A System in Transition

At its best, a business turns ideas into better lives: for the people who work in it, the places that host it, and the people who own it. Does it exist to serve its shareholders, or the people and places it depends on? For most of business history, that wasn’t a radical question: the honest answer was some version of both. That started to change in the second half of the twentieth century, when a simpler idea gained influence: a company’s only real job is to maximise shareholder return.

Milton Friedman gave it a slogan in 1970: “the social responsibility of business is to increase its profits”. The decades since built the infrastructure to match, with deregulated capital markets, a wave of globalisation and steadily weaker checks on monopoly power. This model has done real things well. It has helped fund decades of medical and technological progress that have measurably extended lifespans and improved access to education and quality of life for billions of people. None of it required new company law. The basic template most businesses still run on today, built on shareholders, limited liability and a board answerable chiefly to them, has barely changed since the 1850s.

What has changed is the influence and reach of one version of that template. American tech didn’t just build products. It exported a model of entrepreneurship. The venture-capital playbook that grew out of Silicon Valley became the perceived default operating system for entrepreneurship almost everywhere. Yet rarely commented upon is the fact that much of what it commercialised was initially publicly funded. As Melanie Rieback notes, echoing economist Mariana Mazzucato’s research: the government & taxpayer is “the world’s largest VC, but we are socialising the costs and privatising the benefits.” This raises important design questions about how public investment, private innovation and the distribution of value relate to one another.

As this model of business became more influential, the public, charitable and social sectors increasingly found themselves addressing the resultant and growing social and environmental costs. Over the last 25 years a different possibility has begun to take shape. What if a business didn’t extract from people and place in the first place, but was designed, from the outset, to help them thrive? Recent decades have produced real attempts at an answer: B Corps, ESG, Impact Investment. Many of these initiatives have expanded our understanding of what business is for. Yet most have worked primarily within the existing model rather than redesigning it.

Things seem to be shifting now, for reasons more practical than ideological: a generation of founders with different assumptions, a wave of business owners approaching retirement, and a public far less patient with concentrated ownership than a decade ago.

Stories of three UK breweries make this more concrete. BrewDog illustrates how different forms of capital create different incentives and outcomes. It arrived in the late 2000s as a genuine disruptor to a market of dull global lagers: irreverent, experimental, alive. But as investment poured in and growth accelerated, it began to resemble the incumbents it had once disrupted: fast, leveraged, and disconnected from the soil it grew from. In March 2026 it collapsed into a pre-packaged administration, selling its UK operations for £33m. That’s a fraction of the £213m a private equity investor had put in nine years earlier, on preference shares carrying an 18% compounding return that by then exceeded the whole business’s value. The 200,000-plus ordinary investors who’d crowdfunded its early growth got nothing because of the low status their shares occupied in the capital priority list.

Adnams, brewing in Suffolk since 1872, has taken a different, contrasting route: patient, embedded in its region, with decades spent on local farmers and soil health rather than valuation. Toast Ale, newer still, strengthens its circular food-waste purpose with mission protection through its ownership and golden share structure, so that protecting its purpose doesn’t depend on its management’s good intentions holding under pressure.

Same industry, three different answers to the same underlying question: what is this business actually designed to do in the world, and for whom?

This isn’t about good or bad businesses. It’s about what a business is designed to reward, and that’s something decided somewhere deeper than strategy, culture or leadership. It's in the underlying architecture.

Ownership determines who ultimately holds power and financial return; governance determines how decisions get made and how accountability flows; capital determines what resources move, on what terms and over what timeframe. Together, these three form what we call the hidden architecture of a business: it quietly shapes behaviour, incentives and culture at every level, whether anyone designed it that way or not.

This framework draws from a growing body of work around designing organisations for wider social and ecological purpose, including E.F. Schumacher, Margaret Wheatley, Stafford Beer, Ricardo Semler, Marjorie Kelly and Kate Raworth (see Resources for more). Our contribution is to bring governance, ownership and capital together as a single design system: the hidden architecture through which purpose either slowly erodes or survives and thrives.

Despite its importance, there is little variation in how this architecture is usually designed. The same templates dominate, not because nothing else works, but because an ecosystem of support services is trained on that model, and nothing else is as easy, familiar or well-lit.

Good intentions aren't always enough. Often, the real tension lies between an organisation's stated purpose and what its default structures are designed to do. Most organisational design work responds to tensions like these by redesigning teams, roles and incentives. That's valuable, but it leaves the deeper architecture untouched.

This may feel like a new field, but it isn't uncharted territory, it's just not very visible to most founders and funders today. In Western purpose-led business, much of this work has been developing for decades, often alongside the mainstream. In other traditions, including Islamic finance, principles of risk-sharing, limits on extraction and wealth redistribution have been practised for centuries. The UK has a significant mutual sector of building societies, cooperative and mutual insurance companies, many employee-owned businesses like John Lewis and a strong history of purposeful businesses. This includes Quaker-founded firms like Cadbury, Rowntree and Clarks, whose owners built worker housing, healthcare and education into the business itself.

There are also myriad examples around the world. A nice example is SEKEM in Egypt, which has spent almost fifty years building an entire enterprise: organic and biodynamic farming, medicine, education and manufacturing. All of it rests on the same conviction, that business exists to serve people and land together, not one at the expense of the other. Buurtzorg's 14,000 self-managing nurses in the Netherlands and the 300-plus steward-owned companies in Europe recognised by the Purpose Foundation show these design choices working at real scale. The gap isn't proof of concept. It's visibility: beacons exist, but too few second and third adopters have found them yet.

This is where the real opportunity sits. Early-stage founders and investors who are designing ownership, governance and capital together from day one, rather than retrofitting them later, are working at exactly the level where change can last and ripple outwards.