Corporations as a force for good? Could do better.

By Martin Vogel

Supplying a force for good?
Supplying a force for good?

“Corporations as a force for good” was the optimistic title of a talk given by the London Business School academic, Lynda Gratton, at the Royal Society of Arts today. Her thesis was more a paean to than a critique of corporations. On the evidence she presented, I found her optimism a little premature. Corporations can be great conduits for the creativity and fulfilment of employees and the fulfilment of societal needs at massive scale. But they are vessels for trapping employees in alienating conditions, exploiting their consumers and society at large and they often ask too few questions about their supply chains. “Could do better” would be a more appropriate assessment of the current contribution of corporations.

Gratton shares with us here at Vogel Wakefield a conviction that organisations can and should do much more to play a socially constructive role. She presented a list of organisations doing precisely just that. These included Morning Star, an American processor and distributor of tomatoes, and Gore, the manufacturer of GoreTex fabric. Her examples were only mildly disappointing for looking remarkably similar to the roll-call of values-driven organisations cited by Gary Hamel in his book What Matters Now. They gave one the sinking feeling that the exemplars of good practice are remarkably thin on the ground, but exemplars they are nonetheless as they operate in ways that radically empower staff and devolve leadership. John Lewis was also cited as a company that establishes best practice in its engagement with the communities in which it operates.

These are examples of companies that have aligned the way they do business with core values that take into account the interests of diverse stakeholders.

Less convincing were examples of projects that looked like super-charged corporate social responsibility initiatives, on the periphery of the business purpose of the corporations concerned. These included Google’s scheme to counter violent extremism and Standard Charter’s collaboration with NGO’s to tackle blindness. These are admirable initiatives and Lynda Gratton’s point was that they are notable in that they draw on the distinctive capabilities of the corporations concerned to help address societal problems. In this sense, they are a step or two beyond conventional corporations-doing-good initiatives. I’d like to know more, though, about how these corporations draw back into their core purpose the societal learning that engagement in these initiatives generates. Both Google and Standard Chartered are corporations in sectors – big technology companies and banks – that are compromised in terms of their impact on society, their positive contribution called into question by questionable practices such as eroding privacy (tech) and bringing the economies of the Western world to the brink of collapse (banking). In this context, the initiatives cited by Gratton looked like burnishing of tarnished reputations.

Gratton had some interesting ideas on the kind of leadership that can help inspire social contribution. She acknowledged that leading corporations was a difficult and thankless task to which remarkably few even of her MBA students aspire. She described leadership as a “determined, purposeful and performance-oriented” profession that calls on its practitioners to embark on an inner-journey. Leaders need to be grounded in their world view (by which I think she means their view of society and the world about them) and authenticity (their values and the personal qualities they bring to leadership).

Hard to fault this. It only remains to explore how leaders go about their inner-journey. In my view, they need an ecosystem of support to sustain their inner-development; an ecosystem comprising insiders who understand the world in which they operate and outsiders who can challenge their assumptions and keep them connected to the broader societal values that exist outside their organisations.

Many corporations still believe themselves to be operating in a system which equates their short-term profitability with the common good. Lynda Gratton referred to intractable problems such as entrenched inequality and climate change which give the lie to that equation and underline that the old system is breaking down through its sheer unsustainable character. Corporations can be unequivocally considered a force for good when they show some understanding of their contribution to this dynamic and readiness to reverse it.

Image courtesy Zoriah.