Kate Raworth is an Oxford University-based economist who specializes in writing about the specific challenges the 21st century brings with it.
Her recent book, Doughnut Economics gives an insight into many of the modes of thinking the upcoming generations are being brought up in. As leaders in business, and in customer insight, it’s a great book to read to see what our businesses will face in the coming years, and what we may all have to do to meet radically-changing markets and people…
Raworth’s book encourages us to look beyond the perpetual pressure for financial growth and to create companies and cultures that are more sustainable and inclusive. She proposes that the perfect space for us and our companies to inhabit is between the social foundation of our cultures and the ecological ceiling of our planet.
Doughnut Economics review: Top 5 takeaways
- The upcoming generation is questioning the prevailing economic wisdom of growth at all costs. Economics theory is very narrow in its assumptions and in recent years, particularly since the financial crash of 2008, many economics students have been seeking a revolution in approach that is not just about linear growth into infinity. The generations now entering the economy for the first time bring with them a great deal more awareness about the challenges our planet faces; with veganism, recycling, carbon footprint, health and sustainability being high on many of their agendas. If we want to win the customer of the future, we cannot ignore the causes in which they increasingly believe. Embracing them now will help position teams and companies for the future.
- Visualisation matters enormously. In telling any story or communicating any theory, a picture really does speak 1000 words. We learn best when there are pictures to look at. While Raworth makes this point in order to explain why the doughnut picture is so important in her model, I also took away that when we communicate our visions for better and more caring companies and teams, we should use the power of imagery and visualisation to effect change and keep our holistic and inclusive goals top of mind.
- We should question the dominance of the economists’ perspective of the world. we are brought up to believe that finance and the economy are the most serious and important of things. Raworth points out that stock tickers and company results routinely make the news in a way that many other very important things do not. She questions the validity of this, and encourages her readers to as well.
- Companies should adopt living metrics, not just monetary ones. It’s never easy to get a broad sweep of how a company is doing; we are all taught from early on that financial indicators are of primary concern. Raworth cites The Body Shop’s founder Anita Roddick who said one of her biggest mistakes was taking the company public because the city’s definition of success was so narrow compared to the company’s. The city cared about profit only, whereas Roddick’s ambitions were so much wider. What metrics can we build into our companies that take account of what we give back, what we share, how happy people are?
- Inequality is not an economic necessity. Raworth calls for systems that are redistributive in economic terms. It struck me that we should seek to design employee and customer programs that are redistributive too. For example, Pret a Manger gives its uneaten food to local homeless shelters; at the end of each day, a huge number of volunteers arrives to collect each day’s unsold food and then delivers it to hostels and charities supporting the homeless. In a single stroke reducing food waste and helping the homeless and hungry. There will be similar efficiencies at work in all of our teams and businesses. We all have spare time, resources, materials, ideas if we look hard enough and we can share these to balance things up.
Doughnut Economics review: Top 5 quotes
- “If reinforcing feedbacks are what make a system move, then balancing feedbacks are what stop it from exploding or imploding. They counter and offset what is happening, and so tend to regulate systems.”
- “‘There are no side effects – just effects, [said systems dynamics expert John Sterman] pointing out that the very notion of side effects is just ‘a sign that the boundaries of our mental models are too narrow, our time horizons too short'”
- “…the economist’s perspective on the world has only spread, even into the language of public life. In hospitals and clinics worldwide, patients and doctors have been recast as customers and service-providers. In fields and forests on every continent, economists are calculating the monetary value of ‘natural capital’ and ‘ecosystem services’…”
- “The monopoly of monetary metrics is over: it’s time for a panoply of living metrics. And instead of focusing on the throughflow of monetary value as GDP was designed to do, the new metrics will monitor the many sources of wealth – human, social, ecological, cultural and physical – from which all value flows.”
- “When it comes to new economic thinking, draw the change you want to see in the world too. By combining the well-known power of verbal framing with the hidden power of visual framing, we can give ourselves a far better chance of writing a new economic story.”
The word economics – from the Ancient Greek – literally means household management, and Raworth’s book reminds us about the importance of housekeeping; looking after the whole house, and not just the growth/profit aspect.
And moving from Athens to Rome… it was certainly not built in a day but this book certainly made me question what more I can do, and what more my company can do to be more doughnut-esque. Whether you command a small team or a huge business, if we all start looking at our upcoming initiatives and building in more sustainability and wider definitions of success, it will help enormously. – Lindsay
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