Why Corporate Social Responsibility is not enough.

‘The purpose of business is business’’

Milton Friedman (1962)

In the last 20 years income inequality has risen with household wealth of the top 10 per cent of society now more than 100 times the wealth of the poorest 10 per cent;  The major institutions, such as central government and banks have been found wanting; trust is at an all time low and financial institutions are seen as a key part of the collapse.  The big government institutions of the post war era seem unable to work; the NHS, Social Services and Benefits seem are political hot potatoes.  There is a growing need for change in the world.

The neat divisions of public, private and third sector are falling away.  Charities are filling the gap left by failing public services.  The demographics of society are shifting as the ageing population become simultaneously more dependant and more socially active; with the availability of time, ability and a pension.  Young people, saddled with student debt and no hope of home ownership remain living with their parents, insecure and frustrated, with diminished job prospects. 

Social media hold individuals and governments to account; this rise of the ‘connected society’ drives the need for better conversation rather than state control.  In this era of fiscal austerity, the moral volume is turned up.

To date some organisations have responded through Corporate Social Responsibility initiatives, each with a laudable purpose and demonstrating how organisations can improve their world.  In the new world order this is no longer enough.  Organisations are being challenged to rethink their essential purpose.  The narrowness of self interest and share holder value replaced with a wider social activism and moral purpose.

Corporate Social Responsibility is no longer relevant and instead is replaced with a new understanding of the world that drives the moral and social purpose of an organisation.  No longer is it enough to focus on our customers; it is about recognising the wider number of lives that we touch.

From customers to the lives we touch; from transactions to relationships;  from shareholder value to societal value; from short term profit to sustainable profit; from high street presence to community asset; from wealth creation to creation of the common wealth.

How will institutions redefine their role in rebuilding community, stimulating social activism and engagement for the next 100 years.

‘The purpose of business is to create shared value’

Michael Porter 2011

---

Ernst &Young and 2020 PST, ‘The Deficit: A Longer Term View’ (2020 PST: 2010)

Jesse Norman MP, ‘Patterns of Attachment’ (RSA Journal: Spring  2011)

Leadership and the importance of history

I recently had the privilege of working at Windsor Castle, which was an amazing experience and a memorable setting. As chance would have it we were there on the 11th November and broke off from our labours to commemorate the fallen from two World Wars and recent conflicts. I also took the opportunity to wander around St George’s Chapel, established by Henry III in the 14th Century and the burial place of Henry VIII and Jane Seymour, it is also home to the Knights of the Garter, the world’s oldest chivalric order.

The richness of the history and traditions was inescapable and given added poignancy on Armistice Day. What, however, has this to do with leadership and senior teams? What struck me most deeply was the way in which each previous generation of royalty built upon the legacy of the past; each leaving great monuments that testify to their ambition, which, at times, was wildly disproportionate to what was needed or was reasonable.

I wonder what enduring legacy the leaders of today will leave for future generations? Sadly our environmental legacy will be a permanent scar for our children and one which they will only look at in amazement at our naivety and lack of courage to act. The short termism of driving shareholder value has shown to distort the market and corrupt the judgement of good people. Whilst we are gripped by the fear of recession there is a danger that we do not think about the bigger issues of ‘what is our legacy?’

The history and traditions on display at Windsor is a great reminder of the importance of the past and it challenges me to think about how senior teams recognise and learn from the past as well as think about the legacy that they leave for the future. Finally I like the quote from Zhou Enlai, the former Chinese leader from 1949 to 1976, who when asked about his thoughts on the French Revolution of 1789 he replied ‘it is too early to tell’. Maybe we need to start to challenge senior teams to shift their time line so that they can acknowledge the past as well as think seriously about their enduring legacy.