Friday, 5 August 2011

News International - a failure of culture?

The hackgate scandal and the subsequent repercussions in the News International empire have provided a graphic demonstration of what can happen within a company with a toxic culture. It's quite possible that the various executives were telling the truth when they sat before the select committee and professed their ignorance of phone tapping, but that doesn't mean they were blameless. Accounts of journalists working there at the time of the alleged events describe a workplace where there was overwhelming pressure to get the story at all costs. It's quite understandable that under these conditions some might feel compelled to resort to illegal methods of getting the scoop. The leaders of a company set the vision and values that drive its culture, and in doing so create a kind of moral framework that informs the decisions made by its staff.

This kind of culture is a hangover from the Gordon Gecko "greed is good", "win at all costs" mentality of the nineteen eighties that has mostly been left behind by today's more enlightened businesses. In its place, we are seeing a new approach to doing business where social capital is valued alongside financial capital on the triple bottom line. These organisations have a "win/win" mentality and aim to beat their competitors not by undercutting on price (and, as an inevitable consequence, quality) but by being more trusted as business partners. So as consumers - of goods, media, services, whatever - we now have a new benchmark for judging the desirability of a brand. Integrity, respect and honour are becoming the new currency of business, and the cynical and exploitative companies will find themselves outmanoeuvred in a way they quite possibly won't fully understand until it's too late.

Thursday, 4 August 2011

Embedded sustainability - an idea whose time has come

I have been struck recently by the possibility that business may finally be grasping the concept that corporate environmental and social responsibility needs to be embedded in the organisation and, furthermore, that it might actually bring commercial benefit. This point is made convincingly by a new book - Embedded Sustainability: The Next Big Competitive Advantage, by Chris Laszlo and Nadya Zhexembayeva (Greenleaf Publishing, 2011). There's an executive summary of its contents, and a discount code (although sadly not valid on the ebook), on the Defra Sustainable Development website.

The book argues that the companies who will succeed are those who choose to embed sustainability into their DNA, incorporating environmental, health, and social value into core business activities with no trade-offs in price or quality. But unlike the ubiquitous bolt-on approaches, embedded sustainability requires a fundamental paradigm shift across every dimension of the business. The writers believe that most organisations have yet to discover how to meet both shareholder and stakeholder requirements in the core business – without mediocrity and without compromise – creating value for the company that cannot be disentangled from the value it creates for society and the environment.
This point of view is taken still further by another author, Carol Sanford in her title The Responsible Business: Reimagining Sustainability and Success (Jossey-Bass, 2011). Carol argues that the most successful and profitable businesses, over time, will not be those that "practice CSR" but instead those that rethink their purpose, reorganize themselves to draw upon the creativity and passion of all, and integrate responsible behavior into the way they do everything they do. And, as she told, that goes beyond embedding sustainability into the business; taken to its logical conclusion, it could mean the end of CSR as we know it.
These are familiar concepts to me, after almost 20 years working for a subsidiary of Kyocera Corporation, which could be the poster child for responsible business. Kyocera's founder, Dr Kazuo Inamori, established the Kyocera Philosophy in the early 1960s, shortly after the company was founded, and at its heart is a single, simple promise: to do what is right as a human being. Almost 50 years on, and with over 60,000 employees across the World, Kyocera employees are still trained in the Kyocera Philosophy and refer to its guiding principles in their daily decisions. All well and good - but it provokes another dilemma. We simply don't have the vocabulary to describe this alternative approach to business in a way that is concise and easy to understand. As with sustainability, the lexicon for ethical and responsible business is littered with terms that fail to convey effectively the commercial and social benefits that accrue from this approach.