Friday 28th October 2016                 Change text size:

21st century leadership: from business as usual to business as a force for good

Photo: andi braun via stock.xchng

Michael Solomon explains why ‘business as usual’ is a self-perpetuating, systemic failure, how business can become a force for good in the world, and the conditions and tools required to transition from one to the other.

Business is not evil per se. But it sure as hell acts like it with depressing regularity.

This is because of how businesses are programmed and the failures of market capitalism. Consider the following: it is often legal to offload costs onto society and the environment; it is often legal to take advantage of stakeholders (such as consumers, employees, suppliers); it is often highly profitable to offload costs and take advantage of stakeholders; there are always businesses with fewer scruples which will happily operate in these ways to increase their market share.

These four statements are neither controversial nor far-fetched. They are observations, perhaps even self-evident truths. They are the reasons why, inevitably, profit always comes first and the interests of people and planet come second.

This ‘business as usual’ is a systemic failure for which no single entity is to blame. Nonetheless, it is difficult to acknowledge. It is certainly easier for businesses to focus on good news stories and on the positive impacts they may have, rather than on the negatives.

However, by selectively highlighting its positive impacts while failing to acknowledge or discuss the whole picture, business has lost public trust. Too often, businesses appear to say one thing but do another. They give the impression of arrogance, duplicity or of simply not caring. It makes the public cynical of business and sceptical of its willingness and ability to change. It also removes critical incentives for the public to seek out and support responsible businesses and thus for companies to seek to be that choice.

The world is rapidly changing

In reality, many companies do care and are aware of how far and how fast the world is changing. Against a backdrop of climate change, the depletion of natural resources, faltering prosperity and a widening wealth gap, impetus is building. Real change is now possible through the emergence and interplay of powerful forces.

For example, in the internet age, business behaviours are more visible and challengeable than ever; trust, brand and reputation are increasingly critical and are determined by how a business behaves; new tools (including Responsible 100) provide new opportunities for businesses to have more positive impacts, and fewer negative impacts, on the world around us; and people’s expectations are changing – they expect business to provide solutions to the challenges we face, not remain part of the problem.

These forces are changing old paradigms and rewriting old rules. Today, business as usual is still the main game in town. But make no mistake, the revolution has started and leading businesses are beginning to redefine success for the 21st century.

Business as a force for good

Business will reprogramme itself to do good, to serve people and planet, when remaining profitable demands it.

The pursuit of profit influences business, and the world around us, like nothing else. And as profitability and responsibility become increasingly aligned, business will realise its huge potential to make the world a better place.

Responsible 100 is a simple, powerful, flexible tool for any business that is committed to balancing its own interests with everyone else’s. It defines responsibility in terms of a business’s willingness and ability to demonstrate transparency and accountability on a range of social, environmental and ethical issues. It does not publish a checklist of required attributes or values nor require a minimum Responsible 100 score. Instead, it simply requires openness and honesty, that a business can publicly justify all its actions.

Listing on www.responsible and offering up policy and practice details – guaranteed as accurate, complete and verifiable – for public scrutiny, comment and rating requires businesses to balance their pursuit of profit with the interests of society. It is a challenging ask, but both reasonable and achievable.

We foresee – and are working to help create – a race to the top. That is, conditions by which businesses can compete on the ambition and impact of their social and environmental innovations as well as on price and quality. Responsible 100 enables and showcases companies making the transition from business as usual. Those companies that recognise and welcome an opportunity to prove their commitment to serve and to help people live better lives in a better world.

Michael Solomon is the founder and CEO of Responsible 100, a unique initiative and a growing movement made up of businesses, civil society organisations and individuals.

Further reading:

Success means seeing ourselves as part of the bigger system

Has CSR reached its sell-by date?

The business case for sustainability – an exceptional Forum for the Future event

What gets measured gets managed: sustainability in 21st century business

The Guide to Corporate Social Responsibility 2013

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