Your Company Will Save the World!
Right before I left for my Caribbean cruise earlier this month, I grabbed some magazines piled high on my office desk and stuffed them into my briefcase. I figured with all that potential free time at sea, I could get caught up on reading about the latest Big Ideas in business.
I then proceeded directly to my awesome vacation and promptly ignored that heavy briefcase. Which was the appropriate thing to do, of course. However, by day five of my empty-headed junket, I was ready to engage my mind. After applying one more round of sun screen, I reached down from my sunny lounge chair on the deck and pulled a random issue of Harvard Business Review from my briefcase stash, turned to the cover story and started reading.
The first few lines were like a smack up the side of my sunburned head. The essay was called, "How to Fix Capitalism," by famous Harvard Business School Professor and strategy guru, Michael Porter, and he opens with this bleak assessment: Business is increasingly viewed as a major cause of social, environmental and economic problems. Ouch.
He's right. Levels of public trust in business have fallen to all-time lows, probably not seen since, oh, I don’t know, maybe medieval feudalism? Instead, Porter suggests, the perception out there is that business prospers at the expense of the broader community. For most companies, this reality is driven by the short-term quest to please investors with ever-increasing profits.
Unfortunately, a mindset of tradeoffs is embedded in business today, making it a zero-sum game. In order to keep the profit machine spinning, we must keep chipping away at the non-essentials—through layoffs, slashing benefits, outsourcing, off-shoring, taking environmental and safety shortcuts—while fattening shareholder wallets in the process. The government is then forced to step in and police business activity through burdensome policy and regulation, which ends up hurting business even more. It’s a vicious cycle.
Porter has had enough, and thinks that capitalism is ready for a transformation—a full-fledged overhaul. His proposal: Companies must take the lead in bringing business and society back together through a concept he calls “Shared Value.” In this model, business creates economic value in a way that also creates value for society by addressing its very needs and challenges. This approach, he says, will in turn reward the company with long-term success.
In essence, Porter suggests that rather than driving profits, at the heart of corporate America should be a compelling intention for social progress: to reduce poverty and hunger, say, or to enhance the health and well being of employees or of a third world country; to replenish natural resources or reduce environmental impact. He uses examples of Walmart, Wells Fargo, Intel and IBM, all of whom have developed serious initiatives that reconceive the intersection between society and corporate performance. Intel and IBM are both coming up with ways to help utilities economize on power usage. Wells Fargo has developed a set of tools that help customers budget and pay down debt. Walmart has cut 100 million miles from its trucks' delivery routes, lowering carbon emissions significantly.
Porter is on to something big, no doubt. But I am afraid he is missing something. Throughout the article, he barely mentions the role of leaders and managers in all of this. How can society be transformed for the better without the surefooted resolve of trustworthy, intentional leaders at the helm?
Porter calls for "companies" to take the lead in mending society’s ills, but a company in and of itself does not have a soul or a spirit or a moral center to take such a stand, does it? A company is nothing more than a legal entity designed to organize activities and get stuff done within a framework of an economic, governmental and legal system. But it is the people within the company who will dream up and execute on those choices for the greater good.
This level of transformation can only come from individual leaders who are filled with purpose and intent, and who possess, dare I say, a certain level of spiritual self-awareness. Those who are clear about their own convictions and values will then manifest these beliefs through the work they are doing, influencing and inspiring others along the way. Without spiritually intentional leaders, we are left with nothing more than a corporate shell.
Capitalism in and of itself can’t save society. Only people can – leaders who have the capacity for compassion and love and the ability to envision a purpose for their lives that transcends the upcoming quarterly financial statement.
Perhaps we should concentrate on fixing that first.