Mars CEO Grant Reid Shares Economics of Mutuality Principles
Published March 2019
Grant Reid, CEO of Mars, Incorporated, was interviewed in January by Joel Weber, Editor of Bloomberg Businessweek. He spoke about long-held principles underpinning the company – principles that have inspired the Economics of Mutuality, a breakthrough management innovation developed by Mars’ internal think-tank over the last decade.
The interview was broadcast on television, published in print and posted online. Highlights have been transcribed below.
Mars: 100+ years old, family-owned, privately held, very secretive for much of its history. What are the biggest advantages as a business leader that that provides you?
I think it starts with that I work for real people. The Mars family are very knowledgeable about the business. They’re very interested in the business and for them it’s more than just financial performance. A lot of people think because we’re privately held you don’t have to perform financially. You do, because they have an alternative to put their funds elsewhere.
But it’s much more than that. They believe that it’s not just what we do, but how we do it. One of the five principles is how we do business. The bigger differential is the why. They really believe – and I think it’s right – that economics of mutuality, which is putting something back into the communities, the environment, the supply chain and the stakeholders. They were talking about that way back in the 40s, long before it was fashionable. I think that is a big difference.
I think the fact that I can sit down and talk to family members. It is their business and they really care – not only about the business – they care about the brands… about our associates. That’s a big difference. How do you turn that into advantage? They take very little out. They reinvest in us. They reinvest in the consumer. They reinvest in the environment that we operate in. That’s one big difference in terms of the dividend level vs. some other companies. It’s their approach and their love for the business.
Mars is about a $35 billion-a-year business. What do you want that number to be and how do you get there?
We think we can double it in the next ten years. We’ve grown several billion in the last couple of years. But it’s not just about growth for the sake of growth. Part of what we do is for higher-order purposes. The way that we do business today creates the world that we want tomorrow. That’s why you’ve seen us so active in things like sustainability.
We have a Sustainable in a Generation Plan. We’re working with farmers in Côte d'Ivoire with climate change. We believe the bigger we are, the more good we can do. But it’s not just because we’re egalitarian. We really think the economics works. If you go back to the Milton Friedman time, where shareholder value was the number one; we believe that there’s a balance between not only the financial performance, but the social, human and natural capital as well. When you put that together, it’s an amazing package. That’s why we attract such great talent – because of the higher order purpose.
It’s not just about being big. It’s a combination. Performance without purpose we say is meaningless. But, similarly, purpose without performance just isn’t possible. It’s that magic combination.
Edited for space and clarity. Photo: Bloomberg/Mars.com.
