Increasingly businesses are coming under pressure from governments and/or customers and other general members of the public to operate to high standards of environmental and social governance. (ESG). Some do this well, some are still in the process of developing their strategies while others seem to treat it as something of a box ticking exercise. In some cases, it gets taken over by the Woke agenda and becomes a rather self-defeating exercise in emphasising minority rights when there are simply much better ways of managing these. For some all this seems to be relatively new, but it really isn’t. Some companies have been working to these high standards for many years, but particularly those that are privately held and not answerable to public shareholders.

I cut my teeth some 50 years ago at Procter & Gamble, probably then the best developer of management talent in the sales and marketing area (and perhaps they still are). After getting these skills under my belt I then did what many of my colleagues have done before and were to do again which was to make the trek from Gosforth in the North-East of England to Melton Mowbray in the Midlands where Pedigree Petfoods, a subsidiary of the Mars Corporation, was based. In the process I doubled my salary. Mars was then and still remains one of the largest privately held corporations in the world and it is not just its size, but it is one of the most successful by just about any measure you can make. Its philosophy was then and still is to promote mutuality of interest, that is the interest of all stakeholder parties not just to shareholders but also employees, which in Mars are referred to as Associates, to customers, to suppliers and to members of the community where Mars businesses are based.

This philosophy has been adapted and extended to include Five Principles of which mutuality of benefit to their stakeholders is just one. The Five Principles form the foundation of how they do business today and every day. With over 140,000 Mars Associates working in 80 countries around the world, clear direction and a moral compass is seen as essential. The long-term future of their business and indeed the planet on which we all dwell depends on them to stand for more and take bold action. They say that that is why they take every opportunity to make a positive impact in this ever-changing world by leveraging their guiding philosophy that has always differentiated them - the Five Principles.

They put the Five Principles at the centre of every decision they make. This means:

They know that what they do is only as good as how they do it, and their actions help them build a better world for generations to come.

To expand briefly on these Five Principles:
  
Quality:  They say that the consumer is their boss, quality is their work and value for money is their goal.
Responsibility: As individuals, they demand total responsibility from themselves; as Associates, they support the responsibilities of others.
Mutuality: A mutual benefit is a shared benefit; a shared benefit will endure.
Efficiency: They use resources to the full, waste nothing and do only what they can do best.
Freedom: They need freedom to shape their future; they need profit to remain free.

Their Structure – Why Their Freedom Matters. Mars is one of the world’s largest privately owned corporations, and it’s a deliberate choice. Many other companies began as Mars did, but as they grew larger and required new sources of funds, they sold stocks or incurred restrictive debt to fuel their business. To extend their growth, they exchanged a portion of their freedom. Mars believes growth and prosperity can be achieved another way.

Their Strategy – The Role of Profit. The freedom of Mars depends on the creation of profit. Because Mars is profitable and generates cash, they need not borrow money to the extent that they might lose control over their affairs. As long as Mars remains free, their wellbeing always can come before any other financial priority. Together, these give them the ability to build their business and continue to make a difference through their work. They say that every Associate’s commitment to Mars must be the same as the family’s commitment: to see their principles work for everyone’s benefit inside and outside their business. To this end, a substantial portion of operating profit is reinvested each year. This profit then provides the cash with which they can build and upgrade plants, enter new markets, invest in R&D, innovate and implement new ways of doing things, acquire new businesses and create strategic alliances, all to maintain their competitive position.

Their Plan – Future Growth. If Mars continues to create sufficient profits, they will be free to operate the business in the way they regard as best. As Mars grows, they weigh decisions about their diversification with great care, wanting to enter only those businesses and markets where they may excel.

Their Operating Structure – Private Ownership. Private ownership allows Mars to remain free. The nature of freedom demands that it be used responsibly by Associates and units alike. That way of doing business allows them to remain free as a company and gives Associates as individuals the freedom to innovate, act and grow while achieving their common goals. This creates a kind of environment in which they are all excited to work. Their private ownership, unanimity of purpose and high ethical standards allow them to move quickly in exploring new ground, act boldly in the face of competition, and take risks wherever they are justified. Above all, their private ownership gives them the freedom to take a long-term perspective for making investments, building businesses and providing for the well-being of their Associates. This spirit has driven Mars in the past. It remains for each of them to make it the guiding force for their future. 
 
Last week I attended a luncheon to celebrate the life of a great friend and indeed a great marketer, Peter Mitchell. I had known Peter for the best part of 40 years initially through the Marketing Society and later as colleagues. When we first got to know each other, we quite soon discovered that we had both started with a similar career path although he was some years older than me. He also began at Procter & Gamble where he was a highly successful brand manager at a very early age, later managing two of their power brands, Fairy Liquid and Daz. Like me he cashed in on this early training and success by moving to Pedigree Petfoods where he continued to do great things. He went on to have a highly successful career in a variety of businesses, but his most significant role was as the head of marketing worldwide for Guinness.

At that time he was the influence behind the foundation of the Portman Group.[i] This was a group initially of six major drinks companies which has grown to several more. Their role is to ensure that their products are marketed in an ethical way, discouraging alcoholic abuse. They have had many successes in restricting inappropriate branding and even products in the field. I have no doubt that in having a strong influence over a major industry Peter himself was strongly influenced by his early experiences at Mars where that kind of thinking would have been driven into him by the founders and leaders of the business.

Source: https://www.mars.com/about/five-principles

NB,. I posted this blog on 15^th October 2022, the 40th anniversary of my engagement to my wife. We met and married when I was working in Chile as the first General Manager of a Mars marketing company in South America.

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