After experiencing the effects of a Kraft Heinz Co. takeover bid for Unilever for more than $ 143 billion, a company I worked for and have worked with for a very long time, the book “The Evolution of Cooperation” by Robert Axelrod, caught my eye. In was a surprising read because I never expected to find wisdom on how to choose better strategies for succeeding in business by reading a book dedicated to a computer game called the prisoner’s dilemma.
Robert Axelrod writes: “We all know that people are not angels, and they tend to look after themselves and their own first. Yet we also know that cooperation does occur and that our success as a civilization and very often as a business is based on it.”
The book focuses on how individuals pursuing their own interests adapt their behaviors to become more cooperative because they are rewarded more by cooperating and applying nice strategies. Axelrod derived his findings from analyzing the results of tournaments in which the best and brightest strategists, evolutionary biologists, and psychologists compete for points playing the famous Prisoner’s Dilemma game (see the video for game explanation). What became evident was that players choosing to apply nice or cooperative strategies rather than greedy and exploitive strategies nearly always won. Even more surprising to me was that for cooperation to emerge as a winning strategy neither foresight, friendship nor the care for others was required.
For someone like me who has built a B-Corp business with others, and who has worked with some of the biggest and most cooperative companies in the world, companies like Unilever, The Coca-Cola Company, Danone and Visa this book was a great reminder of how “being good and cooperative can be great strategy for doing well.
I am sure that this might seem less obvious right now for many of my ex-Unilever colleagues, customers and friends, so I thought it would be good to share some of the advice Robert Axelrod provides to those who seek to promote a culture of cooperation in business.
His advice is:
- enlarge the shadow of the future
- teach people to care about each other
- don’t let them get away with it
- improve recognition abilities
- Enlarge the shadow of the future
The first piece of advice the game results teach us is that mutual cooperation is best promoted if the future is sufficiently important relative to the present. The challenge to cooperation is that a future move might never happen and people typically prefer a given benefit today, rather than having to wait for the same benefit until tomorrow. This is what the sharks of 3G would like the Unilever investors to believe. The 3G strategies for growth is through ever larger acquisitions and then cutting cost, firing people, optimizing tax and generating fast cash for more acquisitions.
Paul Polman, the CEO of Unilever rightly asks: “How long can you do that before a Ponzi scheme stops?” Polman argues that cutting costs is comparatively simple, that anyone can “take out one-third of the people. That’s not really skilled management.” He notes that Unilever’s sales are growing steadily, while at Kraft Heinz they’re flat or down.
Robert Axelrod advises making interaction more durable, and clearly, Paul Polmand is aware of this. He is focused on making interactions more durable by aligning himself with more long-term investors and stakeholders.
- Teach people to care about others
Axelrod suggests promoting cooperation in a society and in business to teach people to care about the welfare of others. Unilever has excelled here and we at Innate Motion have worked hard with many Unilever teams to enable deeper empathy for the people they serve, developing a people immersions process to bring down the barriers between the manager strategist and the people they serve who happen to be consumers. Innate Motion helped Unilever design a way of marketing that puts people and purpose at the heart of every brand so we are well aware that Unilever teaches people to care about others.
- Teach reciprocity, don’t let the exploiters get away with it.
Axelrod also advises us to teach reciprocity. This one caught me by surprise. The most widely accepted moral standard is the Golden Rule: do unto others as you would have them do unto you. In the context of the Prisoner’s Dilemma, the Golden Rule would seem to imply that you should always be nice and cooperative since cooperation is what you want from the other player. This interpretation suggests that the best strategy of unconditional cooperation is better than the ‘winning’ strategy of ‘tit for tat’. The problem with this view is that turning the other cheek provides an incentive for the other player to exploit you and others in the future. Unconditional cooperation can not only hurt you, but it can hurt other innocent bystanders with whom the successful exploiters will interact later.
What is being suggested here is that we must not let the exploiters, the billionaires of 3G, continue to get away with their exploitive strategies. I think we as the billion-strong consumers have to play our part. Let’s choose products from the stakeholder capitalist. Maybe Paul Polman should turn around and actually buy Kraft Heinz and make them a more cooperative company. This is very unlikely, but wouldn’t that be great?
I actually do believe that Unilever has the necessary scale and success to change some of the exploitive practices of shareholder capitalism. Unilever must make sure that the 3G billionaires actually fail in their hostile attempts so that the future of stakeholder capitalism emerges with a stronger desire for cooperation has the opportunity to thrive.
- Improve recognition abilities
The recommendation Axelrod gives to promote more cooperation is to improve our ability to recognize the other players and to expose their identities and past behaviors. Here the internet and social media’s ability to drive more transparency is an asset. In a world of ever-present tracking in real time, the internet and social media can be a real driver of change.
Robert Axelrod concludes: “promoting good outcomes is not just a matter of lecturing the players about the fact that there is more to be gained from mutual cooperation than mutual defections. It is also a matter of shaping the characteristics of the interaction so that over the long run there can be a stable evolution of cooperation and mutual benefit.
Personally, I feel Unilever has worked hard at helping shape such an environment, although their CEO Paul Polman has done a lot of preaching too. Hence I feel the sharks of 3G will not succeed and I do hope that Unilever can make Feel-Good Capitalism Work. As the article in Bloomberg business week states “if Unilever Can’t Make Feel-Good Capitalism Work, Who Can?”.