Marc de Swaan Arons was one of two guests on an episode of Sustainable Futures, Kantar’s sustainability podcast, recorded as a webinar of its Sustainable Transformation practice. Jonathan Hall, managing partner of that practice, hosted; the other guest was Rupen Desai. The question put to the panel was whether marketing can solve the tension between growth and sustainability.
He introduces himself through the work that led to the Institute for Real Growth. A marketing career at Unilever, then his own consultancy focused on global brands, run for fourteen years and then sold, then the Institute, founded with the same partner.
The Institute’s premise is stated at the outset. Companies that outperform their peers do not run by the dictate of shareholder primacy. They drive multi-stakeholder growth, and the Institute’s work is to hold the data that supports that and to help CMOs and other growth leaders make the transition.
Key findings
- The Institute says sustainable growth rather than sustainability, and the choice is deliberate. Sustainability takes most people straight to environmental impact, which is a function of how the word has been used over the past decade. Sustainable growth attaches instead to the seventeen sustainable development goals of the United Nations, on the reasoning that nothing bigger or broader is available to attach to.
- De Swaan Arons does not accept that growth is the problem. He describes a natural urge to grow and says he reads books on degrowth with a natural hesitancy. His answer is to channel growth rather than to stop it, and he says growth and sustainability go together well once growth is defined as growth for all stakeholders.
- Shareholder primacy is treated as recent rather than permanent. Only in the last fifty years, he argues, did companies start to think business was solely about shareholders, and that is worth saying loudly.
- The mechanism he expects to force the change is measurement. A dashboard is being built that captures how much value a company created or destroyed for every stakeholder: the environmental impact, the community impact, the customer impact, and the treatment of employees.
- The regulatory scaffolding was already arriving as he spoke. He notes an announcement from the SEC put out for discussion a few months earlier, with equivalents in the European Union and the United Kingdom. He also expects a measure of how a company treats its people to move from the job review sites into the annual report.
- Once those metrics sit in the same report, he expects the comparison to do the work. Somebody will look at a company growing on one measure and ask about the others, which is where he thinks the innovation comes from.
Constraint as the driver of innovation
The case for systemic change starts, for de Swaan Arons, with a piece of marketing folklore. The winning campaign is always the one made with no budget and no time. Innovation is driven by need or urgency or desperation, never by having too much money and all the time in the world.
The example, two days old at the time of recording, was California’s announcement that gasoline powered vehicles may no longer be sold there after a set date. What interests him is the license to innovate that a deadline like that releases. The talking is over, and other products have to exist to sell.
The stakeholder dashboard is the same mechanism applied to people. He asks whether a company was one where employees went home crying themselves to sleep under pressure, or one that helped people grow and sent them out to do things in their community. His argument is that this will be captured, and that it already costs money when it is not, because rehiring, retraining, and integrating a replacement is expensive and often fails.
What the pandemic left open
De Swaan Arons chose to disagree with Rupen Desai on one point, and said so directly. Desai had made the case that decades of degenerative growth have left humanity in a fragile and unequal state, and that the lesson of past crises is that little is learned from them.
His counter is that the pandemic increased inequality and also increased humanity. Colleagues now know each other’s children, and the cats that walked across the screen. Business meetings are conducted differently from three years ago, and he reads that as an opening to keep the conversation about what matters to people alive.
He puts the same point in terms of who has been persuaded. Even the most cynical finance chief now accepts that a business meeting does not start before everyone has asked after each other’s families. That, in his reading, is a door held open rather than a change already made.
He is also open about which arguments move him. Deadlines and warnings that something must be done by a given date have never motivated him. A dashboard with a number on it that he can make grow does.
Enough growth
Alongside degrowth, de Swaan Arons puts a second idea he wants to learn more about: enough growth. He illustrates it personally. Advisers pressed him and his wife toward a more aggressive strategy for their pension, suggesting the usual six or seven percent might be taken to fifteen. They decided that seven percent was enough, because it beats inflation.
The point is what sits behind the number. Chasing the higher return means somewhere a company is chosen that does things he considers unethical, or that is run for the short term rather than the long. He notes in the same breath that this is a conversation about the subset of people who have pensions at all.
The advantage of being old
Asked whether an established business has a harder job than a company born sustainable, de Swaan Arons argues the opposite. He knows of no company that has lasted more than twenty five years across twenty five countries that was started to make as much money as possible. They were founded and led by someone who wanted to make a difference, and made money by doing it.
The example that stays with him is a piece of paper he saw at Sony, hand signed and preserved. In it the founders wrote that they would prove to the world that Japanese technology could improve lives. He says he still becomes emotional reading it. What happened afterward is the pattern he describes generally. The founder leaves, someone else takes charge, and ten years on everyone believes the company is about making money.
The advantage is therefore a change management one. Tell a young company you are going to do something new and people will wait to see whether it works. Tell an old one you are going back to what it always did and what made it famous, and he says he has never heard employees ask whether they can.
Regeneration is growth in the other pillars
Asked about regeneration and net positive language, de Swaan Arons gives a short answer. Regeneration is growth. The damage was done because growth was created for one target group and not the others, which destroyed one to build the other.
What he claims is possible now is growth across four or five stakeholders at once, nature among them and society another. Creating value for a community, or reforesting, is growth in those other pillars. Hall offers back a balanced stakeholder scorecard as the summary, and he accepts it.
Why the questions belong to marketers
Asked whether marketing has the right to a voice in this conversation, de Swaan Arons disagreed with the question. His answer starts from what a marketer is for. A good marketer feels like the chief executive, thinks like one about where the company will grow, aligns the organization on one version of the truth, and drives an innovation process to deliver it.
He acknowledges the backdrop. The standing discussion has been that marketers are losing relevance and influence, and are not in the boardroom when the company decides where it will play five years out.
Multi-stakeholder growth is what reopens the door. Once a company commits to it, the next questions are who the stakeholders are, what their unmet needs are, and what the company can deliver against them given its competencies. Those questions are generic to a marketer’s skill set. He puts it plainly: if you cannot answer them, do not call yourself a marketer.
The same questions can be asked of stakeholders other than customers. They work as well with the head of human resources about colleagues, or with a corporate responsibility colleague about the community and the environmental organizations the company deals with. What do they think of us, where are the gaps, where are the opportunities, what is growth.
That is the obligation he sets. The marketer becomes a partner to everyone on the executive committee, including the boss, and paints the picture of the growth opportunity. The argument to be made there is that creating value for the other stakeholders will probably drive more growth for the financial ones too.
The marketer five years from now
The closing question was what the role will look like in five years if this works. De Swaan Arons answers with a test rather than a description. You need to have built solid bridges to other disciplines. You need to have helped develop the value proposition for each major stakeholder. If colleagues do not recognize you as a crucial partner on the route to multi-stakeholder growth, you have failed.
The profile the Institute puts against that is the Da Vinci growth CMO. It combines the left and right sides of the head with the heart, which is what Da Vinci combined: he was a scientist, an artist, and one of the founders of the humanist movement. The marketer of five years from now is a polymath on that model, fully integrated into the business and clear on how it generates growth across its stakeholders.
He grounds the optimism in why people take the job at all. Most marketers go to school and then to work wanting to make an impact, and the Institute sees itself as an enabler of that. What it brings together is the data and the best practices, and also the personal leadership part.
Scope and limitations
This is a panel conversation, not a study. Where de Swaan Arons cites evidence he says so, and in one case says openly that he does not have the data points to hand for the claim he is making about employee retention. The claim is offered as something he is looking for rather than something established.
Several of the developments described were unfinished at the time of recording. The stakeholder dashboard is described as being developed as the panel speaks, and the regulatory filing he cites had been announced and put out for discussion rather than adopted.
Source
This page summarises Sustainable Futures: Can marketing lead the way to sustainable growth?, by Marc de Swaan Arons.