By Professor Dennis R. Shaughnessy
My social enterprise and honors students are working on a new project this term. Bottom line: Why isn't there a Nobel Prize in Business? If there was one in the future, what would it look like and who should win it?
The Nobel Prize has been awarded in Sweden and Norway since 1901, and currently has six categories for the prestigious annual awards. While economics was the last new category for a Nobel to be added in (1968) to the original five (physics, chemistry, medicine, literature and peace), this category is largely devoted to the academic science of economics rather than its close relative her. business.
The most prestigious Nobel is of course the Peace Prize, which included the well-known and very deserving MalalaYousafzai in last year's award. All six prizes are awarded based on Alfred Nobel's (the inventor of dynamite) requirement that the individual's work provides “the greatest benefit to mankind.” A recent and controversial winner of the Nobel Peace Prize was Dr. Muhammad Yunus and his Grameen Bank for his pioneering work in microfinance and solidarity or group lending to women for income generation and without collateral. Since this 2006 Peace Prize was awarded to a bank and a banker for their contribution to poverty alleviation and thus peace, some have argued that this was a Nobel “loophole” for business. The Nobel Committee of course disagreed.
So why not a prestigious Nobel Prize in Business? As Michael Porter has captured so beautifully in his new “shared value” initiative, all the world's wealth is created by business. While other sectors, from governments to NGOs, are important players in the global economy, these sectors redistribute wealth rather than create it. So since business is responsible for the health and growth of the global economy, why not recognize outstanding leaders in the business community for their work at the same level as great scientists, writers and politicians? Hasn't the efficient and innovative creation of wealth through business done more to reduce poverty and improve the lives of more people than any other development in human history?
From discussions in our campus classrooms, a consensus has emerged on this issue. Most students believe that a Nobel Prize for Business should recognize business leaders and their businesses for extraordinary achievements and as wealth creators and as sources of social impact. In this dual eligibility requirement, business leaders will be recognized for disruptive innovation that has led to extraordinary wealth creation while creating a more inclusive and generous business model that fosters shared success, inclusive prosperity and social impact.
Who would you nominate for an inaugural Nobel Prize in Business if you could?
The combination of pioneering wealth creation and commitment to social impact is undeniably rare. We are often told that the fiduciary duty requires management to focus solely on creating wealth for investors. At least that was the late Milton Friedman's famous contribution to the debate about the purpose of business. So most talented business leaders focus on profit generation, if not maximization, and leave the rest to the government through taxation and redistribution of income or to charities through donations and donations. That said, more and more leaders and companies are waking up and committing to a vision of both financial and social performance. These are what we believe the Nobel should recognize and reward.
Sergey Brin of Google
On the wealth creation side alone, the choices aren't that hard. Steve Jobs at Apple, Sergei Brin and Larry Page at Google, and Mark Zuckerberg at Facebook come to mind from the technology sector, for example. They are all massive wealth creators who use disruptive innovation and exploit new and fast-growing markets to create great wealth for investors and workers.
On the impact side, there are of course the growing for-profit social enterprises of the last decade or two, as well as the leveraged and B-rated companies in the US market. They range from Grameen Bank to Aravind Eye Care on the other side of the world as pioneering social enterprises to Warby Parker and Patagonia as B-certified companies here in the United States. Note that in the impact area we tend to name the businesses rather than the founding leaders, whose names in this case are less familiar to many. (For the record, they are Muhammad Yunus, Govindapa Venkataswamy, Neil Blumenthal and Yves Choinard, respectively).
Our students have come up with some great nomination ideas.
An example of a “large-cap” candidate for the Nobel Business Prize is Marc Benioff at Salesforce.com, for incorporating philanthropy into his cloud-based innovation. Another is Dr. Kirin Shaw, India's first self-made billionaire, who built India's largest biotech company while focusing on ensuring access to essential medicines for the poor. The third, James Goodnight of the SAS Institute (the world's largest private software company), who created an employee- and customer-first business instead of the typical payday IPO. Today some would argue that Howard Schultz of Starbucks and his commitment to a free college education for employees creates a new way to close the opportunity gap and the growing inequality that results from it.
We would be remiss if we didn't answer Bill Gates' question. The world's leading philanthropist certainly deserves recognition (along with Melinda Gates) at the prestigious Nobel level for the Gates Foundation's work in global health and education. However, this work was outside of Microsoft's business model. In fact, Mr. Gates essentially followed the Milton Friedman model, devoting his wealth from a business focused on profit and financial return to his post-business philanthropy. Perhaps he will win a Nobel Peace Prize one day soon for the massive reduction in human suffering resulting from the Foundation's work on vaccines, along with the long overdue Dr. Paul Farmer of Partners in Health for Medicine.
While we are not suggesting that the Nobel Prize Committee in Sweden is ready to accept our proposals for a new Business Prize, we believe that recognizing truly great companies and outstanding business leaders who are together committed to changing the world for the better first step to lift the incredibly low approval ratings of the world's wealth creators. This concept presents an opportunity to add to the growing list of committed social enterprises and benefit companies some traditional large enterprises that see social responsibility in a new and exciting way.
