Companies: is it all about money?

As part of my UKTI scholarship at Kellog School of Management I attended a seminar on “Strategies for Shared Value”, discussing whether companies need to solely focus on the bottom line of creating profit for shareholders, or whether there are some larger values that business need to concern themselves with, such as the impact on society and the environment.

Initially, the presenter, Dr Jamie Jones (@ProfJNJones), took a vote on the audience’s preference – focus on money, or worry about wider responsibilities. The audience demonstrated a clear preference for the idea that businesses need to do more than simply generate income. The session continued with a debate, where two sides argued over the points. The team arguing for profit-making companies did not make the case that non-financial responsibilities are unimportant, but simply that the goal of making money should be primary. The other side’s point of view was that it is possible to do both, generating win-win scenarios, making increased financial gain but at the same time, adding increased value back to society. I did get the impression that the hearts of the profit-making team weren’t really in it when they confessed to being Greenpeace and Save the Whale campaigners, although they did point out that Whole Foods is stocking Fiji water, which is far from environmentally friendly.

Jamie continued to explain that in Delaware (where most US companies are registered), it is possible to create a new type of company, called a “Benefit Corporation”, that is designed to do more than generate profit, but to add benefit back to society. Currently 27 states in the US have introduced this type of corporate setup, with 14 more on the way. She noted that 55% of global consumers are prepared to pay extra to companies with positive social and environmental impact. She also explained that there is a “tidal wave” of Millennials born after the Baby Boomers who have more than $41 trillion dollars to invest, and looking for more ethical options.

Jamie then presented a series of examples including GE’s Ecomagination system for renewable energy in the developing world, Nestlé’s scheme which benefits local coffee farmers more than the FairTrade scheme, and HP who worked with the Bill Gates Foundation to deliver quick HIV test results to medical practitioners in Kenya (boosting printer sales at the same time). Interestingly, each of the examples caused some debate and discussion from the audience. Are each of the companies really adding value back to society, or are they continuing to focus on financial gain whilst causing a distraction with much publicised corporate responsibility schemes? That is the basis of the ongoing debate.

Jamie concluded her presentation with the following quote from Margaret Mead:

Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.

Hear, hear!

As a business owner, I was considering what I could personally do to add value back to society. At first, there didn’t seem to be any obvious answers to this question. As the session continued and more examples were discussed, I realised that my company is in the business of helping to develop medicines and to save lives, and this is an area that many other organisations need help with. I have a few ideas that need a little more development before announcing, but watch this space. Of course, like most companies, we could also do more to reduce energy usage, and this seems an easy win-win plan.

At the end of the evening, whilst chatting with my classmates, a great example of a company with a plan to add something back to the community came up: “Old Prickly”, a beer made by Hobsons Brewery, a Shropshire based sustainable brewer. For every bottle sold, the company donates to the British Hedgehog Preservation Society. That, surely has got to be a win-win situation.

One brief final note. Many of the ideas discussed in the seminar are also discussed in Umair Haque’s book, “The New Capitalist Manifesto”. I would encourage you to give this book a read if you haven’t already.

Who do you surround yourself by?

lakemich

I’m sitting on the edge of Lake Michigan watching the sunrise. For those of you who know me, you would know that I probably don’t see the sunrise very often, but the time difference is messing with my sleep patterns.

Yesterday, I started a scholarship at Kellogg Business School, part of the North Western University in Chicago, thanks to the UK government’s trade and industry group. We had our first session on “Networking”, which at first, I thought I was going to be given a glass of fizzy wine and asked to awkwardly mingle with my fellow students. After realising it was four hours long, I assumed I would be going to a LinkedIn masterclass, the likes of which I see in my spam email folder regularly. My expectations weren’t very high.

As soon as Professor Brian Uzzi started talking, I knew the class was going to be special. He drew on history as a case study to persuade us that we need a network of diverse influencers, warning of the dangers of surrounding yourself with like minded agreeable people (“The Joy of Spontaneous Agreement”). He had so much useful advice: “Your network is the way you transcend your own limitations”.

He talked about the Six Degrees of Separation concept. As a statistician, this stimulated the mathematical side of my brain. I did a quick calculation. Humans only need to know 44 other humans for this to be true. Given that the median number of Facebook friends is around 200, then I’m feeling quite persuaded.

The session culminated in all the students being asked to write down one wish. The wishes were noted, along with a monetary value, and how long each individual had held the desire for. Using the network in the room (admittedly a well connected bunch of entrepreneurs), every single wish had another person in the room who could help make it come true.

This was a truly inspirational session, where I learned an incredible amount. Many ideas and plans have popped into my head. I feel honoured to be inspired by Proffesor Uzzi but also really excited about the test of the scholarship. Many thanks to the organisers and UKTI for asking me to join.