It All Began With a Question

It is not typical for a shareholder to be concerned that their company is too profitable. But it is common for the most significant and revealing journeys to begin with one profound question. This is ours.

What Should Be the Right Level of Profit?

In 2006, a year and a half before the global financial crisis shook the foundations of society, John Mars, then Chairman of Mars, Incorporated, asked, 'What should be the right level of profit?’

This was an astounding question to be asked by a shareholder, as most shareholders would define the ‘right’ level of profit as the maximum that can be extracted from a value chain and distributed to them as dividends.

Mars tasked Catalyst, its internal think-tank, with examining the moral and business implications of the question. After an initial analysis of the relationship between profit and growth, Catalyst deduced that considering traditional measures of business performance would be inadequate.

Following a decade of partnership with other multinational companies and leading universities, Catalyst’s research culminated in the Economics of Mutuality — a new school of thought that offers a viable alternative to Friedman’s Chicago School — a more mutual form of capitalism suitable for the contemporary business landscape.

A Catalyst for Transformation

For more than half a century, Mars invested in Catalyst, a distinctive thought leadership capability composed of highly skilled, diverse Mars Associates with unique access to experts. Catalyst held a mandate for creative risk-taking in order to conceptualise, develop and pilot breakthrough business solutions.

Bruno Roche, then Mars Chief Economist, took over Catalyst’s reins in 2006. His team developed groundbreaking methodologies in both marketing effectiveness and M&A integration. He oversaw the expansion of Catalyst from its US & European centres into a truly global organisation.

In 2020, Catalyst was re-deployed as the Economics of Mutuality platform, which is structurally independent from Mars, but supported by it as a key partner. This shift took place so that Catalyst’s learnings could be shared beyond the boundaries of one company.

A Long History of Mutuality at Mars

In 1947, Forrest Mars Sr. described mutuality as the ‘total purpose for which the company exists’. Mars, which now employs more than 125,000 Associates in 80 countries with annual revenues approaching $38bn, has long understood that success results from sharing benefits within the context of durable, reciprocal relationships.

Today’s CEO, Grant Reid, explains how the Mars family has always believed in the power of making business mutual: ‘... 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.’

To find out more, click the button below to read a freely accessible chapter of our book Putting Purpose Into Practice: The Economics of Mutuality. You can also watch the webinar below that was recorded as part of series accompanying the book launch.