By Professor Dennis R. Shaughnessy
My social enterprise and honors students have been working on a new assignment this term. The gist: Why isn’t there a Nobel Prize for Business? If there were to be 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 highly prestigious annual awards. While economics was the last new category for a Nobel added in (1968) to the original five (physics, chemistry, medicine, literature and peace), that category is very much dedicated to the academic science of economics and not to its close relative, business.
The most famous Nobel is of course the Peace Prize, which included the well-known and highly deserving MalalaYousafzai in last year’s award. All six prizes are awarded based on Alfred Nobel’s (the inventor of dynamite) requirement that the person’s work provide “the greatest benefit to mankind.” A recent, and controversial, winner of the Nobel Peace Prize was Dr. Muhammad Yunus and his Grameen Bank for its groundbreaking work in microfinance and solidarity or group lending to women for income generation and collateral-free. Since this 2006 Peace Prize was awarded to a bank and a banker for its contribution to poverty alleviation and thereby peace, some argue that this was a “backdoor” Nobel for Business. The Nobel Committee of course disagreed.
So, why not a prestigious Nobel Prize for Business? As Michael Porter has so nicely captured in his new “shared value” initiative, all of the world’s wealth is created by business. While other sectors, from governments to NGOs, are major players in the world economy, these sectors redistribute wealth rather than create it. Since business is therefore responsible for the health and growth of the global economy, why not recognize outstanding leaders in the business community for their work on par with great scientists, writers, and statesmen? Hasn’t the efficient and innovative creation of wealth through business been the greatest contributor to reducing poverty and improving the lives of more people than any other development in human history?
From discussions in our campus classrooms, a consensus has arisen on this topic. Most students believe that a Nobel Prize for Business should recognize business leaders, and their enterprises, for extraordinary achievement both as wealth creators and as sources of social impact. In this dual requirement for eligibility, business leaders would be recognized for the disruptive innovation that has led to extraordinary wealth creation while creating a more inclusive and generous business model conducive to shared success, inclusive prosperity, and social impact.
Who would you nominate for an inaugural Nobel Prize for Business, if you could?
The combination of breakthrough wealth creation and commitment to social impact is arguably rare. We’re often told that fiduciary duty requires that management focus exclusively on wealth creation for investors. At least that was the late Milton Friedman’s famous contribution to the discussion on 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 income redistribution, or to charities through donation and giving. Having said that, more and more leaders and companies are rising up and committing to a vision of both financial and social return. These are the ones we think the Nobel Prize should recognize and reward.
Sergei Brin of Google
On the wealth creation side alone, the choices are not so difficult. Steve Jobs at Apple, Sergei Brin and Larry Page at Google, and Mark Zuckerberg at Facebook come to mind from the technology sector, for instance. They are all huge wealth creators using disruptive innovation and exploiting new and rapidly growing markets to create great wealth for investors and employees.
On the impact side, there are of course the rising for-profit social enterprises of the last decade or two, as well as the benefit corporations and B-certified 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 States. Notice in the impact area we tend to name the enterprises rather than the founding leaders, whose names in this case are less well known 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 ideas for nominations.
One example of a “large cap” nominee for a Nobel Prize in Business is Marc Benioff at Salesforce.com, for integrating philanthropy into his cloud-based innovation. Another is Dr. Kirin Shaw, India’s first self-made billionaire, who built India’s largest biotechnology company while focused on ensuring that necessary drugs were accessible to the poor. A third, James Goodnight of SAS Institute (the world’s largest privately-held software business), who built an employee- and customer-first business in lieu of the typical IPO mega-pay day. Today some would argue that Howard Schultz of Starbucks and his commitment to a free college education for employees is creating a new way of reducing the opportunity gap and the rising inequality that results from it.
We would be remiss if we didn’t address the question of Bill Gates. The world’s leading philanthropist certainly deserves recognition (along with Melinda Gates) at the prestige level of the Nobel for the work of The Gates Foundation in global health and education. But, that work has been outside of the Microsoft business model. In fact, Mr. Gates has essentially followed the Milton Friedman model, dedicating 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 mass reduction in human suffering resulting from the Foundation’s work in vaccines, along with the long overdue Dr. Paul Farmer of Partners in Health for Medicine.
While we’re not suggesting that the Nobel Prize Committee in Sweden is ready to accept our suggestions for a new Business award, we do think that recognition of truly great companies and extraordinary business leaders that are together committed to changing the world for the better is the first step in lifting the dismally low approval ratings of the world’s wealth creators. This idea presents an opportunity to add to the growing list of committed social enterprises and benefit companies some traditional large businesses that view social responsibility in a new and exciting way.
