clouds Becoming a more socially responsible organization

How corporations can adjust their mindset toward attacking poverty, pollution, cybercrime and other worldwide issues and do it profitably.

After the World Economic Forum in Davos, Switzerland, most corporations quickly forget about stakeholder values and go right back to the single-minded goal of maximizing sales and profits as their main goals. In this multi-part article, I will look at the struggles of multinational corporations to be more socially responsible and what employees can do about it.

One of the stakeholders I talked about in a previous article about Moving to a community servant model and Open Organization approach are employees. There is a growing employee motivation problem within large, multinational corporations. Just look at their high turnover. One of the issues is a lack of greater global purpose and aspirations over heartless profit maximization.

I just read the book The Intrepreneur: Confessions of a Corporate Insurgent by Gib Bulloch. In his very personal book, Bulloch exposes this problem from within a very powerful consulting company, Accenture, a company created after the Arthur Anderson and Enron scandal.

I have also written about the importance and need of multinational corporations moving more toward the global good with Globalization and industrial revolutions and away from mere profit maximization in my articles. There is another reason why they should take global responsibility more seriously: more of their own employees are demanding it and will leave the corporation if they don’t feel good about contributing to the greater global society, particularly in developing countries.

We should look at the desires of managers and employees - not just investors and board members - to develop sustainable company projects. I would argue that board members should not only represent shareholders; employees, customers, the environment, and other outside stakeholders must also be fully represented or respected.

Drawing on experience

The Intrepreneur is about very personal events of Gib Bulloch’s experiences within Accenture and how he suffered from a lack of purpose, as he only put his attention toward client profit maximization. To write the book, Bulloch looked for others who were also suffering in terms of professional purpose. While writing it, Bulloch was supported by Business Fights Poverty, which looks at the issues that he was struggling with in his career. They argue that there is a strong, profitable business model that addresses worldwide concerns.

Multinational corporations could be an enormous force for good in the world but are not putting in the required effort or applying enough attention to it. They should be working alongside governments, aid agencies, and civil society to solve global problems.

Bulloch argues for an agreed-on vision for the future, like the UN Sustainable Development Goals (SDGs). There must be a shared roadmap which will lead to a more inclusive and sustainable future. In 2017, the UN listed the investments required, including business’s role in their Better Business Better World report. (SDGs & business opportunities). To support upward career mobility, Bulloch identified the organization Generation which teaches basic entry-level skills.

Imagining possible futures

I wonder if the Business and Sustainable Development Commission might work with people within companies that want to promote sustainable development? Supported by this commission, could employees collaborate with them to develop a company strategy?

People in large corporations could be part of the secret to making corporations more sustainable and socially responsible. Employees are stakeholders too - they don't just seek personal financial reward, but are more and more needing a sense of global contribution. This is particularly true among young people concerned about the planet and environments, poverty, and humanitarian issues. They want to know their employers are net supporters in creating a better world and a healthier planet.

Over half of the largest economies in the world are global businesses. Multinationals have emerged as the new superstates which span arbitrary geographic borders or sociopolitical boundaries. With that thought, these businesses could develop common sense solutions to problems that cannot be solved at the national level.

To do that, Bulloch thinks this issue is growing among managers and employees. Maximizing profit must take a more balanced position and not dominate. That is why Corporate Social Responsibility (CSR) initiatives now exist. But mere initiatives are not enough. Leaders must motivate the hearts and minds of people by fostering the right working environment. 

One of the problems is that - for a truly unselfish person - focusing on return on investment, profits and wealth creation is toxic. On the other hand, a true capitalist considers donations a complete waste. 

There has to be an ideal middle between these two extremes. This is an area that should be explored, discovered, exposed, illustrated and addressed. We have to find a way to attract private investment, capital, innovation and entrepreneurship into providing public goods and solving these big social problems. We have to reframe “social problems” as long-term “business opportunities.”

Possible solutions

According to Bulloch, the UN Sustainable Development Goals provide good guidelines for corporations to expose massive untapped commercial opportunities for them. Employees and social Intrapreneurs are most likely to collectively multiply en masse, which will get in-corporation responsible-sustainable projects off the ground. This may come from the masses of disengaged employees that are longing for career purpose, especially today’s Millennial employees. They are super-connected and will be in the ideal position to champion these socially beneficial causes.

Consider where most of the world’s children are born. They are in countries like Nigeria, Indonesia and India. How can that be looked at through a business lens in child development, healthcare, education, and skills development? The Brookings Institute estimates that investing just (US)$1 in an Indian child at birth would be worth (US)$54 when they enter the workplace. So it may not be a surprise to see terms like “impact investing” and innovative financing instruments like Social Impact Bonds being explored and introduced. They are paid only after results in projects are confirmed, like child level of literacy or arithmetic at a given age.

Employee mental health within multinational corporations

According to Bulloch, Accenture and its consulting competitors such as PwC, Deloitte, EY, and IBM can potentially play a massive role in harnessing the latent power of business for good. Within those companies, one in four employees experience some kind of mental health issue in their lifetime, which is directly connected to their desire for professional global purpose. These mental health issues should be talked about and exposed. Through that transparency, social good projects could develop. Sam Knuth, one of our Open Organization Ambassadors, has written about employee mental health and how this problem may provide a major solution, which is pride in company purpose.

Building a non-threatening initial internal projection

As Bulloch was struggling to find career purpose in his consulting work in Accenture, he knew that just maximizing client profits was not rewarding enough. He needed something greater. So, he developed the Accenture Development Partnerships (ADP) within the organization.

What Bulloch wanted to do with ADP was build a “corporate social enterprise” internal business unit within Accenture to plant the seed of corporate purpose which an employee could be proud of and get excited about. Imagine a group that its members are so proud of because of their contribution to the global good, that they would be willing to take a pay cut and volunteer extra hours to be in. Those goals were to offer Accenture’s skills and talent to places in the world that could not afford their services but needed them the most. 

The group was to offer these skills on a not-for-profit, yet not-for-loss basis. Financially, their goal was to break even only and provide as much expertise as possible. All their attention was to be in underserved areas in fields like education, water and sanitation and humanitarian relief, the problems that plague the poorest parts of the world. Incidentally, I had that same sense of pride when I was giving sales seminars in developing countries, particularly in Africa. 

Employees seeking pride in achievements

Here is the issue: How many people will redirect their career from the respect and luxury of the professional fast lane to a poorly respected not-for-profit project within the poorest counties and hardest living conditions in the world?

That is the challenge these multinational corporation internal employees are struggling with. They are thinking of doing something that is right and globally important against something that is profitable, prestigious and glamorous. Externally, they see success. Internally, they feel empty and unsatisfied.

In The Intrepreneur, Bulloch explains how he felt he was just making very rich people richer and not even looking at the massive needs of others. This issue drove him into a mental institution, as he thought that just a fraction of the workforce would consider such projects he proposed.

We all have to ask simple questions. Do you feel proud that you are achieving something important? Is your company exciting and energizing you, or frustrating and exhausting you when looking at their activities and attitudes? 

Maximizing profits vs. emotional rewards

Most publicly traded large corporations have powerful pressure to strictly maximize shareholder value. Even famous university professors for decades - like Michael Porter, a Harvard Professor - claimed that shareholder value is far more important than every other possible consideration for business success.

Now, with too many global issues that must be collectively addressed, people are starting to change that belief in shareholder dominance with a better balance to include the needs of the greater society and planet.

Balancing values

Finding balance can be difficult. For example, in the past the fossil fuel industry was praised, yet teachers, nurses and many other professions were undervalued and disrespected.

And if change is required, such as moving away from burning fossil fuels, we may see resistance to it. 

I faced this pushback when promoting worldwide vehicle sales training. It took me over five years to overcome that resistance. First, we started sales seminars in many non-threatening small, unimportant markets. I slowly developed my sales seminar reputation, moving to larger, more important markets. Those earlier seminars provide visible illustrations, testimonial, case examples and concrete empirical data that supported the value of this activity throughout the company. Before that, nothing was persuasive.

Along similar lines, Bulloch believes that management consultancy - very broad across a wide range of industries, regions and specialties - is ideal to push for a more balanced approach toward wide-ranging stakeholder value and respect.

Government support for business staff doing global volunteer work

Some government agencies recognize this lack of purpose within corporate professionals and encourage staff to postpone their corporate career and do volunteer work in countries that really need their expertise. In the UK, VSO (similar to the Peace Corps in the US), offers a six to twelve month program just like that. This is just one way that those employees can find purpose in their lives, not to mention provide their skills where there will be the greatest impact.

Instead of striving to make a fortune, these opportunities give these people a chance to make a difference, whether it is working as accountants, project managers, business professionals, or business strategy consultants (like Bulloch). Different VSO centers work on education issues, health concerns and basic livelihood matters, mostly in Africa and South Asia. They work with local non-profit partners or rural government entities. Those partners provide basic living expenses and accommodations during their time of service.

Along with the above benefits, as a way to reduce turnover of quality employees and improve work satisfaction, all major corporations should promote similar types of activities to their personnel to foster employee pride and satisfaction.

These activities can provide upward mobility to youth with no education, no job, no money and no hope - which could lead to grievance issues and be taken advantage of by extremist groups.

Company’s role envisioned

How might a corporation go beyond just dispatching a butch of volunteers to get involved in VSO projects, but look at company capabilities on an industrial scale and redirect them to the parts of the world with the greatest need? 

For this to be successful in consulting, Bulloch recommends two things: Companies must reduce their overhead to make this cost-effective, and employees must be willing to reduce their compensation for the greater good. Then, great progress in consulting could be scalable in the poorest regions of the world. What Bulloch did was create a mission- and purpose-driven non-profit business unit within Accenture (a group dedicated to corporate social responsibility).

To be feasible, the business unit had to answer three basic questions:

  1. Is there a market and need for the services they offer?
  2. Would offering the services be economically viable?
  3. Would enough employees in the company be interested in its mission?

Business opportunities by addressing social problems

Most social problems have business solutions, but this takes a great deal of both technical and market-needs studies. Putting in the effort and adjusting goals toward not-for-profit, not-for-loss or limited-profit, could better direct employees’ attention toward greater personal purpose.

Bulloch believed a different business model had to be created where the personal emotional value of purpose was put on par with profit. 

Working with partners

In one of Bulloch’s projects, they worked with CARE, one of the largest international development charities, to create a new development strategy for their operation in Vietnam. Another partner was the British government's aid arm, DFID, to design Humanitarian Information Centers offering technology-enabled aid coordination in emergencies.

All the above lead to the creation of the Accenture Development Partnerships in 2003, but they still had to fight a deep mistrust between for-profit and non-profit activities when it came to directing resources. 

Performance standards for social needs

Performance metrics have to change, if a company wants to be more socially responsible. Factors like sales, profit margin or cost reduction had to also include communities served, problems solved, poverty reduction, climate improvements, energy consumption reduced, air quality improvement, etc. To reflect this, new words were created like sustainable business, inclusive business or responsible business and are starting to appear. Michael Porter, whom I mentioned above, started using the title “Shared Value” (with all society) as opposed to “Shareholder Value”.

If a company starts measuring these “Shared Values”, it can separate itself from its competitors. For example, Oxfam wanted to partner with Unilever to get more smallholder farmers in Tanzanian into their supply chain of vegetables, better finance expertise, and improved business planning and quality control. That separated Unilever from others.

In part two of this topic, I will give more details of how companies can become more socially responsible, as we have a long way to go before multinational corporations start addressing global social and environmental concerns.