CHAPTER 11
A Hopefully Idealistic Vision

We hope we’ve made our case that the Worthiness Era is at hand. That companies, more and more, will have to prove to be good employers, sellers, and stewards to succeed. And that companies that don’t do this risk being left behind, out in the cold by a public that is increasingly ethical in its economic choices.

But we realize you may remain skeptical. You may be saying: “This sunny vision is too good to be true. Companies may be talking up sustainability, being an employer of choice, and taking care of customers, but they haven’t truly changed their stripes. They’re still profit-maximizing organizations obsessed with shareholders’ short-term gains. This Worthiness Era business is hopelessly idealistic.”

Conversely, the more conservative of you may be saying, “This vision is unrealistic. Companies may try to tap green consumer trends and fire up workers. But they can’t put excess attention on employees, communities, and the environment. Profitability will suffer, and their ultimate stakeholders—shareholders—may lose everything. This Worthiness Era business is hopelessly idealistic.”

It is idealistic to think of companies taking the lead on global warming, consumer safety, and being a good employer. But the Worthiness Era isn’t hopelessly idealistic. It is hopefully idealistic.

That is, the idealism here is realistic, making this vision full of hope. The pressures and trends we have described are tangible. And pursuing worthiness these days is practical for firms. Take stewardship of the environment. Yes, greenwashing exists and will likely persist for some time. But taken as a whole, the evidence indicates the green of the crop, as it were, will rise to the top. Companies, for instance, won’t get their products onto Walmart’s shelves unless they disclose their ecological impact as never before. More and more investor dollars are seeking sustainable companies, making the cost of capital partly a function of planetary protection.

And firms are being forced to focus on climate change as never before. The U.S. Securities and Exchange Commission issued guidance in early 2010 on how a company may have to disclose impacts of climate change and related legislation on its business.¹

It’s helpful to put the discussion of stewardship today in historical context to see how much progress has been made. American business executives as a rule didn’t even talk directly with environmental advocates in the 1960s and 1970s. The “Council on Sustainable Development” created by former President Bill Clinton in the 1990s was one of the first occasions for that direct dialogue. Now companies have ongoing conversations with environmental groups and researchers.²

David Buzzelli, a former executive with Dow Chemical who cochaired Clinton’s Council on Sustainable Development, is hopeful about the future for two other reasons. First, he sees promise in the way business schools increasingly train MBAs to include sustainability and social responsibility in their conception of business goals. Second, he notices greater consumer focus on the environmental impact of their decisions. In a capitalist economy, he says, that is the key to real change. “People are voting with their pocketbooks,” Buzzelli says. “That’s the most important driving force.”³

Scott Scherr, CEO of HR software provider Ultimate Software, sees a similar sea change under way when it comes to attitudes about employees. Most companies may be far from the kind of commitment to workers Scherr has shown at Ultimate, with its 20-year legacy of no layoffs. But Scherr detects greater concern about treating talent well. More and more of the HR leaders he talks with about people-management software report directly to the CEO. “There’s absolutely something going on,” Scherr says.⁴

And, as mentioned in Chapter 8, a similar story is unfolding with respect to customers. Better seller behavior is on the rise, as seen by improvement in the American Customer Satisfaction Index since 1997.⁵ Despite a dip in the second half of 2010, customer satisfaction levels from the fourth quarter of 2008 to the end of 2010 were generally higher than in 2007 and surpassed scores from 1997 to 2006.

The Great Recession could have crushed the momentum toward better corporate behavior. Consumers, workers, and investors could have concentrated strictly on selfish needs like low prices and high returns. But they didn’t. People continued to seek out good companies. It’s worth repeating findings from Edelman’s 2009 study of 6,000 consumers globally. Fully 61 percent bought a brand that supports a good cause even if it wasn’t the cheapest brand, and 64 percent said they would recommend a brand that supports a good cause, up from 52 percent only a year before.⁶

This new economics of purposeful profit is unlikely to dissipate with a recovery. It will be easier, rather than harder, for people to buy, take jobs, and make investments based on their principles. Indeed, in 2010, 70 percent of global consumers said that a company with fair prices that gives back is more likely to get their business than a company that offers deep discounts and doesn’t give back.⁷

And other forces supporting the worthiness era are likely to strengthen. The march toward more technology-enabled transparency continues. Witness the successful demands that BP provide a live video feed of its oil spill at the bottom of the Gulf of Mexico. It is hard to imagine that a generation ago a major corporation could have been pressured into exposing a catastrophic blunder in real time, with the unflattering images broadcast nearly nonstop on television.

And the participatory culture of disclosure is unlikely to ebb anytime soon. If anything, it seems to be expanding into the massive Chinese working class. Consider the way Chinese workers at a Honda plant used cell phone text messages and the Internet to organize strikes for higher wages in mid-2010. The workers in Zhongshan uploaded video of security guards roughing up employees and urged coworkers to resist factory bosses.⁸

It turns out those workers were inspired in part from an earlier protest in another Honda factory in Foshan, China, where workers used Internet forums to organize.⁹

The Honda strikes are part of broader shift in China, where younger workers are standing together and standing up for themselves in ways older Chinese workers didn’t. Listen to Lan Yimin, a 22-year-old migrant worker in the Pearl River Delta. “The young generation has a wider social circle,” she told the China Post. “We talk more about factory conditions and we know more about our legal rights.”¹⁰

This is the world that is emerging. One that is fundamentally a more connected one. Where people are, in effect, keeping each other company like never before.

Bad companies won’t be invited into the new world taking shape. They will wither. Good companies, though, will find themselves welcome. And they will flourish.