Epilogue: Becoming a Global Moral Leader
Undoubtedly, you want your business to succeed, and you want to do the right thing. The good news of this book is that you are not alone. A large number of business leaders want to do the right thing and believe doing the right thing leads to organizational and personal success.
Like many leaders, you feel a deep responsibility for your businesses and your workforces. Your challenge now is to accept an even larger responsibility. Whether you realize it, the future of our planet is in your hands. Why? Because you are part of the most powerful social force on the planet today. In the last half-century, the corporation has assumed a central role as the iconic institution of many cultures across the globe.
Business is rapidly assuming a role as the most influential force in the lives of the world’s 6.9 billion people. Religions, families, ethnic groups, and governments still matter and thankfully will continue to matter, but unless business leaders and their workforces bring moral values to work, none of those other institutions will matter enough. If you are not sure just how influential you are, consider the importance of the consumer economy to the well-being of your friends, family, employees, and the world.
As a business leader, you are a de facto moral educator. The moral lessons you and your company teach are lessons more powerful and more pervasive than that of churches, schools, and families. If you do the right thing, you can teach moral behavior to your employees. If you cook the books, fire someone unfairly, or use deceptive business practices, you teach others to do the same thing, or you mislead others into believing that’s just how business is done.
Your workforce learns right and wrong at your workplace and learns that “right” is sustainable and “wrong” is not. If we want current and future generations to care about the welfare of others and the prosperity of the business and the survival of the planet, we who lead today’s businesses need to show them the way. When it comes to moral values in the workplace, a lot needs to be said, and more needs to be done!
You may not have signed up to be a global moral leader, but you are. And with the inescapable power of your role comes a daunting responsibility. It is a responsibility that includes and yet goes beyond profitability. It is a responsibility that encompasses and goes beyond more obvious notions of corporate social responsibility.
Raising the Stakes
This book argues that moral intelligence and moral skills are critical to sustainable business performance. It proposes a set of essential moral skills and highlights the moral mechanics of interacting with the usual organizational stakeholders, especially customers, employees, and owners. Like most leaders, you recognize that you are accountable to those three groups, but another constituency is equally important—the communities beyond your organization.
Every organization lives within at least one community: whether it is the neighborhood surrounding the corner grocery store or the world community in which a major multinational corporation operates. How well do you serve the community that hosts your business? Consider these three different levels of responsibility you have for your external communities:
• The responsibility to do no harm
• The responsibility to add current value
• The responsibility to add future value
Watch Your Wake
Boaters entering harbors are often greeted by signs saying, “Watch Your Wake.” Traveling too fast creates lines of turbulence—the wake of the boat—that can capsize smaller vessels. You also need to watch your wake. You need to understand the potential negative consequences of your presence in the communities where you operate. Some of the most admired corporations in the United States and in the world have been slow to acknowledge the catastrophic side effects of their business processes.
Businesses have knowingly and unknowingly polluted oceans and rivers and lakes. As Erik Peterson and Jay Farrar from the Center for Strategic and International Studies1 have pointed out in their presentation on the “Seven Revolutions” that will shape the world in the next 25 to 50 years, strategic resource management of food, water, and energy will become an even greater challenge as the overall population of the world balloons to 8.8 billion by mid-century, while simultaneously the population of developed countries contracts.
Too few of the world’s biggest companies take seriously their responsibility to do no harm.” A research report published by AccountAbility, a UK-based social responsibility institute found that the world’s 100 largest companies have a poor record of accounting for their impact on society and the environment.2 Had traditional philanthropy and community involvement been included in the report, big companies would have been rated more highly. Nevertheless, their relatively poor showing illustrates large companies still need to be convinced to do no harm to the environment.
Although environmental protection is an obvious responsibility for business organizations, other more subtle forms of pollution need to be remedied, and other challenges need to be addressed. If you work in the media industry, you may need to watch your wake in the behavioral messages you send to children and adults. Just about every business needs to be concerned with the potential negative consequences on family life of a 24/7 work culture.
Give Back
In addition to doing no harm, you also have a responsibility to “give back” to your communities in exchange for the varied resources that they provide—desirable locations, good employees, attractive living conditions, raw materials for manufacturing, customers, and so on. Business-sponsored social responsibility programs are one good way to add value to your communities at large. Your personal efforts and contributions of time and money are another.
You and your business have likely contributed positively to your local communities in many ways—perhaps by supporting programs in education, the arts, and health/well-being or by mentoring programs for at-risk youth or fundraising for medical research. If you and your organization add value in these and other ways, good for you and good for your company.
Giving back is more than a public-relations tool. It is vital for maintaining thriving local, regional, and world communities and the more you can do, the better. As the world’s economy continues to globalize and as communication and travel technologies continue to “shrink” the world, each of us and the businesses we lead and work in have the opportunity to become even better at giving back.
Create the Future
Your third level of responsibility, to add future value, is the most challenging. Accepting responsibility for the future can be difficult in a business environment that is so attuned to the short term. It is relatively easy to contribute to the cause of the month because the need and the benefits are usually obvious. Figuring out how to add future value is less intuitive. Caring about the future impact of your business on the community and the world requires a different mindset. Consider this illustration of the kind of mindset that we would have to cultivate: At the 1998 State of the World Forum (founded in the mid-1990s by Jim Garrison and Mikhail Gorbachev), participants had the fascinating experience of participating in a ceremony led by a Polynesian tribal chief from Hawaii. After the ritual, the chief was asked, “What is your advice for those of us in businesses who are concerned about both the short term and the long term? There is a lot of pressure on quarterly and annual results.” The chief answered, “You need to understand how we think about responsibility and accountability. In our culture, we help people realize they are accountable to the three generations that preceded them and responsible for the seven generations that follow them. When we make decisions, we take into consideration the impact of that decision on someone seven generations from now.”
Imagine what your company’s strategic plan would look like if Polynesian decision-making criteria were incorporated into your analyses. We have seen the harm done by managers who optimize for the short term. What kind of good could your company do if its performance objectives were designed to contribute to results a hundred years down the road?
A Global Business Opportunity
Ironically, the global economic crises we have been facing during the last several years make our opportunities to “do well by doing good” even more obvious. Caroline Stockdale, SVP and chief talent officer of medical device maker Medtronic offers this perspective:
The globality of the [economic] crisis has made this crisis significantly different from any previous downturn. This is still a very difficult time, and we can see it in countries like Greece and Ireland and even here in the US. The crisis has impacted so many lives. Everyone knows someone who has been personally hurt. What is interesting to me is what lead to this perfect storm at the macro level was a lack of moral intelligence and a preoccupation with self-interested behavior. At the micro level we saw people living far beyond their means. People had so much faith in the economic institutions in America, and that faith has crumbled, and those institutions have lost respect. But the crisis also brings opportunity and puts on the map some of the emerging markets, such as the emergence of China and India. Serving the need of new markets creates new opportunity.
Like all the moral competencies discussed in this book, serving your external communities is not only morally right, but also essential for sustainable business success. The business case for global moral leadership is strong. There are profits to be made. Here lies the opportunity: As you provide the people of the world with good jobs and fair pay for their work or fair prices for their products and services, you simultaneously expand the opportunity for yourself and your business.
Global business is less about expansive holdings and more about expansive thinking. Consider this: Businesses that work to increase the welfare of the global community simultaneously increase the market for economic goods and services.
A Business Week article chronicled how new technologies could help alleviate chronic poverty in India. It pointed out that “many of the educated elite responsible for the success of India’s tech and software houses—or who have helped U.S. multinationals prosper—decided to turn their energies to helping India’s poor.”3 They see both the opportunity for compassion and the business opportunity for profit that comes from helping the poor move up the economic ladder.
The article quotes management strategist C.K. Prahalad, who says, “If you can conceptualize the world’s four billion poor as a market, rather than as a burden, they must be considered the biggest source of growth left in the world.”4 Every person on the planet is a potential customer or partner or supplier or employee. Large companies today may compete aggressively for a dominant share of a ten-million customer market or for a relatively small number of highly educated and technically competent prospective employees, when the actual potential market and the potential workforce is the entire world’s population.
Today, markets are constrained by the economic status of regional populations, and education and development is typically available only for those who can afford it. But people lacking education are not dumb, and people without economic means still have material needs and the intelligence to create economic value (through jobs) in exchange for the ability to buy products that will satisfy those needs. Many people in underdeveloped regions can’t afford the consumer products they are hired to produce. (Think designer athletic shoes.) Wouldn’t it be good for business if they could? Henry Ford asked that question about an infant American car industry more than half a century ago. Henry Ford may not have been a saint in many respects, but he knew how to do well by doing good. He figured out how to create customers for his new-fangled automobile by paying his workers well above the going rate. He wanted people making the Model T to be able to afford one. He created a market for his products through enlightened self-interest. Henry Ford’s workers won, and Ford won.
Prosperity need not be a zero sum game. Why couldn’t we increase our markets by financing business start-ups in third-world regions? The micro-lending movement is a good example of the economic effectiveness of business creation in undeveloped regions. But those economic experiments are largely the province of academics and nonprofits. Why aren’t those of us in the for-profit sector doing more to develop communities that will, in turn, sustain us and our businesses through the balance of this new century and beyond?
We need to stop thinking that we can only win if others lose. Ultimately, none of us will do well unless all of us do well. We may be feeling quite comfortable in our plush executive suite or on the porch of our summer home. But our grandchildren and great-grandchildren will not have the benefit of our well-appointed lives if we don’t help all the world’s people do better.
Conclusion
Mark Twain once said, “It is curious that physical courage should be so common in the world and moral courage so rare.” It is time for moral courage to take center stage in business and for business to accept the responsibility that comes with its prominent position in the world. The ball is in our court.
Endnotes
1. As presented at http://www.csis.org.
2. AccountAbility, The State of Responsible Competitiveness 2007, http://www.accountability.org/images/content/0/7/075/The%20State%20of%20Responsible%20Competitiveness.pdf.
3. “The Digital Village,” Business Week, June 28, 2004.
4. Ibid.