Business people have a calling to be part of building and transforming nations. IN the article below, David Skews points us to the need to re-evaluate our attitudes to doing business. For some of us that will mean learning to do business on the other side of the coin. Read on, these are definitely thoughts worth chewing on.
DOING BUSINESS THE OTHER SIDE OF THE COIN
Chief Executive Officer of EDP, David Skews has recently published the following article on Corporate Responsibility and how company values are connected to the bottom line, despite many business leaders believing otherwise.
In recent months we have all seen confidence eroded in organisations as diverse as the Banks to the House of Commons. Businesses have been driven for decades by the hunger to increase their share price through cost reductions and fighting for market share by reducing prices. This has led to the diminution of traditional British businesses with the loss of jobs and a switch to a service economy. The City of London has grown fat on bonuses that did nothing to sustain employment, individuals like Madhoff allegedly earned millions by playing on investors’ desire to earn an extra buck.
In the wake of this economic turbulence the time seems right to reconsider the most basic assumptions that underlie our response to the question, “why does a business exist?” We need to question the supposed criteria for success that the ‘market is king’ and that business is all about increasing shareholder value.
I see a whole new paradigm around doing business – a paradigm that sits uncomfortably with the leaders of many organisations, whether they are SMEs, Multinationals or Public Sector organisations.
In many respects, this paradigm supersedes widely held views that businesses have to be structured and operated with the sole goal of maximising financial profit. Instead, it sees profit, in the form of monetary surpluses or shareholder value, as the reward – almost a by-product – of delivering against your promises – namely producing great products and delivering great services that build a better world. It is a simple thesis, yet at the same time truly profound.
What we are proposing is not merely a new set of buzzwords that sound right but which in reality represent little more than a cosmetic makeover of the same selfish commercial drivers. Even the term Corporate Social Responsibility (CSR) can fall into this category. Although the term suggests that corporations have a responsibility to deliver benefit to the societies in which they operate, in reality it is viewed by many organisations simply as the latest marketing gimmick. As a result, the term loses credibility with the general population. Our new paradigm for business is far more than the latest fad. It focuses the effort of the whole organisation on the goal of unleashing Values back into the business community.
CSR, when rightly understood, is about more than “charity at work”, though it includes that. It is even more than doing business in an ethical way, though it also includes that. It is about transforming the way we do business in emerging global and local markets. It is a complete re-think about how businesses manage costs, increase revenues and retain staff by pursuing the principle of ‘Building a Better World’. It is about aligning Visions, Values and Behaviours with the expectations of ALL stakeholders – not only investors and customers. It demands a new accountability for managing social, environmental, economic and even spiritual impacts in a way that maximises the benefits and minimises the downsides.
The new paradigm is about more than getting people to work for you. It’s about attracting, winning and keeping the RIGHT people in the RIGHT places with the RIGHT motivation to build your business for the benefit of this generation and the next.
Smart companies are already on the march. We are already seeing the focus shift for many organisations.
One of the biggest mistakes any business leader can make is to believe that values are disconnected from the bottom line. Another mistake is to think that merely adopting “good business practice” will protect against a severe roasting.
It is difficult to represent the benefits that accrue from strong values in the financial balance sheet, but it is nonetheless true that neglecting values can completely wipe out your balance sheet. Strong ethics keep corporations healthy. Weak ethics make companies sick.
In a difficult economic environment, the challenge is to re-evaluate our attitudes to doing business and for some of us that will mean learning to do business on the other side of the coin.