Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. But the past
Speaker 1: couple of years, due the pandemic, the continued exposure of
Speaker 1: racism and society, the truckles, the struggles of our world
Speaker 1: and workers overall have led to companies and global senior
Speaker 1: leadership coming out making pledges to do better, be better,
Speaker 1: and embrace all of society stakeholders. And yet, as our
Speaker 1: next guest will share, there is more to it in
Speaker 1: getting it right and building out responsible innovation. It's something
Speaker 1: we talk a lot about here at Bloomberg Business Kevin Manias,
Speaker 1: founding partner at Category Design Advisors. He joins us on
Speaker 1: the phone from New York City. His new book is
Speaker 1: called Intended Consequences, How to build market leading Companies with
Speaker 1: Responsible Innovation. Kevin, how are you hey? I'm great, Thanks
Speaker 1: for having me on. Hey, it's really great to have
Speaker 1: you with us. I want to hear the origin story
Speaker 1: here and the moment that you realize that what you've
Speaker 1: been observing, what you've been writing about, it was it
Speaker 1: was perfect for a book. Take me into it well.
Speaker 1: I co authors us with a guy named Haymont Tunisia,
Speaker 1: and Haymont is the guy who runs the General Catalyst,
Speaker 1: which is now one of the most powerful VC in
Speaker 1: Silicon Valley. This is the third book we've written together.
Speaker 1: So we had over the last five or six years,
Speaker 1: constantly conversations about what's going on, what do we know,
Speaker 1: what do we want to say? Things like that, and um,
Speaker 1: one of the things we've it's been on our minds was,
Speaker 1: um that just as you say, right the um, there's
Speaker 1: been constant conversation about we gotta be responsible, we gotta
Speaker 1: be addressed, all stakeholders, all this kind of stuff. Um.
Speaker 1: But uh, it was all kind of um like, all right, well,
Speaker 1: that would be a nice thing to do, but nobody
Speaker 1: had actually come up with what we What we noticed
Speaker 1: was nobody had come up with like a playbook, Like
Speaker 1: if you're a founder starting a company and you're saying,
Speaker 1: like I really want to do that. I mean, I
Speaker 1: think it's important, I think it's the best way to
Speaker 1: do business. But nobody had actually written like, how do
Speaker 1: you think that through and build it into your business?
Speaker 1: And so that's what we decided to do. We we
Speaker 1: wanted to help a new generation of founders and perhaps
Speaker 1: people who know already have companies and are and are
Speaker 1: doing well, uh, to have a way to think through
Speaker 1: these issues. Well, and what's interesting too, And I was
Speaker 1: thinking about your book because it really does know how
Speaker 1: to build these companies and it really plays to the
Speaker 1: startup world. But I do wonder, Kevin, can we as
Speaker 1: we see this rotation going on in the established corporate
Speaker 1: America or or global corporate world of companies, you know,
Speaker 1: laying out E s G practices talking about sustainability, being
Speaker 1: good global corporate citizens. Um, how do you view all
Speaker 1: of that? Because there's an awful lot of investment money
Speaker 1: playing into that as well. Yeah. Well one of the
Speaker 1: probably the key point that we make here is that, um,
Speaker 1: it's it's all fine to say that you're you're going
Speaker 1: to do this but the um but but it's not
Speaker 1: really baked into the company unless it's part of the
Speaker 1: like the business model has to actually do better if
Speaker 1: you're doing better. Um and and uh so you know,
Speaker 1: if you're an investor, for instance, and you're looking at
Speaker 1: like E s G scores just measure an outcome, They
Speaker 1: don't actually tell you what the company is really like
Speaker 1: doing as a as a and um. And if you're
Speaker 1: an investor and you really believe in this and and
Speaker 1: by the way, we believe that it's actually the path
Speaker 1: to better profits and better long term sustainability of a company. UM,
Speaker 1: then I would look behind the curtain and ask yourself,
Speaker 1: does the business model actually support it? Does the business
Speaker 1: model do better? And you know, a great example of
Speaker 1: that is, you know, if you're you know, Facebook can
Speaker 1: say all at once about like we're going to be responsible,
Speaker 1: we're gonna we're gonna do this with our AI and
Speaker 1: all that kind of thing. But Facebook's fundamental business model
Speaker 1: works against it being able to hold to the hold
Speaker 1: that line. So you know, if you're an investor, look
Speaker 1: behind the scenes and ask yourself, does the business model
Speaker 1: actually support those good intentions? Okay, this is we only
Speaker 1: have about a minute left, but we're gonna come back
Speaker 1: with you and we're gonna have more time. But this
Speaker 1: is a question that certainly requires more than a minute
Speaker 1: for an answer, so we can you can think about
Speaker 1: it more too. Is it possible to do this to
Speaker 1: succeed in this framework as a publicly traded company or
Speaker 1: do you have to do this as a private company?
Speaker 1: Because when Carol and I report on earnings every quarter.
Speaker 1: It's top line, it's bottom line. I'm not saying do
Speaker 1: they not have you know, do they not impact the environment?
Speaker 1: Were they thinking about their workers? Were they contributing to society?
Speaker 1: We don't ask those questions. Amazon stock did not move
Speaker 1: higher today because of you know these metrics, right right? Well,
Speaker 1: the short knowing you learn a much time. The short
Speaker 1: answer is yes, And I can explain why when we
Speaker 1: come back, if that's what you want me to do, perfect, Absolutely,
Speaker 1: we're gonna come back with Kevin many, founding partnered Category
Speaker 1: Design Advisors. He's got a new book out, Intended Consequences,
Speaker 1: How to Build market leading Companies with Responsible Innovation. I
Speaker 1: want to get back to our guests. We're talking with
Speaker 1: Kevin Maney, author of Intended Consequences, How to Build market
Speaker 1: leading Companies with Responsible Innovation. He is founding partner of
Speaker 1: Category Category Design Advisors. Excuse me, and he's still with
Speaker 1: us on the phone in New York City. So when
Speaker 1: you look out at the landscape, Kevin, and you work
Speaker 1: with a lot of companies, and you you help UM
Speaker 1: companies when it comes to messaging and strategy and innovation
Speaker 1: and communication UM. But when you look at our companies
Speaker 1: that are their startups, are those that have been around.
Speaker 1: Who do you think gets it right? Well, so let
Speaker 1: me let me jump in that from the also from
Speaker 1: the earlier question about can public companies do this? Oh,
Speaker 1: I'm sorry, I forgot about that. No, no, but these
Speaker 1: these things actually converge because because you know, one of
Speaker 1: the most successful companies I'm a planet at doing this
Speaker 1: is Tesla and UM. And if you think about Tesla,
Speaker 1: I mean, it's business model is depends on it helping
Speaker 1: with climate change and in fact, you know, and must
Speaker 1: runs the company as a climate change company, not as
Speaker 1: an electric car companys. Why it's in batteries and then
Speaker 1: solar and getting into all these other things. So UM,
Speaker 1: you know, to go back to that earlier comment about
Speaker 1: UM that to really be a responsible innovation company you
Speaker 1: have to have it baked into the business model. Your
Speaker 1: business has to do better if you do the right
Speaker 1: thing better, And in Tesla's case, the more it helps
Speaker 1: get carbon out of the out of you know, the atmosphere,
Speaker 1: carbon emissions out of the atmosphere and all of that,
Speaker 1: the better of the businesses because it's selling more electric
Speaker 1: cars and selling more batteries whatever. UM and so it's
Speaker 1: it's absolutely possible for public company to be that as
Speaker 1: long as it's baked into the business model and UM.
Speaker 1: There are all sorts of startups that i've you know,
Speaker 1: counter worked with. We feature one, for instance, in a
Speaker 1: book called City Block Health and City Blocks found a
Speaker 1: way to be UM to have build a profitable business
Speaker 1: on the idea of bringing healthcare to the populations that
Speaker 1: I can't afford it, to get it late from homeless
Speaker 1: people and like that. UM and and so the more
Speaker 1: that it helps people who can't get healthcare get healthcare,
Speaker 1: the more profitable and the better the company is. And
Speaker 1: it's valued at over a billion dollars. Now it's a
Speaker 1: private company, but it's uh, you know, certainly has an
Speaker 1: intent to go public at some point. Hey, Kevin, I
Speaker 1: want to I want to go back to this Tesla example,
Speaker 1: because I think of Tesla and I definitely think of
Speaker 1: the business model from the perspective of climate change and
Speaker 1: being a climate first company. But at the same time,
Speaker 1: I think of the way that Elon Musk has come
Speaker 1: into criticism for the way that he's treated employees in
Speaker 1: the past, the way that the National Labor of Relations
Speaker 1: board ruled that Tesla had fired a worker illegally who
Speaker 1: was involved in union organizing. So I'm just wondering how
Speaker 1: you square those things because and look, even this week
Speaker 1: we learned from the President that a Berg story about
Speaker 1: how the President doesn't want to even mentioned Tesla because
Speaker 1: it's not a union company. So how do you square
Speaker 1: that in this in this framework? Well, I mean, look,
Speaker 1: I agree with you there there is a caveat that
Speaker 1: Elon Must himself at times acts badly. Um. But I
Speaker 1: just want to, you know, take the step away, to
Speaker 1: step away from that, just to the idea that back
Speaker 1: to the idea that Tesla is a company that is
Speaker 1: built on a business model that helps the planet, you know,
Speaker 1: with climate change, um and and so on the bottom line,
Speaker 1: the better the company helps the planet, the better the
Speaker 1: company does and it will be more profitable if you
Speaker 1: a better stock and all of that. Elon Must may
Speaker 1: do some weird things that that you know, hurt the
Speaker 1: company as a as an individual, um, But I think
Speaker 1: we have to separate those things from each other. Yeah,
Speaker 1: because it's interesting. We have a lot of conversations, Kevin
Speaker 1: have just how executives and the c suite and senior
Speaker 1: officials kind of square profitability against doing right. Like I've
Speaker 1: talked to, you know, senior officials at a B in
Speaker 1: Bev And I mean they're constantly seeing the environment because
Speaker 1: access to water, access to barley hops, you name it.
Speaker 1: I mean, climate change has impacted them pretty dramatically. And
Speaker 1: so a company like that is taking measures because I
Speaker 1: think it has to for the existence of its business.
Speaker 1: But it but it's tough because it does feel like
Speaker 1: we have a lot of conversations of people saying they
Speaker 1: want to do good, whether it's the environment, whether it's
Speaker 1: for workers, workers rights, you name it. And yet when
Speaker 1: it comes to it, that talk doesn't always lead to action.
Speaker 1: Well's true, and and in tastes like a company like
Speaker 1: a B and I mean, it doesn't really have a
Speaker 1: way that I could that I know, and I don't
Speaker 1: know where the company is in that way, but I
Speaker 1: do drink it spear but but the but the uh,
Speaker 1: But I don't I don't understand the way that A
Speaker 1: B Inves could possibly have baked into its business model
Speaker 1: that it is doing well for people or the planet
Speaker 1: or whatever, um, because basically it's you know, it's selling
Speaker 1: us drinks. I mean, UM, that's the business model. More
Speaker 1: itsells that, the better it's going to do. It's you know,
Speaker 1: the climate change stuff is a nice to have rather
Speaker 1: than it must have in terms of its business model.
Speaker 1: So that's not responsible innovation in your view, right, you know,
Speaker 1: it's it's trying to be responsed. But our argument with
Speaker 1: this book is that if you want to create a
Speaker 1: company or run a company that UM is sustainably going
Speaker 1: to be responsible UM over the long run, it has
Speaker 1: to have a business model that actually supports that and
Speaker 1: not not just we call it in the book, there's
Speaker 1: there's two aspects of responsible innovation we call mindset and mechanism.
Speaker 1: And mindset is great. Lots of companies in the mindset
Speaker 1: we want to do better, we want to do good,
Speaker 1: you know, we're to stakeholders, all this kind of stuff.
Speaker 1: But if they don't pair the mindset with a mechanism
Speaker 1: that supports it, the first time there's some pressure on
Speaker 1: profits or something goes awry, they're going to abandon that mindset.
Speaker 1: And the only way to make that sure that those
Speaker 1: UM that happens over the long run is if those
Speaker 1: two things are inextricably linked. Right, And I know you
Speaker 1: you you talk about key consequence indicators casey eyes as
Speaker 1: a way to kind of keep track of it. Hey,
Speaker 1: just unfortunately got about forty seconds or so. How do
Speaker 1: you deal with a tough issue like inequality? And we'll
Speaker 1: have to have you come back and talk more, but
Speaker 1: how do you deal with something like that? You know again,
Speaker 1: you know, um, there's there's one. It's one thing. If
Speaker 1: you're talking about inequality and hiring practices and all, again,
Speaker 1: that's not baked into the business model. That's having a
Speaker 1: nice mindset of like we want to do this. You know,
Speaker 1: even something like I just mentioned like city Block for instance,
Speaker 1: which is trying to help healthcare inequality by helping people
Speaker 1: get healthcare who can't afford it, building a good business
Speaker 1: on that. That's a way to actually help with inequality. Well,
Speaker 1: let's continue this in the future. Kevin Maney, thank you
Speaker 1: so much. Founding partner Category Design Advisors. The book Intended
Speaker 1: Consequences How to build market leading Companies with Responsible Innovation