We Have the Whole World in Our Hands:
The World-Changing Potential in the Emerging Paradigm of Business
By Vincent DiBianca, Senior Partner at Praemia Group,
World Business Academy Board Member
Does footwear company TOMS Shoes give away a free pair of shoes to the needy for every pair they sell just because it’s good for their bottom line? Is Paul Polman, CEO of $70B Unilever merely a marketing maven or is he deeply committed to impacting the sustainability of our planet? Is mega-conglomerate Tata Group, really serious about their commitment to confronting climate change or are they just smartly presenting an environmentally responsible public image?
Some would argue that this is all merely a strategy for business to find ways to look good and seduce the consumer to buy more, a way of sugar coating the real intent to simply make more bucks. Other doubters say these corporate commitments are authentic but are rare and don’t reflect the heart of global business.
Having consulted with tens of thousands of leaders in large and small enterprises over the last 40 years, we at Praemia Group, have a different point-of-view of what’s happening. We see an authentic leap forward occurring in business’ commitment to take responsibility for our collective future — an emerging movement towards a new global consciousness where business is returning to its original mission of providing real value to the world. Although, many companies place their social responsibilities as one of many decision-making factors, the emerging leaders place it at the core of all of their decisions.
After taking the helm a few years ago, Polman immediately got to work developing a more sustainable culture at Unilever. That included promoting an end to quarterly reporting so that people could focus on long-term challenges like shifting “mindless” consumer consumption by providing real value to society.
Tata Group’s commitment to a sustainable and prosperous environment spawned several new businesses such as green power from Tata Power, nanotechnology applications from the innovation center of Tata Chemicals and the supply of special steel for offshore wind farms by Tata Steel Europe.
TOMS’ vision to impact the greater good has taken its one-for-one program, which has provided millions of free shoes for needy children, and has expanded to now include free eyeglasses helping to restore sight for hundreds of thousands of people.
John Mackey, CEO of Whole Foods along with co-author Raj Sisodia point out in their recent book, Conscious Capitalism that dozens of companies are “suffused with higher purpose, leavened with authentic caring, influential and inspirational, egalitarian and committed to excellence, trustworthy and transparent, admired and emulated, loved and respected.” Their examples include: Whole Foods Market, The Container Store, Patagonia, Eaton, the Tata Group, Google, Panera Bread, Southwest Airlines, Bright Horizons, Starbucks, UPS, Costco, Wegmans, REI, Twitter, POSCO, and others.
Mackey and Sisodia say, “business has a much broader positive impact on the world when it’s based on a higher purpose that goes beyond only generating profits and creating shareholder value. Purpose is the reason the company exists. A compelling sense of high purpose creates an extraordinary degree of engagement among all stakeholders and catalyzes creativity, innovation and organizational commitment.”
This emerging corporate narrative may well be an authentic welcoming into “the heroic new world of conscious capitalism” as these authors assert, where leaders see the enlightened path to making a difference in a world facing immense challenge rather than a clever disguise to simply “get more”.
As activist and author Lynne Twist observes in her book The Soul of Money, “I’ve seen that business and entrepreneurial energy grounded in the principles of sufficiency leads to success and sustainable growth, while the notorious business affairs of recent years… offer ample evidence that business rooted in the get-mine and get-it-fast mentality of scarcity only creates financial instability and eventually proves unsustainable, even if the short-term gains seem highly profitable.”
We share the interpretation that at this time in history there are two different paradigms in the world simultaneously, one that is long established, dominant but declining, (and by declining we mean becoming less and less relevant to the changing realities of life on Planet Earth. A synonym might be: unsustainable) and another that is nascent, embryonic but growing stronger every day. This new emerging paradigm is more consistent with the realities of an interconnected world with dangerously diminished natural resources and a generation of young people demanding a new path.
Some companies operating in the old economic paradigm continue to put financial performance as the primary driver of their strategic decisions while others see financial performance as merely the scorecard for whether they are achieving their deeper mission of serving the betterment of humankind. In our view, there appears to be a marked shift in the tide of corporate consciousness – a true sea change where tens of thousands of leaders and organizations are stepping into an audacious sense of stewardship for the future of our planet.
A notable example of this paradigm shift is client Laura Roberts, CEO of Pantheon Enterprises, an alternative chemicals company, who declares, “We can’t keep blindly putting chemical toxins into our environment, our bodies and our children’s bodies with no accountability. It’s suicidal. We can change this by combining our industry’s creative resources with nature’s intelligence to develop safe, market-based solutions to our environmental challenges”. Laura stands together with other leaders from companies like: Seventh Generation, Arizona Chemicals and Ecologic Solutions in a commitment to transform their industry to non-toxic, environmentally safe products.
The Case for This Change
From a global point of view, the reasoning is straightforward and compelling.
If Planet Earth were a business enterprise, no executive could look at the metrics — whether melting glaciers or widening income disparity, whether disappearing rainforests or the global economic crisis — and not come to the same conclusion: we need a turnaround.
Business can either lead this turnaround or follow it. There is growing evidence that doing the right thing is good for business. Being purely driven by the quest for more – more growth, more profits, more market dominance not only adds to the ecological, social, spiritual and economic crisis we face, it has also contributed to the predominant view that business is untrustworthy.
A mere 2% of investors say the CEO is very trustworthy according to a Roper poll. Only around 20% of the American public has confidence in big business according to Gallup. Yet, people want to live in a better world and are attracted to companies who share that commitment and act accordingly. All kinds of stakeholders – consumers, employees and their families, shareholders, suppliers, educators, students, and business partners — are responding to our global wake-up call. The research in “cause-marketing” confirms that people prefer to buy from and work for companies connected with a worthwhile social cause. The evidence is rolling in that well-run companies that are doing good are also doing well as reflected in the performance of “purpose based companies” compared to the S&P 500 cited in Firms of Endearment (Sheth, Sisodia and Wolf) and The HIP Investor (Herman).
A new dream is unfolding in our lifetime – a dream of an environmentally sustainable, socially just, spiritually fulfilling, economically thriving and life-enhancing future for all of us. We are convinced that business holds the key to this global transformation and can provide the structure and leadership to get us there. Companies like TOMS Shoes, Whole Foods, Tata Group, Unilever, Pantheon and a host of others are showing the way and are living proof of our conviction that the future of business is making the future its business.
(Note: This article was updated January 24, 2014)