Can the world's most powerful CEOs, beholden as they are to tradition, the profit demands of shareholders and Wall Street financial analysts, embrace the concept of the common good and lead their companies in a more people and earth-friendly way?
I believe they can, especially as the global marketplace evolves. I had an opportunity to test that belief during conversations with many of the top chief executives in the world at the annual World Economic Forum in Davos, Switzerland. I ended up sharing my thoughts with more than 20 CEOs, economists, college presidents, diplomats and journalists, including some of the most recognizable names in the business world. They included Mike Duke, CEO of Walmart; Jamie Dimon, CEO of J P Morgan; Indra Nooyi, CEO of Pepsi; former U.S. Secretary of the Treasury Larry Summers; Muhammad Yunus, founder of Grameen Bank and winner of the Nobel Peace Prize; Wendell Brown, CEO of Appeo and Silicon Valley entrepreneur; Ray Schwarez, video journalist with PBS; Jack DeJoia, president of Georgetown University; David Gergan, consultant to several U.S. Presidents; Drew Gilpin Faust, president of Harvard University; Kenneth Rogoff, economist at Harvard University; Joseph Stieglitz, economist; and Bing Yiang, president of the largest business school in China.
I began by stating the premise that the highest priority of multinational corporations is to become number one or two in each product market. They all indicated in some way that they knew this was true (a monopoly is illegal but a duopoly is not). What was important about saying this is that it revealed that I was part of this conversation within that community, a conversation they usually avoid bringing up with the public or press. I was then perceived as being a part of the inside team, not against them.
The duopolization of our economy, where two companies control a large percentage of a product market, is all around us: Home Depot-Lowes, CVS-Walgreens, Airbus-Boeing, Anheuser Bush-Inbev-Miller Coors, Kellogg-General Mills, and many others. You may not have given it much attention, but increasingly, duopolization is dominating the marketplace.
Next I stated, "This will only become more extensive and at some point the public will become aware of it. The political left will then call it a monopoly with another face. The question will then become, 'How do duopolies protect their duopolies?'"
This question was always met with silence -- and keen attention to what I would say next. Solely in my judgment from the expressions on their faces, I do not think any of them had ever asked themselves that question. This is understandable. All the merger and acquisition activity has been fully focused on becoming a duopoly in each product market and not bringing attention to it.
I then continued, "There is only one thing the public will respect: the two companies will need to voluntarily reach agreements to raise the labor, environmental, and social playing field -- and keep it level -- while continuing to compete as their secondary priority." Every person, and this is not an exaggeration, expressed some words affirming complete agreement with that answer. I had not only provided the logical and natural answer to the question, but it was also a positive for the duopolies. So there was clearly nothing to dislike.
J.P. Morgan CEO Jamie Dimon initially responded positively but then said cooperation would be illegal and began to walk away. I turned to him and said, "You know there is a way for it to be legal. It is cooperation for the common good, not collusion." He turned and said, calmly and smiling, "You are right."
Most were interested in hearing more, so I provided an example of a business I know: ice cream. I serve on the board of Ben & Jerry's ice cream. Ben & Jerry's and Haagen Dazs control 86 percent of the super premium ice cream market in the United States. Ben & Jerry's is now owned by Unilever. Its CEO, Paul Polman, who many of them indicated they knew, is a progressive. So we could pilot this idea by having Ben & Jerry's and Haagen Dazs agree to have the minimum wage where our ice creams are produced be the livable wage in each area. Everyone wins. The employees win and the community wins. The smaller competitors would eventually join in the agreement rather than be attacked in the transparency of the Internet. Relative to one another there would not be an increase in the costs to the companies. The governments will love it because it is cooperation for the common good, not collusion. And the duopolies will be seen as cooperating to make the world a better place.
There is no global government or unions but there are global corporations. This will provide them the opportunity to take the lead to make the world a better place for us all, to end the race to the bottom in the use of people and communities and to lead in the rise from the bottom. I believe the first duopolies to market with this approach will have their brand names loved.
What was so interesting to me was that not a single person gave any indication he or she had thought of this as a possible future. That is why I am reporting it to you. It is a possible future and, in my judgment, now a most likely one.
However, it will not easily occur as long as we all continue in the immature assumption that competition, not cooperation, is fundamental in nature.
If I have an apple in my hand and neither you nor I want it, anyone could take it and we would both be as happy afterwards as before. However, if you want it and I want it, we could compete over it. Note this: the competition can only take place if there is agreement that who gets the apple is important. That is the cooperative context. Through a simple example such as this it is obvious that cooperation, not competition, is the fundamental process in nature. Anytime two people agree to do anything, from a conversation to building a company, there is a cooperative context: they both agree it is important to do it. I also shared this in most of these conversations at Davos.
"Cooperation," I explained, "is when the parts give priority to the whole. An obvious example is the parts of our bodies. Our lungs, hearts, liver, knees, and nose are all cooperating for the health of our bodies. Disease, such as cancer, is when some of the cells stop cooperating.
"So if cooperation, not competition, is the fundamental process in nature everywhere, the universe is an indivisible whole, just as Lao Tzu, Buddha, Moses, Jesus, Muhammad, Gandhi, Martin Luther King, Jr., Albert Einstein, and all the other greats concluded. No one has found the beginning, end, or edge of the universe. We do not understand how this can be, but there is much more we still do not understand as well. What is important is that cooperation is the fundamental process in nature and competition, compromise, and love are three forms of cooperation. Cooperation is only the opposite of competition in the dualistic system called 'language'; there is no opposite of cooperation in nature. It is fundamental and inescapable."
Without enlightened leadership, it will not be easy for the multinational corporations to take the lead to start primarily cooperating for the common good until the public learns about the rapid expansion of duopolies and reacts negatively. Then, out of self-protection, cooperation between duopolies will begin. What will make it much easier will be the realization that cooperation is, indeed, the fundamental process in nature. Consequently, they are already primarily cooperating (duopolization is non-verbal cooperation), and they will simply be cooperating more and doing it directly. They will continue to compete as a secondary priority. This will be in the self-interest of us all, especially the duopolies that, lets face it, no one will be able to close down.
Like it or not, duopolization is unstoppable. With enlightened leaders, the duopolies can lead our maturation into common good capitalism where the priority in the private sector is cooperation for the common good with competition enthusiastically continuing as the second priority.
Terry Mollner is a founder and member of the boards of StakeHolders Capital, Calvert Funds, and Calvert Foundation;email@example.com