“Making profits is not a purpose of business. It’s a derivative.”
Good morning.
Regular readers of this newsletter have by now heard of Fortune Connect, our new community of next generation leaders. Launched last October, it is Fortune’s pandemic project—a virtual platform where executives can share ideas around purpose, stakeholder capitalism and inclusive leadership. The Connect Fellows meet weekly, and yesterday’s guest was Colin Mayer, the Oxford professor who wrote the most compelling book on the future of business that I’ve read, called Prosperity. Some of his comments:
On profits:
“Profit of the company can be earned in one of two ways. It can be earned through creating benefits for us as customers and societies in the natural world, or it can be done through wealth transfer, at the expense of others. Environmental degradation, for instance, is profiting at the expense of others and not accounting for the true costs of cleaning up the mess.”
On purpose:
“Making profits is not a purpose of business. It’s a derivative. A purpose is what problems it is solving for us as customers and communities.”
On new metrics for business:
“Increasingly we’re getting standard setters recognizing that we have to include metrics against which companies can measure their contribution to environmental and social standards. It is beginning to happen. But we’ve got a long way to go.”
On what Fortune Connect fellows should do at their own companies:
“Point number one is, you should emphasize the importance of defining that purpose and really recognizing what problems your business is well suited to addressing. The second part is to… ensure that that notion of a purpose is something that’s reflected in the way in which the strategy is formulated and the strategy is implemented…And the third component is to get people in the organization to really buy into the purpose.”
Mayer’s comments built on a conversation the Fellows had last week with Dov Seidman, the founder of the compliance firm LRN and chairman of the How Institute for Society. Seidman talked about how the pandemic has intensified companies’ focus on the needs of stakeholders other than shareholders:
“Political, social, environmental, biological, human, ethical and moral issues that were once considered tangential to the business agenda are now everyday considered inescapably at the center of the business agenda. I think it’s fair to say that the pandemic has only accelerated the fusion of all the things that we kept apart from business in our personal lives. Everything has come together.”
Companies participating in the Connect program include Workday, Accenture, Salesforce, PayPal, RBC, Genpact, IBM, Enel, Chobani, JP Morgan, GM, Edward Jones, 2U, Citrix, Raytheon Technologies, FedEx, Xerox and No 7. If you are interested in joining that group, shoot me a note, or go here, and help shape the future of business.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Boeing fix
The FAA has approved a Boeing electrical fix that has kept a quarter of its 737 MAX planes grounded since April; the approval means the planes may now be in the air within days. The electrical issue was discovered just months after the end of a two-year grounding of the jets. WSJ
Gaza Violence
The rising conflict in Israel and the Gaza Strip reached a deadly new stage, as violence broke out between civilians on the streets of Israeli cities. Mobs attacked people, cars, and shops, and at least three people have been nearly beaten to death by large groups. More than 67 Palestinians, including 16 children, have been killed, and at least seven Israelis, including one child. NYT
WHO report
The catastrophe of the pandemic could have been averted, according to a new WHO report. The report criticized the Chinese government, and the WHO itself—but reserved particularly strong words for the wealthy western countries for "wasting February 2020" with inaction. FT
Mixing doses
Is it safe to take a mix-and-match approach to your vaccine doses? A new study from the University of Oxford which looked at mixing the Pfizer and AstraZeneca jabs, found that mixing tended to produce more unpleasant, flu-like side effects after the second dose, but didn't see cases where mixing proved more dangerous, as Fortune's Jeremy Kahn writes. Fortune
Digital transformation and the future of strategy In thriving amid disruption, digital enterprises may have an edge over less digitally mature competitors. Explore insights on how digital capabilities can enhance resilience and help organizations capitalize on changing market dynamics and customer behavior. Read more
Bitcoin Bust
Elon Musk has done a 180 on Bitcoin—Tesla will stop accepting Bitcoin as the mining process relies heavily on fossil fuels, particularly coal. Bitcoin plunged as a result. Of course, Bitcoin's enormous environmental footprint was already well known and widely reported on, including by Fortune, long before Tesla's embrace. Fortune
Shiba Inu coin
But if that's not enough crypto-drama for you, turn to Dogecoin—and then turn to Shiba Inu coin, a joke on a joke. A single SHIB coin is, well, essentially worthless—but that didn't stop one of the co-creators of Ethereum from giving "$1 billion" in SHIB to an Indian COVID-19 relief fund. Fortune's Grady McGregor and Yvonne Lau take you through the hype. Fortune
Facebook crypto
But wait, there's more—a Facebook-backed digital currency project will shift operations from Switzerland to the U.S. later this year. The project, called Diem, and backed by 25 companies, said it had entered a partnership in order to launch a "stablecoin," backed by the U.S. dollar. Fortune
Palm oil
Meanwhile, another market is rising: prices are spiking for palm oil, the ubiquitous ingredient in everything from toothpaste to lipstick to biofuel. Prices broke a fresh record on Wednesday and have climbed 120% over the last year, part of a global commodities rally fueled by a Chinese buying spree and weather worries. Fortune
This edition of CEO Daily was edited by Katherine Dunn.
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