Professor Klaus Schwab, Executive Chair of WEF wrote recently about this year’s Davos theme of ‘Shaping new models for structural transformation of the global economy’. We could certainly do with some new models. So what can we learn about these new models from this year’s Edelman Trust Barometer which Richard Edelman will be presenting in Davos this week?
Well trust in governments around the world has plummeted – no surprise there as there is consensus around our political leaders’ ineptitude over the last few years. This puts ever more pressure on companies to lead change. But trust in companies has also fallen to reveal a yawning trust gap. The Barometer also shows that companies cannot expect to build future trust unless they focus very hard on addressing the real needs of people and planet. Sadly the data shows that there is a consensus that currently companies are doing badly at addressing these issues.
Along with falls for government and business, the other headline message from the Barometer this year is that the citizen and society now stand centre stage. Those we trust most are “people like me”, academics and ‘citizen-journalists’ and bloggers.
In this context of falling trust, the Barometer shows that society is calling for much increased regulation to deal with the problems of our current economic system. Paul Polman, CEO of Unilever and co-chair of this year’s World Economic Forum, who is often ahead of the curve in progressive CEO thinking, has echoed this recently saying that “Our version of capitalism has reached its sell by date.”
Polman, has also famously, and controversially, said “I do not work for the shareholder but for the customer” echoing findings from last year’s Barometer which found that 89% of those polled in countries as diverse as the UK and China thought companies should now put the interests of society and ecology above those of shareholders.
Whilst Polman, and a few other leading CEOs like Ian Cheshire of Kingfisher, are leading the way in progressive thinking, this year’s Barometer shows the biggest drop in its history for trust in CEOs.
So what does the Barometer tell us CEOs should focus on at this year’s Davos? Well as the Barometer has shown, and as the 2012 WEF Global risks report maps, we still face the same extreme challenges around resource, ecology, economic and social collapse as last year’s map showed. We have learnt little in the last year and continue to accelerate into a nose-dive. Some radical changes and new models are needed. And one of those new models must be a new form of economics that goes way beyond our current growth-obsessed consumerist-capitalism.
At the heart of this current model is the idea that consumerism, the market and growth are gods. We are the slaves. But as the above evidence shows, people will now only begin to trust once companies put society’s interests at the heart of their vision of what prosperity and progress really mean. This year’s headline report from WEF ‘More with Less: Scaling Sustainable Consumption and Resource Efficiency’, examines ‘sustainable consumption’ but, whilst containing some valuable thinking, does so only through one of the two keys lenses we need to be using for developing a new vision of progress. As I wrote in my recent blog for the Guardian, the UN Brundtland Commission’s definition of Sustainable Development (as opposed to unsustainable growth) is:
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: –the concept of needs; and –the idea of limitations imposed on the environment.”
Brundtland’s twin focus boils down for me to a question of ‘means’ and ‘ends’. The ‘means’ is about how much planet we have left and the ‘ends’ is about understanding real human needs and where we actually want to get on our journey to towards ‘progress’. And yet this recent report by WEF focuses only on the second half of that formula – efficiency of use of limited resources. This is akin to obsessing about how much fuel is in our tank whilst forgetting to ask where we are trying to get to. Such a perspective asks nothing about ‘consumption for what?’ It does not attempt to understand what real wellbeing needs we have and so is missing the opportunity for real breakthrough thinking.
This is a shame as WEF has written thoughtfully on these subjects in the past. Last year they wrote in The Consumption Dilemma that:
“Development – qualitative improvements in people’s lives – is more important than narrow definitions of growth – quantitative increases in the size of an economy or in the scale of its throughputs. Our economic imperative should be to meet needs rather than create wants.”
And in 2010 in Redesigning Business Value they wrote:
“The ‘new normal’ is an economy in which consumers view a product as a means to a solution or enhanced experience rather than a product as an end in itself. We have certainly managed to get across the message that we are no longer selling ‘stuff’; we are enhancing people’s well-being overall.”
That focus on real needs not created consumerist wants and on wellbeing will be the key to breakthrough innovation and thinking which helps to update capitalism and ‘sustainability’.
As Thoreau wrote “A man is rich in proportion to that with which he can do without.” We have to hope that we can meet the real wellbeing-needs of 9 billion people but it’s a fair bet we can’t meet their advertising created potential-wants.