 What does doughnut economics mean for business, and what do we mean by the deep design of business? These are some of the ideas and questions we'll be exploring in this short video. First, a quick recap on the doughnut. The doughnut consists of a social foundation to ensure that no one is less falling short on life's essentials and an ecological ceiling to ensure that humanity does not collectively overshoot the planetary boundaries that protect earth's life-supporting systems. The doughnut-shaped space between these boundaries is where humanity can thrive. In essence, doughnut economics cause on businesses to demonstrate how they are going to transform themselves so they will belong to a future that is in the doughnut. Align to and in service of a world where all people and the living planet thrive. Reaching this scale of ambition cause for transforming not only the design of products and the practice of business but the deep design of business itself. The ideas that we and businesses must pursue are bold and ambitious because the world is perilously out of balance. We are currently in overshoot on many of the planet's boundaries and we are in short for on life's essentials for hundreds of millions of people on this planet. Now to change this, we need to change the dynamics away from a degenerative economy that is linear and that is running down earth's life-supporting systems to a regenerative one that is working with and within the cycles of the living world. And at the same time, we need to move away from a divisive economy where we are seeing spiraling inequality and too few people capturing opportunity and the value that is created across our economies. And we need to move towards a distributive design of our economies, one that is sharing opportunity and value much more equitably with all who have co-created it. The journey from degenerative must not end at merely minimizing or eliminating hum. We can look to nature here for inspiration and genuinely try to be regenerative. Think for instance how the wildland next door to you behaves. It creates so many benefits such as sequestering carbon, cleaning the air, cleaning the groundwater, providing nutrients back into the soil even cooling down temperatures on hot summer days for local species. It's about going beyond simply eliminating harm by for instance ending deforestation. It's about going beyond reducing landfill by recycling our plastics. These are actions that are usually deemed to be sustainable but they're not enough. The goal here is to undo the damage that we have done to our living world while creating systems that design a way waste. Think for example of modular product design. Similarly the journey from divisive must not end at being inclusive. The goal is to distribute value and opportunity far more equitably with all who co-created it. It's about going beyond for instance a living wage for workers where businesses provide just enough for workers for their basic needs. Going beyond this could mean profit sharing models, pioneered and employee owned businesses for instance. We can also evolve away from a culture of hyper competition and move even beyond partnerships. We can make our ideas and technologies open source like Drupal does in technology and the outdoor clothing company Houdini does with its circular product designs. So what holds back these regenerative and distributive ideas from being pursued by all businesses? We know about these ideas. We know about these innovations. We know the way to make the world more regenerative and more distributive and many of the industries business operates in. Well to explore this question we worked with hundreds of businesses around the world to identify some of the things that hold back ambition and enable ambition. What we found was that there were a range of things within the business. Outdated processes, rigid financial targets, short term thinking, a culture of hierarchy that was holding back these transformative ideas that can help us get to a regenerative and distributive economy. What we found among the businesses that were pursuing regenerative and distributive ideas was that they were suspending practicality. So they were putting the biggest ideas on the table even if it didn't seem practical or plausible immediately. They were bringing in broader perspectives. They were thinking far more long term and they encouraged the culture of courage so that across their business and organization people spoke up with the biggest, boldest ideas possible. Now unfortunately most businesses find that they are limited by their own deep design. Let me provide a few examples from our work with businesses of late. We met one former senior executive from a major footwear brand that told us his story about how they had designed a lower priced shoe that would be affordable for millions of children who currently lack good quality footwear around the world. The shoe would also be more durable as it could be expanded as the child's foot grew avoiding the need to replace it regularly. This shoe would be both ecologically beneficial and socially beneficial and it would be profitable for the company providing the company with a margin and allowing them to reach new customers around the world who normally could not afford their products. When the idea was pitched within the company however, it was declined as it didn't meet the usual high margin requirements of that business. Similarly we met senior executives in a beauty company that told us how they were unable to unlock the needed investment to move towards refillable perfume bottles. The single most important way for them to meet their net zero carbon commitments. We also met executives in fashion that faced inflexible margin expectations in attempting to move to regenerative clothing. These are some of the ways that the deep design of a business holds back transformative ideas. Now let's consider how we have designed businesses in relation to the broader society and economy we find ourselves in. If we look at the commons, communities, public services, NGOs and charities we'll find that many of the organisations across those sectors are designed to generally enable them to pursue regenerative and distributive ideas. There are fewer limitations on what they can do in pursuit of their social or ecological goals. However when we look at business and the way it is designed to maximise margins and maximise dividends what we find is that it can only pursue regenerative and distributive ambitions and ideas if it is going to achieve those maximum margins and maximum dividends. So the obvious conclusion here is let's redesign business. If the world and society needs business to pursue these regenerative ideas and these distributive ideas then we will need to redesign business to unlock all of those possibilities. Now Donut Economics takes a very particular focus on transforming the deep design of business but there are also many other effective ways to transform business as well and it's very important to recognise these. For instance, there are many efforts to exert public pressure bringing in effective regulation of companies to try to bring together workers or farmers, communities, consumers so that they can collectively organise to exert pressure to change business practices. There's also a lot of effort to improve leadership across the business world to set targets and goals and metrics in a much more effective way and to make the business case that there will be a better return for companies in the long term if they got on board with this kind of an agenda but to reinforce all of these and to drive even further ambition Donut Economics focuses on transforming the deep design of business. To explore the current design of businesses around the world and the way we can help redesign them we propose a framework that looks at its purpose, its networks governance, ownership and finance. This framework is drawn from the work of author and theorist Marjorie Kelly and it looks at that 20th century question that's held back business through its deep design, that question that asks how much value can we extract through this enterprise and urges us to move towards a 21st century version of that question that says how many benefits can we generate through this enterprise. In exploring these five design layers let's begin with purpose Now think about the fashion industry Is the purpose to produce as much as possible, as quick as possible for as cheap as possible, as in the case of fast fashion or is it to create high quality garments from natural fibres and distribute the value to those who make the garments as in the case of Manastel Uruguay a business owned by the women artisans spread across Uruguay Here we ask why does the business exist and how is its purpose embedded in its operations in its products and its services Is it willing to transform these in pursuit of its purpose The second design layer is networks which is all about the nature of the relationships with customers, suppliers, staff, communities commercial partners We ask questions like are its supply chains made up of commodified relationships where there is no commitment to suppliers or does it make long term commitments to suppliers to support them with orders and financial flexibility even during crises like the German brand and distributor of products El Prente which gives a board seat and co-ownership to its suppliers When exploring the design of a business we also ask about the relationships with governments Is it trying to avoid tax and lobby against regulations and progressive action or is it paying a fair share of tax and joining business networks that are advocating for ambitious government action on ecological and social issues The next design layer is governance To evaluate the design of the governance of a business we ask questions like which stakeholders are represented on the board and which should be How do decision making processes navigate trade-offs between social, ecological and financial goals and how transparent is the business Think here about the governance and specifically the board model of River Simple a hydrogen car company based in Wales Its board has a future guardian governance model that includes six custodians on the board of directors representing the interests and perspectives of stakeholders like the environment, customers, communities staff, investors and commercial partners This fundamentally reshapes how priorities are set and how difficult decisions are navigated The design of the board of decision making processes and metrics of success are all design choices that are made by every business The fourth design layer is ownership Here we look at who owns the business their commitment to the purpose how long term the ownership is for and to what extent these owners can change or undermine the purpose of the business We also look at the stakeholders who are represented in the ownership mix and we ask how the expectations of owners can shape business decisions Think here about the example of Patagonia which is recently proclaimed that Earth is now its only shareholder Patagonia deployed essentially a steward ownership model to create two classes of shares in its ownership redesign One share class holds all the dividend rights but none of the voting rights While getting the profits, this redesign means that this particular share class cannot pressure Patagonia to increase its profits The second share class gets all the voting rights but none of the dividends This share class, which is actually the Patagonia purpose trust is not focused on increasing profits meaning it can truly be a steward of Patagonia's social and ecological purpose and use the power of its voting shares accordingly In essence, through the steward ownership model Patagonia separated power and money in its ownership model If you're a decision maker within Patagonia after this ownership redesign it is now even clearer that the priority is the purpose and there is no pressure to keep growing profits This can unlock a new level of ambition and possibilities across the business There are many other emerging possibilities in ownership design that are being pioneered around the world from platform cooperatives to employee ownership from community-owned businesses to a broad range of hybrids and multi-stakeholder models All of these are helping redesign ownership in a pivotal way Now the fifth and final design layer is finance Looking at a business through the perspective of donut economics means we pose questions like what does the finance behind the business expect and demand and do margin requirements adapt to enable transformative ideas We also ask questions like is reinvestment enabled through mechanisms like for instance a cap on dividends and whether investors receive a fair return but the priority remains for finance to serve purpose As we showed through our examples earlier in shoes, beauty products, fashion financial parameters can either block or enable transformative ideas Let me give an example Think of the partnership between the body shop and the social enterprise Plastics for Change Now this partnership created the world's first large scale fair trade recycled plastic achieving improved and more stable livelihoods for waste pickers in India who collect plastic waste To make the partnership work the financial parameters were adapted to consider broader perspectives of value going beyond a focus on immediate financial value The willingness to go beyond margins and costs unlock the needed commitment and investment from the body shop to make this partnership work Shaping the financial parameters within businesses is a critical design choice for all businesses who are hoping to be regenerative and distributive by design Purpose, networks, governance, ownership and finance So that is the journey through the very DNA of business the deep design of business And as a recap, why should we be looking at redesigning business? Well, it could be because we want to make sure that the internal processes of the business like product design is aligned with the purpose of the business It might be because we want to enable new deeper partnerships and engage stakeholders such as through supply chain partnerships transferring supplies into ownership or governance roles It could be about channeling investment into transformative ideas making sure that reinvestment is happening internally It could be through protecting the legacy and protecting the mission of a business and most critically of all it is to become regenerative and distributive by design so the business belongs to that future economy that we must create If you are interested in these ideas we have a tool available at DonutEconomics.org that talks businesses and those working with businesses through the journey of asking essentially two big questions How does the design of your business block transformative action and how could a redesign of your business unlock transformative action We hope this has been useful and that your own journey through the deep design of business is a fruitful one