This is the era of the Arab Spring, the mortgage crisis, “too big to fail,” Occupy Wall Street with its offshoots almost everywhere; and ubiquitous cell phones and cameras that are linked to massive Internet based social networks.
It is also a time when Bank of America backed down on $5 charge to use your debit card. GoDaddy backed down on support for SOPA, and lost customers anyway. Verizon backed down on a $2 charge for using the phone to pay your bill.
The visible side of the news creates a picture of greed oozing from the executive suites of large corporations and the palaces of dictators, but with an historic difference. Now the power of corporations and dictators is being met with the power of their communities. The corporations and dictators are no longer the almost certain winners in the exercise of power.
Corporate power for executives originally flowed from the owners and investors. When enough people decided that that power was being used to abuse employees, the employees and their supporters found power in unions and legislation. As corporations became larger and had greater and greater impact on the lives of their customers, either directly as in the cases cited above or indirectly as in the mortgage crisis, customers began to express outrage at actions perceived as corporate greed.
A few bad apples can indeed spoil the entire barrel. A public outcry based on social networks can be directly targeted at the perceived misbehavior of a single corporation. But, the public will soon tire of outcries and turn to their only other tool, legislation and regulation. This will impact all corporations. The burden will fall on both the responsible and the irresponsible. And history suggests that the benefits of legislation written in response to public outrage will fall short of its goals.
I suggest a need for three broad types of changes.
- Executive suites must tune in to the needs of the communities they serve and the communities they impact and find ways to balance the needs of investors for returns that justify continued investment, employees for workplaces that inspire and reward performance, customers who buy their products and services, and the Global Village that is impacted by pollution and misuse of natural resources.
- Executive suites must find reasons for their corporate existence in addition to the creation of wealth. “For those who say business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.”* Ideally, a purpose that inspires investors, employees and customers and the broader community to lend their support to the corporation’s continued existence.
- Executive suites must find ways to tell stories about the good they are doing. The press and the public are getting very good at finding apparent greed and putting a spot light on it. And, a few bad apples are endangering the entire barrel. The public is skeptical. Good news is not as dramatic as bad. Telling the good stories won’t be easy. When one corporation does something that supports the public perception of greed, other corporations must publicly refuse to follow and demonstrate that not all corporations are deaf and blind.
All of this is by way background. I have just finished reading Screw Business as Usual, by Richard Branson. Example after example of corporations, executives and others who are using their talents, experience and resources to make the world a better place for all of us now and in the long run.
I follow business news rather closely. I was aware of some of the stories in his book but was not aware of others. I was not aware of the scope of the progress General Electric is making to reduce pollution, as one example. Or of alternative structures, largely funded by corporations, that have been developed to solve a wide range of problems including threats and wars, carbon based air pollution, and problems where the answers become apparent when reliable data is available to corporate decision makers. Stories based on advances in technology, better application of existing technology, and simply better ways of thinking about problems so they can be solved.
There will be continuing outcries for business to do a better job of meeting the needs of all of the communities they serve and impact. Like a splinter in your finger that demands your attention responsible action in response to the splinter or to public outcries can solve the problem. Refusal to act will simply lead to bigger problems.
Large corporations have led the way to a better life for all of us but it is clear that less and less of the improvement is being shared with employees, customers, and the community at large. That trend is putting the health of our corporations, and in turn the economic health of the United States, at risk.
Read Richard Branson’s book. Be inspired. Find your role in creating a better future for all of us.
* Ray Anderson, founder of Interface Inc. cite on page 99
Virgin Unite http://virginunite.screwbusinessasusual.com/
Screw Business As Usual – Richard Branson, Portfolio/Penguin © 2011