The Mars Mutuality Journey

Paul S. Michaels

President of Mars, Incorporated

Mars, Incorporated was founded with the concept of Mutuality at the core of its culture. In 1947, Forrest E. Mars, Sr. wrote a letter to staff setting out this philosophy. This note has provided inspiration to Mars and its Associates ever since. It laid out the belief that the objective of Mars, Incorporated is the promotion of ‘a mutuality of service and benefits’ across the entire range of stakeholders – from consumers, distributors, competitors, suppliers, governmental bodies, employees and shareholders – through the manufacturing and distribution of our products.

This represented radical corporate thinking at a time when turning a profit was commonly regarded as sufficient reason for being and shareholder benefit was the only focus. And while the business and global landscape might have shifted since 1947 beyond all recognition, the principle of Mutuality remains core to the Mars culture, sitting alongside Quality, Responsibility, Efficiency and Freedom as the Five Principles that guide everything the business does.

“Of course, discussion of principles is all very well but, ultimately, our success will be judged by the tangible, enduring benefits we create where it really matters – for people and the planet”

What Mutuality looks like at Mars has evolved based on the needs of our stakeholders, however at its most basic and constant level it refers to the promotion of enduring ‘win-win’ scenarios in all manner of relationships that Mars has with all stakeholders (including the planet). One practical example of this approach might be the procurement of services from a supplier at a fair market price, which neither undercuts the supplier (reducing their profitability) nor passes on unnecessary cost increases to the consumer. Of course, mutual benefits are not always financial in nature. They also relate to societal or environmental impacts, such as supporting Associate engagement and work/ life balance through the adoption of flexible working practices; or reducing our impact on the environment by eliminating our fossil fuel energy use and greenhouse gas emissions, minimising our impact on water quality and availability, and mitigating the impacts of waste creation – what we call becoming ‘Sustainable in a Generation’ at our sites. We believe that our responsible growth gives us the opportunity to amplify our positive impact throughout our value chain. As a family-owned business with a long-term outlook we have an enviable degree of freedom to explore and deliver against this agenda.

Today, the business that Forrest E. Mars, Sr. helped to shape has grown to become one of the largest and most successful food manufacturers in the world, employing more than 72,000 Associates in 74 countries. We have 11 billion-dollar brands in categories including Petcare, Chocolate, Gum and Confections, Food and Drinks. This growth wouldn’t have been possible without an enduring belief in our Five Principles, and especially the principle of Mutuality that Forrest introduced.

Of course, discussion of principles is all very well but, ultimately, our success will be judged by the tangible, enduring benefits we create where it really matters – for people and the planet. In this regard, the board and management team are committed to assessing not only how the business is performing financially, but also how the business is performing when it comes to creating a mutuality of benefits. This is work in progress, but as we learn more, we are finding different and important ways to deliver on this objective.

I’m pleased to say that we have many examples of creating Mutuality across the business, from the smallholder cocoa farmers of Côte d’Ivoire, to the stretch targets we have set to make our operations ‘Sustainable in a Generation’, to leveraging our expertise in science to address food safety challenges in developing and developed geographies.

An interesting example of Mutuality in action can be found in our Russian business. Back in 1998, Russia defaulted on its foreign debt and the Rouble crashed. Overnight, the entire economy came to a grinding halt. Our whole customer base stopped ordering our products. They had no money to pay us. Instead of pulling out, we gave our customers a lifeline offering them product that they did not have to pay for until they in turn sold it. This saved many of them from bankruptcy and allowed them to continue to operate in uncertain times. This unusual response ensured that we, together with our customers, were in a position to thrive following the crisis while many others had closed their doors.

More recently, in 2010, Mars, Incorporated was lead partner in an ‘uncommon collaboration’ project with stakeholders including IBM, which successfully mapped the cocoa genome and then made the data publicly available on the internet for the benefit of the academic, business and cocoa farming communities. Of course, as one of the world’s largest consumers of cocoa, Mars has a vested economic interest in the future stewardship of the cocoa farming industry. But, the way we see it, open sharing of this knowledge for the benefit of all cocoa farmers, all industry players, all governments dependent upon cocoa for revenue, and the whole sector will accelerate the increase of cocoa yields which in the end will create mutual benefits for Mars and these other stakeholders.

Mutuality helps define the standard that we must strive for with all our business activities and our sustainability efforts. We must be mutual to all people in our value chain and to the planet. For many materials, certification is a first step in this direction and we have made a number of ambitious commitments – many of them industry firsts, such as sourcing 100 per cent of raw ingredients, including cocoa, coffee, fish, palm oil and tea, from certified sustainable sources by 2020. This demonstrates Mutuality as we are ensuring that we prioritise and reward those farmers and suppliers producing commodities more sustainably.

Newer for Mars is our focus on leveraging our iconic brands as catalysts of behaviour change and awareness on issues. We call this approach ‘Doing Good Marketing’. Examples include Whiskas’ Big Cat Little Cat WWF tiger conservation partnership, and the Pedigree Dog Adoption Drive. It is our ambition to identify opportunities to create cause-related marketing that is at least as effective as more traditional marketing strategies, delivering a mutuality of benefits both to our brand equity, our non-profit partners – and in the case of Whiskas and Pedigree – endangered wild cats, and shelter dogs that need a home.

In all of these examples, it is our Associates that are bringing Mutuality to life – whether they work in a factory, create marketing campaigns, or explore new technologies that will help deliver affordable nutrition. Across the organisation, our Associates have a tremendous appetite to deliver shared benefits. One of our jobs as an organization is to enable and recognise their efforts. Our Mars Volunteer Programme (MVP) offers all Associates an opportunity to give something back to the communities where they live, work and do business with paid time off. At the end of 2012, nearly 12,500 Associates from across the global business had invested around 50,000 hours in MVP volunteering projects. I’m proud to say, as of the writing of this, we had a 32 per cent increase in the number of Associates that participated in 2013.

The economic, social and environmental landscape has changed dramatically since Forrest E. Mars, Sr. wrote his letter in 1947. Yet his belief that a principled business can be a financial success, and a powerful force for meaningful change in a challenging world is more relevant than ever – and more difficult to operationalise. For seventy years, Mars and its Associates have worked to deliver on the promise of Mutuality, not always perfectly, but with a steadfast commitment and sense of pride.

Despite our adherence to an economic model that differs significantly from the classic corporate model, we have – by any traditional standard of performance – become a very successful company. Indeed, aspiring to Forrest’s vision has driven our market resilience and helped us thrive through a century of change.

We believe that by continually improving how we deliver Mutuality in all that we do, we can deliver sustainable growth for generations to come and, hopefully, encourage others to join us on the journey.