In the decade since the
collapse of the Berlin Wall and the fall of communism, three billion consumers have joined the global market economy.
“When CNN came of age in the Gulf War it had eight million viewers outside the US, today that figure is 151 million,” says David Grayson, an expert on corporate social responsibility, who visited New Zealand as guest of TMP Worldwide Executive Search.
He continues to rattle off dramatic changes in our lives as the pace continues to quicken:
“A year’s worth of growth in the US economy in 1830 happens in single day.”
“All of the world trade in the whole of 1949 happens in single day.”
“The equivalent of all the science done in 1960 happens in one day.”
“All of the foreign exchange dealings around the world in 1970 happen in day.”
“All the telephone calls made around the world in 1984 happen in one day.”
“The equivalent of all the emails sent around the world in 1989 happens in one day.”
“Bill Gates says the Internet changes everything Ñ I think he may be under-estimating its significance.”
“In 1996 there were 60 million Internet users worldwide. At the beginning of this year there were 275 million, and by the year’s end this should be 475 million.”
“It’s changing the way we work, find work, learn, socialise, shop.”
Power to the people
But, information is also giving power to the people, and it’s power to make difference, Grayson says.
“Take the announcement at the beginning of March from Mitsubishi and the Mexican government that they are abandoning plans to build massive industrial salt plant at Laguna San Ignacio, the last undisturbed birthing and nursery grounds of the gray whale. The decision is victory for an international coalition of environmentalists, fishermen, scientists, and consumers that fought the saltworks with protest, negotiations and consumer actions. For me the key is that more than one million people sent petitions, letters and emails to Mitsubishi demanding they give up plans to industrialise Laguna San Ignacio. Others refused to buy Mitsubishi products.”
So the wired world may prove to be trip-wired for business, he suggests.
Heed the call
“I’m pro business but I believe business needs to heed the calls for change in how it operates,” says Grayson.
“Issues that were once called soft like the environment, diversity, human rights, health and wellbeing, community Ñ have become hard,” he says.
“They’re hard to ignore, hard to manage and very hard on business that gets them wrong. All over the world, the expectations of the way business behaves are changing and becoming more demanding.
“We all want products and services that are fit for their purpose and good value, but we’re also saying we expect businesses to behave responsibly.”
In the first ever global consumer survey on corporate social responsibility, 25,000 consumers in 23 countries, developed and developing on six continents, were asked last year about the changing role of companies.
This survey found people form their impressions of companies on corporate citizenship ahead of brand reputation or financial factors.
One in five consumers reported rewarding or punishing companies in the past year based on their perceived social performance.
Firms to feel proud of
Employees want good remuneration, good prospects, but increasingly they want to feel proud of the company they work for, says Grayson.
“Every organisation needs values, but lean organisation needs them even more.”
For the 75th anniversary issue of the Harvard Business School alumni magazine, 817 MBAs and executive education participants were asked “What should we teach our future business leaders?”
The top five responses were (in reverse order) leadership, technology, entrepreneurship, globalisation, and the most cited lesson for tomorrow’s business leaders by wide margin “morals, ethics and values”.
“And you’ll probably get the benefit of the doubt for media when problems occur as they undoubtedly will even in ?good’ companies,” says Grayson.
“Those who argue for narrow shareholder added-value purpose for business are in my opinion, missing the point. You will only now achieve sustained shareholder added-value if you also address the concerns of other stakeholders.”
If you’ve the read the seminal book Built to Last, this is moving from the tyranny of the or (shareholder or stakeholder) to the genious of the and (shareholder and stakeholder)! he says.
Leadership at the top is
crucial
Business in the Community group in the UK has programme where CEOs each year lead visits to see how businesses can help the community. “Seeing is believing” visits have run for 10 years and taken more than 2000 business leaders.
“Particularly under the Blair govern-ment many of these leaders are being invited to share their expertise and creativity on number of taskforces looking at inner city regeneration, social exclusion, and helping long term unemployed from welfare to work,” says Grayson.
This is now extending globally, he adds. “The co-chairman of Unilever, chaired panel of ll CEOs forming part of the world water forum in the Hague in March.
“A crucial factor is integrity Ñ there’s no point in supporting environmental programmes if you’re polluter, no point in supporting small business agencies if you are late payer of these suppliers.
“Businesses that want sustainably to add value for their owners now best achieve that by minimising negative impacts and maximising the positive impacts they have on society.
“Shareholder added value (SAV1) will only be possible over time with societal added value (SAV2).”
