What’s in a word?

Reflections on different understandings of corporate purpose – and what that means for business-government relations.

These days everyone seems to want to know the views of the ‘young leaders of tomorrow’. If the present is tough, the future offers hope, although it does have a habit of catching up with you. As David Cameron cruelly observed of Tony Blair – you were the future once. How times change.

To polish up my crystal ball, I studied with interest a report published by Coca-Cola Enterprises towards the end of last year about the role of business in society. Conducted by the Doughty Centre at Cranfield University School of Management, Combining profit with purpose compared the views of current business leaders with so-called future leaders, essentially MBA and MSc graduates.

Nine in ten out of both generations agree that business should have a social purpose. So far, so good. But then two findings stood out starkly for their differences. Asked whether businesses today do have a clear sense of social purpose, nearly nine in ten current executives said yes. But only two in ten future leaders agreed.

That reveals a profound disagreement about what a social purpose actually is. My hunch is that the old guard see it in terms of having a social benefit spin-off, whereas the young people are looking for something more profound. I’m with the youngsters on this. We need companies that define their very existence in terms of meeting genuine needs over the long term, and organise the business accordingly.

The second stark difference was about what’s stopping companies adopting a social purpose. Here current managers name governments as top of the list of barriers; but future leaders put it bottom of their list alongside regulators. Again this is likely to arise from a different understanding.

On this one I’m with the old guard. However, my hunch here is that too many think the answer is still to ‘get government off our backs’. They see things simplistically as pro- or anti-business – witness the ill-judged intervention into UK politics of the Walgreens Boots Alliance boss, Stefano Pessina.

More thoughtful leaders, like the ubiquitous Paul Polman of Unilever, talk more constructively of “a great opportunity to work together with the government” – as he just said to India’s new prime minister, Narendra Modi.

We need business leaders – current or future – to move away from lobbying against things and towards advocacy of the public policy changes that will genuinely harness the power of business to make a difference. We need more companies to answer the question posed by Charles Handy back in 1990: “what is a company for?” Sadly, the prospects for this over the next 90 days in the UK election campaign, and elsewhere in the world, aren’t encouraging at all.

This article was also published by Responsible Business

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