Economics of Mutuality (EoM)

I’m really excited to chat with you today about something that’s been shaking up how we think about business and the economy.

It’s called the Economics of Mutuality (EoM), and it’s all about flipping the script on traditional capitalism. You know how most companies are laser-focused on maximizing profits for their shareholders? Well, what if I told you there’s a different way—a way where businesses can still make money but also create real, positive impact for everyone involved? That’s what EoM is all about, and it’s not just some pie-in-the-sky idea; it’s being put into practice by real companies, with some pretty amazing results.

So today, we’re going to talk about where this idea came from, how it works, and look at some cool examples of companies that are making it happen. Trust me, by the end of this, you’ll see business in a whole new light!

How It All Started: The Origins of EoM

Let’s rewind a bit to how this whole thing got started. The Economics of Mutuality was born out of Mars, Incorporated—yep, the same folks behind your favorite candies like M&M’s and Snickers.

But here’s the thing: Mars isn’t just about satisfying your sweet tooth. They’ve been quietly rethinking how businesses should operate.

The idea for EoM came from a pretty simple but profound question: “What if business could be a positive force in the world, not just a money-making machine?”

This all started with a deep dive into what really creates value in business—not just financial value, but value for people, communities, and the planet. The team at Mars began to realize that by focusing solely on profit, businesses were actually missing out on huge opportunities to create broader, more sustainable value.

So, they started experimenting with a new model, one that measures success not just by profits, but by the well-being of all stakeholders involved.

The Theoretical Framework: What Is Economics of Mutuality?

Alright, so what exactly is the Economics of Mutuality? Imagine a business model where you don’t just think about your shareholders, but also about your employees, the communities you operate in, and even the environment. It’s about creating shared value—where everyone benefits, not just the folks at the top.

At its core, EoM is built on three main pillars:

• Multi-Stakeholder Value Creation: This means businesses should aim to create value for everyone involved—employees, customers, suppliers, communities, and the environment—not just shareholders. It’s a shift from a narrow focus on profit to a broader, more inclusive approach.
• Holistic Performance Metrics: Traditional business metrics are all about financial returns. But EoM introduces new ways to measure success, like social capital (the value of relationships and networks), human capital (the skills and well-being of employees), and natural capital (the health of the environment). These metrics give a more complete picture of a company’s impact.
• Purpose-Driven Business: At the heart of EoM is the idea that businesses should have a purpose beyond just making money. This purpose should drive decision-making and be aligned with the long-term well-being of society and the planet.

What’s cool about this framework is that it’s not just theoretical. Companies are actually putting it into practice and seeing real results.

How EoM Works in Practice: The Operating Model

So, how does this all work in a real company? Let’s break it down.

When a company adopts EoM, they start by rethinking their purpose. This isn’t just a mission statement on a wall—it’s about deeply understanding what the company stands for and how it can contribute to society. Once that’s clear, the company then looks at how it can create value across all its stakeholders.

Take employees, for example. Under the EoM model, a company doesn’t just see employees as a cost or a resource to be managed. Instead, they’re seen as partners in value creation. This might mean investing in their well-being, offering opportunities for growth, or ensuring they’re paid fairly. The idea is that when employees thrive, the company thrives.

Next, there’s the community aspect. Instead of just extracting resources or labor from a community, companies practicing EoM look for ways to give back. This could be through community development programs, supporting local businesses, or ensuring their operations don’t harm the local environment.

And then there’s the environment itself. EoM pushes companies to think about their environmental footprint—not just as a compliance issue, but as a core part of their business strategy. This could mean reducing waste, cutting carbon emissions, or even rethinking how products are made and used to ensure they’re sustainable.

All of this gets measured using the holistic metrics we talked about earlier. Companies track not just financial performance, but also their impact on social, human, and natural capital. This gives them a much fuller picture of how they’re doing and helps them make better decisions for the long term.