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Marc Stoiber

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Could Well-Being Become Our New Currency?

Posted: 06/13/11 01:53 PM ET

Capitalism was founded on a simple principle: I create a product or service that provides you with a benefit, and you pay me. You're rewarded with a sense of well-being, and I'm rewarded with money. Both of us walk away happy.

There are two catches, however.

The first is that we live on a finite planet. If the products and services I create for you use up our natural resources, eventually I'll have to stop. My wealth will end, your well-being will end, and we'll all be grumpy.

The second catch is that at some point, we seem to get less and less well-being from the stuff we buy. According to the rules (and advertising), increasing consumption should make us happier. But a number of studies seem to call that theory into question, if not refute it.

Combine the limitations of a finite planet and dubious correlation between wealth and happiness, and you see we're overdue for a bit of a recalibration. But what could a new model look like? Does wealth provide happiness? Or vice versa?

In 1972, Bhutan's former king coined the term Gross National Happiness. It framed his vision for an economy built on Buddhist principles, where material and spiritual development occur side by side.

Although somewhat fickle to measure, the idea captured the imagination of academics who created a GNH screen. As countries were measured for GNH, startling results began to appear. Yes, those living in poverty were made happier by money. But once people attained a lower-middle class level of financial security, more wealth didn't seem to come with greater happiness.

Not surprisingly, the news didn't cause our economies to grind to a halt. But with the looming threat of global resource shortages, the topic has come to the forefront again. And the GNH has inspired new measures like the Happy Planet Index, which measures well-being against ecological efficiency.

'Beyond Growth' Economics

In his speech at TED, Professor Tim Jackson said "We spend money we don't have, on things we don't need, to make impressions that don't matter." It's a depressing, and ultimately self-destructive path.

If Jules Peck has his way, brands of the future will help us move away from it.

Peck, founder of Abundancy Partners in the UK, was introduced to me at this year's Sustainable Brands conference. He works with corporations to redefine their concept of success - away from purely economic growth, and toward creating well-being for stakeholders.

Peck outlines five basic conditions that must be met for humans to feel greater well-being:

  • Connect with other people,

  • Achieve greater harmony within themselves,

  • Be more physically active,

  • Learn, and

  • Give back to society.

Granted, a single brand would be hard pressed to tick off all the boxes. But Peck believes each brand should help us achieve at least one.

"We need to understand that consumers buy the benefit, not the product - they want a hole, not a drill" Peck explains. "If we accept this, then we realize, for example, that a car is about connection, not metal. This significantly expands the brief for the automotive industry or their competitors."

He cites the popularity of services like Zipcar, Whipcar and tele-conferencing as examples of how we can fulfill our human need to connect, and drive business - all without depleting resources building new automobiles.

Beyond-growth economics is a radical concept that requires buy-in from both shareholders and the CEO. "It's a new paradigm, and could be misconstrued as slowing corporate prosperity. This in itself could make shareholders jittery" says Peck.

However, visionary companies like Unilever are dipping their toes in the water, and working with Peck on his Flourishing Enterprise strategic innovation process. Using this process, Peck helps them maximise the well-being they produce per unit planet input.

Peck says "its about a shift from seeing products as benefits to seeing production as a cost of maintenance of delivery to real societal well-being needs." In this Peck makes a distinction between 'real well-being needs' and 'marketing created wants'.

He believes moving beyond growth is a inevitable reality, indeed that we may already have reached the end of growth.

It's incumbent on corporations to find a better way forward, and to progressively lobby for an updated market. "Major companies are on this journey now but many others are slow to connect the dots. It's a matter of creating the movement, as opposed to being run over by the movement."

Learnings

The stone age didn't end because we ran out of stones. And shifting from a resource-draining economic model to one based on creating well-being through innovation seems equally inevitable. That said, daily news about resource scarcity, drought, and overconsumption will certainly hasten the process.

For companies to embrace beyond growth economics, they can't treat less product production as an obstacle, but rather a design imperative. BMW's new iProject shifted the brief from 'Ultimate Driving Machine' to 'Mobility'. And they're driving full-speed to become the company that owns an easier, more exciting way to get around and connect in the future.

In order to incorporate stakeholder well-being as an imperative for your company, you need three things: a brave CEO, shareholders who understand the big picture...and outside the jar thinkers who can help determine the potential for current brands to create consumer well-being. People who have gotten used to selling drills may not see the holes that consumers are looking for - you need fresh eyes on the problem.

 

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