It’s a Wicked world we’re living in

War, like biodiversity loss, mental health and others are wicked problems which are complex in nature and thus extremely difficult solve. Despite commitments across the world we are not be able to address climate change for example. What is going on?

Global warming is an issue that the world leaders unanimously agree upon as a priority (which is super rare) and yet the world is still unable to address effectively. For every unit of GDP growth - somewhere, something is burned or dug up from mother earth resulting in increased CO2 emissions and planetary boundaries being pushed towards their tipping points. Steering the global energy system to net-zero is an example of a wicked problem.

To address such issues effectively will require collaboration between academia, non-profits, companies, government, finance and citizens. We need a mission-driven approach to innovation and alternative enterprise design models that steer humanity towards a state of thriving – enabling companies to prioritise their impact over profits without sacrificing scalability.

Wicked have created this newsletter to support the development of the impact entrepreneurship field. We will share resources, insights, news and interviews focused on impact and especially covering topics related to enterprise design, impact tech and new economy.

• Enterprise Design: Enterprises can be designed to maximise their positive impact on the world in the long-term. This means embedding impact into business models and alternative ownership structures like steward-ownership, cooperatives, non-profits and others.

• Impact Technology: Science and research hold the keys to many solutions in the material world and can enable positive impact at scale. To secure a thriving future for humanity we need bring solutions out from the lab and into society.

• New Economy: We need an economic system that enables humanity to thrive, guaranteeing social foundations for all within the means of the living planet. Where money is not the be-all and end-all, but a means to an end.

Keep reading! But also make sure to subscribe for future issues ;)

Patagonia, Steward-Ownership and Exit to Non-profit

Patagonia, a company valued at around $3 billion according to the New York Times, have changed their enterprise design to effectively lock-in its purpose and ensure self-governance of the company in the long term.

In September 2022, Yvon Chouinard, founder of the legacy outdoor apparel company, announced a new ownership structure for his company. Chouinard and his family had held complete control of the company’s voting and non-voting stock since its founding 50 years earlier.

Now the family have transferred all of its ownership to two new entities, effectively making Earth its only shareholder. “If we have any hope of a thriving planet – much less a business – it is going to take all of us doing what we can with the resources we have. This is what we can do,” Chouinard says.

Here’s how the new ownership model works:

• Patagonia Purpose Trust now owns all the voting stock of the company (2% of the total stock) and exists to create a more permanent legal structure to lock-in Patagonia’s purpose and values

• Holdfast Collective owns all nonvoting stock (98% of the total stock) and it will use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities and fight the environmental crisis.

• Each year, profits not reinvested back into the business will be distributed by Patagonia as a dividend to Holdfast Collective. Estimated to be roughly $100 million depending on the health of the business.

There’s two really interesting things happening here in my opinion.

1. Steward-ownership

Patagonia’s new form of ownership is a great example of steward-ownership. They now join the likes of other household companies like Bosch (Germany), Carlsberg (Denmark), Signal (USA) and Novo Nordisk (Denmark) in implementing the proven steward-ownership model.

According to Purpose Foundation, steward-ownership is a corporate ownership structure that presents an alternative to shareholder value primacy. It ensures that companies prioritise their long-term purpose over short-term profits – by legally enshrining two principles:

1. Purpose-orientation: The company’s value as well as its profits cannot be extracted by shareholders. Instead, profits serve the purpose of the company and are either reinvested in the company, stakeholders, used to cover capital costs, or donated. The company is no longer an asset with the main purpose to create wealth for its shareholders (legally speaking) but is serving a purpose. Profits are not an end in itself, but a means to this purpose.

2. Self-governance: The control over the company – i.e. the majority of the voting rights – is always held by the people who are closely connected to the company, its operation, purpose and values. Voting rights are neither automatically inherited nor can they be speculated with and sold for financial gain of the shareholders. They are passed on from generation to generation of stewards not based on genetic relation or wealth but based on aligned abilities, values and familiarity with the company.

2. Exit to Non-Profit

Patagonia’s founders made an exit–as many tech entrepreneurs dream of–not by doing an IPO or being acquired, but rather by transferring their shares to a non-profit.

“Another path was to take the company public,” according to Chouinard, “what a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility. Instead of going public, you could say we’re going purpose.”

Impact entrepreneurs build startups in order to have a net positive impact on the world but many point out that scalability is an issue with alternative ownership structures like steward-ownership, non-profits and cooperatives. Startups need to scale solutions faster than their competitors in order to build their product and have a chance at survival in the long term. Also, problems like climate change need to be addressed quickly. You can see why building a non-profit from scratch doesn’t appeal to most impact entrepreneurs.

The Patagonia case signalled to me that a startup could be designed to scale up quickly as a profit-maximising business and then exit into a non-profit to serve its ultimate purpose in the long-term. The company could build upon this exit strategy from day 1 and communicate it to stakeholders and shareholders alike.

In essence, the “exit to non-profit” model enables a startup to optimise for scalability and growth in the short-term while securing its purpose for the long-term.

Sounds appealing. What do you think? Could we see more exit to non-profit in the future?

Wicked Community News

Global Donut Day

On Monday, November 13 Wicked organised Global Donut Day in Helsinki! Over 60 people braved the first snowfalls in Helsinki to share in the experience discussing and practicing the concrete steps to create a thriving future through regenerative and distributive enterprise design. Erinch Sahan, Business & Enterprise Design Lead at Doughnut Economics Action Lab (DEAL), joined us from Oxford for an hour-long roundtable discussion. Followed by a Doughnut Economics for Business workshop led by Jälleenrakentajat cooperative.

Great news in case you missed it… you can check out the first hour of the event with Erinch Sahan here 👉 on Wicked Community YouTube channel!

Thank you to our partners who made the event possible! 🙏 
DEAL, Lapinlahden Lähde, Jälleenrakentajat and DASH Coffee. As well as our supporting partners: Ashoka Nordic, Helsinki Incubators, Aaltoes, Rethinking Economics Finland, Waves Summit, Strategy for Future, Systems Change Finland, MiXi Center.

What’s cooking?! 🧑‍🍳

Run for Impact

Wicked Community is organising Run for Impact on December 2 – a 10k Charity Run with the goal of raising €10.000 for high-impact charities.

• When: December 2, 2023 from 11:00am-2:00pm

• Where: Helsinki, Finland near City Center

• Who can participate: Everyone is welcome! Walking or just drinking Glög also allowed

• Minimum donation to participate: €100 per runner… students and low-income at €50 per runner.

• Where is my money going?

  High-impact charities vetted by Giving What We Can charity research organisation. These are the charities you can donate to:
  - Center for Human-Compatible AI 
  - The Life You Can Save
  - Charity Entrepreneurship

How many days out of the year can you make a positive impact with every Step you take? This December 2nd you can, by joining us to Run for Impact! 🏃💥

👉 Register for Run for Impact here!

Join us on Telegram 🐇🪩

244 people from private, public, academia and third sectors…

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📩 We would love to hear from you! Share your feedback and submit news, announcements, events & opportunities, or anything else for the newsletter at wickedhelsinki@gmail.com !