bit dangerous. [00:19:55] But eventually, we came up with this concept of completing capitalism, which actually in French works very, very well. [00:20:02] I mean, it's like on a shape of the capitalism. [00:20:05] So, it means like it has a double, a double, a double understanding. [00:20:08] It means actually improving, but also finishing off, right. [00:20:12] It's, it's, it's, yeah. [00:20:14] So, okay. [00:20:15] I mean, I can change it's kind of, of, of, of anecdotes. [00:20:18] So, it's like, you see, he understood this way, understood this way, right. [00:20:22] It's, this form of capitalism, in my view, is so destructive. [00:20:25] It needs to be removed. [00:20:27] So, eventually, so I'm going back. [00:20:31] So, when I had this conversation with my, with my, with, with my board, [00:20:36] and I said, well, if you want to define the right level of profit, [00:20:40] you need to actually ask different questions. [00:20:42] It's not just about magic number, because I could have, I could have said, okay, well, okay. [00:20:48] I go to my friends at McKinsey and, and Basigi, and I say, okay. [00:20:52] Unilever is here, Danone is here, Nestle is here. [00:20:57] The right level of profit is probably between these two. [00:21:00] Okay, no. [00:21:01] I said, if you really want to understand what is the right level of profit, [00:21:04] we understand actually how you, what is the meaning of value creation? [00:21:09] What is the meaning of, of, of, of business? [00:21:12] And I shared with, with, with Lucas, right. [00:21:15] I shared a, like a small anecdote that, you see, when you talked about business, [00:21:21] you have different words. [00:21:22] You have business, you have enterprise, you have corporation, you have company. [00:21:28] Okay. [00:21:29] And 20, 20, 20, 20, 30 years ago, the, the most frequent words in the literature was company. [00:21:36] You talk about company. [00:21:37] You talk about company. [00:21:38] Okay. [00:21:39] Nowadays, you talk about business. [00:21:41] You talk business school, business venture, business plan. [00:21:47] You don't talk about company school or company plan, I don't know. [00:21:50] And actually, it's very interesting because, you know, company, you guys, we are in the Italian [00:21:55] part of Switzerland. [00:21:56] Company come from two words in Latin. [00:21:58] Company come panes, which literally means the sharing of the bread. [00:22:05] It means communion. [00:22:06] It means fellowship. [00:22:07] It means sharing. [00:22:08] And not any kind of sharing. [00:22:10] It's actually what Jesus did at the very, at the last supper. [00:22:13] He was breaking the bread and share it with disciples. [00:22:17] Business is actually coming from the old word in English, busyness, which literally means anxiety. [00:22:25] So we moved in 20 years from a place of sharing to a place of anxiety. [00:22:33] Okay. [00:22:34] So that's why I don't very much like the concept of social business. [00:22:36] I think we should talk about company or enterprise. [00:22:39] And we should call the anti-social business. [00:22:42] Words, words matter. [00:22:46] So I had actually 20, I had a chance actually of doing this work almost for 15 years, actually. [00:22:56] With, I mean, I was fired twice. [00:22:59] I was rehired twice. [00:23:01] And eventually I decided to fire them. [00:23:04] It was, to me, it was fair. [00:23:07] Okay. [00:23:08] But it's not an easy, it's not an easy fight to get into this kind of thinking. [00:23:12] But by the grace of God, I managed to not only develop completely new management theory with Oxford [00:23:19] and with a number of institutions like Paris School of Economics and Wharton. [00:23:23] So I had like the chance to develop like a very solid piece of academic, but also the chance to test it in the Mars ecosystem. [00:23:31] And during the break, I will share with you some examples about how it's going. [00:23:35] So we managed to demonstrate actually that the business, which is not based on transactional relationship, [00:23:41] based on maximizing profits, based actually on extorting the ecosystem in which you operate, [00:23:47] is actually going to reach only a certain level of performance. [00:23:50] But if you relax these constraints, you can actually achieve a higher level of performance. [00:23:55] So to my surprise actually that we are, we have now the chance of having a methodology actually, [00:24:01] is showing that it's possible to outperform, even financially, if you apply a different type of thinking. [00:24:11] We had a discussion also with Lucas, actually. [00:24:13] It's a bit similar to slavery, you see. [00:24:15] Slavery was an excellent model for value creation. [00:24:19] Forget about the moral values. [00:24:21] If you have slavery, you can create an empire with slavery. [00:24:24] When the slavery was removed legally, it created a completely new period. [00:24:30] Of value creation. [00:24:32] And we are, in my view, at this level of dysfunction. [00:24:38] Many, to some extent, we're taking advantage of slavery. [00:24:43] We take advantage of slavery of human beings, of society, but also of the environment. [00:24:49] So I wrote this book, actually I wrote a book with Oxford University Press. [00:24:53] So you can actually, the book actually is free online and you can read it. [00:24:58] So we had a chance to develop the entire methodology, but also with some case studies. [00:25:02] And of course I used Mars case studies, but also many others. [00:25:06] But the whole idea is that we need to shift, we are shifting actually capitalism from financial capitalism, which is based on the creation of financial capital for the company and the shareholders, where the relationship is based on power. [00:25:24] So you are using the size of your company to extract value, to a model which actually is more like what we call mutual capitalism, which eventually is based on purpose. [00:25:34] And where you actually have to manage not only one form of capital, but different form of capital. [00:25:40] And I'll come to that in a minute. [00:25:41] How are we doing with time? [00:25:42] We're good? [00:25:43] Okay. [00:25:44] So essentially there are four pillars in this concept of mutual economy. [00:25:48] The first one is to use purpose as strategy, not as a communication device. [00:25:53] It's not about bragging. [00:25:54] It's not about saying how good you are. [00:25:58] It's actually about solving a problem in the ecosystem in which you operate profitably. [00:26:04] The second one is that you need to move from a concept of linear value creation to a concept of ecosystem-based value creation. [00:26:12] It's a bit more complex, but it's also a source of value creation. [00:26:16] The third one is that actually you have to also measure performance, not only with financial capital, still an important component, but also other form of capital. [00:26:24] And the last one is actually to propose a redefinition of profit. [00:26:29] So the first one is that purpose. [00:26:32] So this is the definition we came up with my colleagues in Oxford. [00:26:36] So the purpose of business is no longer about maximizing profit. [00:26:39] So we take exactly the opposite definition of what Milton Friedman did in the 70s. [00:26:44] The purpose of business is to create profitable solutions to the problems of society and the environment, not profiting from creating problems. [00:26:57] This last sentence is super important. [00:26:59] Many companies profit by creating problems. [00:27:02] Very few companies profit by creating solutions. [00:27:05] So here I'm not challenging the notion of profit. [00:27:08] I think profit is important. [00:27:09] I mean, a business needs profit. [00:27:11] You need to make money. [00:27:12] It's impossible otherwise. [00:27:13] Okay. [00:27:14] But what is how you make profit? [00:27:16] So when I work with my clients, when I work with them, I say, well, how do you define your purpose? [00:27:22] How do you define your activities? [00:27:24] Are you profiting from creating problems or from creating solutions? [00:27:29] Number one. [00:27:30] Okay. [00:27:31] Number two is about to say, well, many companies work this way. [00:27:35] So you are the companies in the middle of the value chain. [00:27:39] It's all about paying the shareholders, the debt holders, the government, and finally the employees. [00:27:46] That's the traditional way of creating value. [00:27:49] A bit more sophisticated is what you have with the corporate social responsibility, with the ESG framework. [00:27:56] It's all about considering that the company is still at the center of its ecosystem. [00:28:02] But you start considering the planet, the competitors, the society at large. [00:28:10] So it's a bit more encompassing. [00:28:12] What you are proposing is just the opposite. [00:28:14] We say we want to apply this kind of a Copernican revolution. [00:28:18] You know when Copernican wanted to understand the movement, the trajectory of the stars, [00:28:25] as long as he was assuming that the Earth was at the center of the solar system, he couldn't find the equation. [00:28:33] When he transformed the proposal, it was actually much easier to develop stable equations. [00:28:42] And here it is the same thing. [00:28:43] So when you start developing, you say, well, it should be the purpose which is the center of your ecosystem, [00:28:48] not your company. [00:28:50] And this is the most difficult thing I have to do with my clients. [00:28:55] Because it's like Le Roi Soleil, you see, the king with the 14, they want to be at the center of everything. [00:29:00] No, no, no. [00:29:01] And that's actually where you, that's the number one strategy to say, no, no. [00:29:05] You're just one stakeholders out of many in the ecosystem in which you operate. [00:29:12] And therefore, you need to develop different types of relationships with the different players in your ecosystem. [00:29:20] You cannot just apply financial capital, transaction, contract. [00:29:24] You need to apply influence, conviction, purpose. [00:29:29] See, that's the most difficult muscle because we are so wired to do this this way that just to take a step back. [00:29:37] Okay, are you with me? [00:29:39] The third one is that actually, once you have this, this is the first step is to develop this kind of, [00:29:47] when you do the ecosystem of your business, you will discover very interesting problems. [00:29:57] I'll give you one example. [00:29:58] When I was doing this kind of work for Mars, Mars has a big pet food business. [00:30:04] It's a $30 billion business, not small. [00:30:08] But they were very much in the pet food, like making croquettes, making for cats and dogs. [00:30:14] And when we applied this kind of thinking, they said, okay, let's do an ecosystem of pets, of cats and dogs. [00:30:20] And we discovered actually that in that ecosystem, there was a big pain point, a huge pain point. [00:30:26] It was the rate of suicide of veterinarians, the highest rate ever. [00:30:34] People were burned out, they were unhappy, they were stressed, and they killed themselves with a very high rate. [00:30:40] So I remember I had this conversation with leadership, I said, so what should we do with it? [00:30:44] Well, some people say, yeah, we are in the business of making croquettes. [00:30:49] Okay, it's not our responsibility. [00:30:52] Some others say, we have responsibility, right? [00:30:56] And mano and mano, you see like step by step, they discovered that actually it's possible to solve this problem, this human capital problem, the well-being and the rate of suicide of veterinarians. [00:31:12] And this actually was, gave the, an innovation, a business innovation to move from the pet food business to the pet health business. [00:31:25] And Mars created a veterinarian business, which actually today is a $15 billion business, growing double digit, more profitable. [00:31:38] And actually, one of the key KPIs is a well-being of veterinarians. [00:31:42] So it's a bit outside actually the traditional, you see, CSR. [00:31:47] It's a good example. [00:31:48] Another example is Novo Nordisk. [00:31:51] Novo Nordisk, the company that actually is in the business of manufacturing and selling insulin for the treatment of diabetes. [00:31:58] We've done a lot of work with them and they say, well, okay, what is your purpose? [00:32:02] And they say, well, our purpose is to treat diabetes through insulin. [00:32:10] So we did an ecosystem mapping of all the stakeholders related material to the treatment of diabetes. [00:32:19] And eventually, through this journey, they say, well, okay, maybe we should actually change our purpose. [00:32:25] It's not about selling more insulin to treat diabetes because eventually the access to insulin is very small, it's very limited. [00:32:32] Maybe we are in the business of eradicating diabetes. [00:32:37] And it was a very interesting case study because it shows a purpose which eventually meant the end of their business of today. [00:32:46] And eventually, if they are succeeding in eradicating diabetes, there is no more business for insulin. [00:32:51] It was a very interesting case study you can find in my book, very interesting. [00:32:54] Eventually, that business, which is called City is Changing Diabetes, was the most performing business financially. [00:33:01] See, so it's not necessary. [00:33:03] So if you put purpose first, and you are disciplined actually in finding business solutions, and there is not always business solutions to problems, but many of them are. [00:33:13] And the beauty of a business, that's actually what Mohammed was sharing with me, he said, you see, a charity dollar only has one life. [00:33:22] A business dollar has multiple lives. [00:33:25] So when you manage to bring these two components together, you're not only kind of, you're creating something which actually can perpetuate. [00:33:34] So of course, in order to make this kind of business, you need, of course, to measure performance with different types of KPI. [00:33:43] Of course, financial capital is one, but we also developed over the years the concept of human capital. [00:33:48] Essentially, the quality of the person in terms of knowledge, in terms of well-being, in terms of prospects for probability, in terms of skills. [00:33:56] So there is an element of investment that a company can make in order to grow the human capital, not only among the employees, but also in the ecosystem. [00:34:04] Something which is very often forgotten is social capital. [00:34:07] So the quality of relationship that exists within an ecosystem. [00:34:12] Trust, social cohesion, the capacity for collective action. [00:34:16] And these actually are important topics, which actually the number one reason why business fail or succeed is social capital. [00:34:25] And it's possible through policy making, through set up of certain principles to grow the social capital. [00:34:34] And of course, natural capital. [00:34:36] And the beauty of the human and social capital is actually this capital, it's called in economics, non-rival good. [00:34:42] The more you share them, the more they gain value. [00:34:46] And we go back to the definition of economics as being receiving abundance. [00:34:52] If you share your relationship, Samantha, with someone else, you don't lose anything, but you grow your social capital of someone else. [00:35:02] So there is an element actually that's the number one reason why business succeed and fail, and even at the nation level, is the quality of social capital. [00:35:11] Why Switzerland is it so rich? [00:35:13] Not because Switzerland is rich. [00:35:15] Actually, Switzerland should be the poorest country of the world. [00:35:18] It has. [00:35:19] Only 30% of the land is arable. [00:35:22] It has two religions, four languages. [00:35:26] Come on. [00:35:27] I mean, if you come from another planet and you find this country, there is no way they can actually be rich. [00:35:33] One of the reasons why Switzerland is rich, in my view, is because of the quality of the institutions. [00:35:40] So it's actually a form of social capital. [00:35:43] Are you with me? [00:35:44] So essentially, that's how you define the concept of true profit. [00:35:50] Because if you have your financial profit, which actually we keep in our definition, we keep the financial profit. [00:35:57] But we say, okay, now we need to create, we need to take into account how much money we spend to create social capital, to create human capital, to regenerate the natural capital we have wasted. [00:36:17] And eventually, you end up with, you see, we end up with a concept of a true profit versus the financial profit. [00:36:24] In relationship with your purpose. [00:36:27] And if the true profit is above the financial profit, that means your company is net positive. [00:36:34] It takes more. [00:36:36] If it's below, it is a predatory company. [00:36:40] It takes more than it should. [00:36:43] And eventually, you see this gap, this delta between true profit and financial profit is one metric, only one, which actually helps incentivize the different players around the ecosystem. [00:36:56] Incentivize management, incentivize employees, incentivize investors. [00:37:00] And I have dozens of examples which actually show that it's actually a superior way of creating value. [00:37:06] So now, my great, that's why actually I quit Mars and I developed this foundation because I, first of all, I think, I mean, it's, there is a limit to how much you can change the business from the inside. [00:37:23] And I, maybe I will, I will surprise you, but I don't think the business environment will change. [00:37:28] They have no incentive to change because the system has been designed by them, for them, and it works very well for them. [00:37:34] And even the few, and it doesn't mean actually the people who are in charge of this business are bad people, but it means actually that the people who are, who are trying to change the system from the inside, that are being kicked out. [00:37:47] I mean, I, in my board, I have people like Paul Polman, you heard about him. [00:37:52] He was the CEO of a new lever. [00:37:53] He tried to set it up. [00:37:54] He actually was a pretty successful businessman, right? [00:37:57] He was fired. [00:37:58] Okay. [00:37:59] Another example was Emmanuel Faber, the head of Danone, who actually worked pretty closely with Mohamed Yunus. [00:38:05] Same thing. [00:38:06] And to some extent, my story is very similar. [00:38:09] So I came to the realization that only a systemic approach would eventually trigger a system change. [00:38:14] And there are actually two elements. [00:38:16] There is, I still work with some companies, and I have a partnership with the Boston Consulting Group, which actually is an important element. [00:38:25] But I'm using them at the moment in order to create more case studies. [00:38:29] But there are two elements that I'd like to leave with you with a proposal. [00:38:32] One is actually education. [00:38:34] Remember, actually 70 million kids are being trained the wrong way. [00:38:40] So it's super important to start creating a new management theory, but also to create a number of case studies to show how this can work. [00:38:49] So that's personally what I've set up my foundation. [00:38:53] And I work with Oxford. [00:38:54] I work with Wharton. [00:38:55] I work at the moment with Ivy League, if you like, Ivy League concept. [00:39:00] And hoping actually that it will trickle down, like a little bit, but not in economics, but in education. [00:39:05] But most importantly, I think, and that's why I'd like to leave with you with a call for action. [00:39:09] I think there is an important element for the public sector, for government, for people actually. [00:39:15] You mentioned that there is no legal status yet in Switzerland. [00:39:20] So I'm not Swiss yet. [00:39:23] I have two more years or three more years to be Swiss. [00:39:26] But I'd like to call for action. [00:39:28] It would be possible. [00:39:30] How many of you are Swiss here? [00:39:32] Because you need to be a Swiss citizen. [00:39:34] Great. [00:39:35] So I have actually a challenge for you guys. [00:39:39] I mean, Switzerland is a beautiful country because you can actually organize your referendum. [00:39:44] You can't do that at the EU level. [00:39:46] You can't do that in France. [00:39:47] You can't do that in France. [00:39:48] I mean, they've been working at the EU level for many years. [00:39:51] And maybe at some stage it will eventually happen. [00:39:56] But Switzerland has a chance of, I mean, if enough of you are willing to write a document [00:40:04] to get enough people to create a very special status for, I mean, I call it this way, [00:40:11] a Swiss mutuality-driven company. [00:40:13] You can do it differently, right? [00:40:14] But you see, you could argue that you can create a very special status for companies that [00:40:22] which actually would be, have a very special also tax status. [00:40:27] So the company would pay less taxes. [00:40:29] The employees working with them would be, would have tax benefits. [00:40:35] Their clients would be pay less VAT. [00:40:39] Their suppliers would also get a specific treatment. [00:40:43] The investors investing in them would actually get tax. [00:40:47] So it would be possible to create an environment which actually would put this social business [00:40:53] at the same level of competitiveness than the other business. [00:40:57] Because I can see my wife, Marianne, she's running with, she's running this mosaic business cuisine. [00:41:01] It's terrible because, A, she employs, she employs people who are a bit broken by life [00:41:07] because they are refugees. [00:41:08] So they don't have the same productivity than the others. [00:41:11] On top of that, they have to train, you have to train them. [00:41:14] So there is a hidden cost in running a social business. [00:41:18] But she's competing with profit max businesses. [00:41:23] So there is a disadvantage, you see, there is a real disadvantage. [00:41:28] So you can't ask a social business to play with the same role as a profit max business. [00:41:34] And yet they do. [00:41:36] And so my provocation to you guys, I can't do it, I can help, but I'm not Swiss, I can do that. [00:41:41] I have a proposal for you. [00:41:43] Just think about creating a specific status for the social business [00:41:50] so that they can start competing at the same level as a profit max business. [00:41:55] That could actually serve as an example, as a pilot for the rest of the world. [00:42:03] Thank you. [00:42:05] Thank you.