Written by Loughlin Hickey, Trustee of Blueprint for Better Business and former Global Head of Tax at KPMG
“Profit, wealth creation, tax cuts, enterprise – these are not dirty, elitist words,” said Prime Minister David Cameron in his keynote speech at the Conservative Party conference at the beginning of October. While this statement made the headlines, the assurance further on in his speech received less attention. “This party at its heart is about big people, strong communities, responsible businesses, a bigger society – not a bigger state.”
I am not sure what Cameron meant by “big people”, and I do not want to get into the ideology of the size of the state, but I do think that it would be more credible to assert that profit, wealth creation, tax cuts and enterprise are not “dirty, elitist words” if they are clearly connected to creating strong communities and responsible businesses. Experience suggests, however, that the concepts he cites can – if they are not restricted – create outcomes that do look dirty and elitist.
It is no wonder that business is not trusted by society if profit and responsible purpose are seen to be independent of each other, or even seen as competing alternatives. It should not be surprising either that, both in society and business, personal wealth and consumerism become the benchmarks of success if they come before community and responsibility. Language can normalise selfish people and aspirations unintentionally, as opposed to constantly trying to direct and inspire people towards the common good. Without the boundaries of strong communities and responsible businesses as pre-conditions, it becomes a credible proposition for Ed Miliband as leader of the Opposition, in his conference speech, to portray global competition as a “race to the bottom”, and Labour’s commitment to a “dynamic market economy” as needing more state intervention to make competition work for the benefit of society.
This view – which posits profit as a sole objective of business and advocates more rules, regulation and blame to respond to wrongdoing – permeates the business world. Across all sectors of business there have been examples of wrongdoing in companies despite having seemingly responsible leaders and strong value statements. And reactions from new management, social commentators and external regulators are strikingly similar: new regulations, new compliance tests, naming and shaming, financial reparations, new value statements, more ethics training and exams and personal attestations on systems and compliance. And yet we wait for the next scandal.
Can we not break out of this dismal view of the world of business and people within business? We can, but only if we reframe consistently the role of business within society, if we re-examine the connections between purpose, performance and profits, and if we look to the best values in society to be the values of those in business. This will help to rally the good people in business who can feel discouraged from promoting change by a sense of hopelessness, which is in part induced by the constant antipathy and mistrust they face from society.
A simple proposition that needs to be more widely acknowledged is that business and society are interdependent. In short, you cannot have a sustainably successful business in a failing and suspicious society; meanwhile, business has the skills, resources, depth and breadth to help tackle many societal problems. To make the most of this relationship requires mutual trust between the business world and society around it.
Another simple proposition is that people are at the heart of both business and society. So how do we respond to the human person and their desire and need for a higher purpose and social relationships to restore and build on that trust?
A final proposition is that positive change needs to come from within businesses themselves. Although external forces – including rules and regulations – may be part of the package, the highest ethical standards that are required to genuinely restore trust will come only from those who see rules and regulations as minimum standards of acceptable behaviour.
At this point I could invoke studies to show that the best companies combine a financial return with contribution to society and the highest ethical behaviour. I could point to leaders who espouse both the connectivity of business performance with societal impact and how well their companies prosper. I could indicate studies that show that focus on a purpose that embraces responsibility to society brings superior financial return. I could quote investor studies that indicate that changing management away from a poor observance of values leads to a boost in share price. I could name books and academic studies that prove that commitment to a higher purpose creates a better sustainable financial return, and studies that show that focusing on inspiring and coaching people will improve long-term financial health. They all exist if you look for them, but I would offer them as supporting evidence rather than being the reason for change.
If we want to change the language and orientation of business, we cannot start with evidence of increased profit as proof that such a shift is worthwhile. The key transformation is about purpose enabling profit and not profit as the purpose.
So how do we get there? I offer these ingredients. Let’s start with people and motivating them to live by the highest ethical standards. – as a citizen, as a consumer, as an employee, as a leader, as an investor and as a representative of others in society. Let’s recognise business as a platform to make a positive difference in society but also recognise it as a community of people who need to be nurtured. Let’s recognise the complexity of the world, the multiple decisions people need to make amid competing interests. Let’s recognise the mistakes we will make, the support we will need to learn from those mistakes, and the fact that no system is so perfect as to remove the obligation to exercise human judgement, responsibility and accountability. And let us also recognise that people do bad things, but temper that with the best advice I was given recently: “Many times people do bad things because they have convinced themselves that it is a good thing. Our job is to expose that flawed thinking and expose them to thinking that can make them understand what good really looks like.”
One final thing: what about a tool to help them? For the past 18 months I have been working with the Blueprint for Better Business initiative set up by the Archbishop of Westminster, Vincent Nichols. It aims to develop a tool in the form of a set of principles that is independent of business but of value to it, that could help to reconnect business and society, and personal and corporate values. It draws on traditions of philosophy – specifically Aristotelian virtue ethics – and is consistent with other faiths. Catholic Social Thought underpins the whole. This allows the principles to be presented in a way that is accessible and useful to all, because they are consistent not only with other faith teachings but also with a sense of what is good drawn from non-faith sources.
What has emerged is a concept that offers an alternative to disconnecting purpose from profit and assuming that regulation and intervention are the only answer to misguided companies and behaviours. It has been energising and inspirational to work with both businesses and representatives of wider society to build something that offers an alternative language and orientation, where profit and purpose are not competing alternatives but are joined together.
The project calls for organisations to define their purpose in terms of respect for people and contributing to a common good, and to be true to that purpose by aligning growth, profitability, products and services. It encourages organisations to build people of character and judgement who can live out their firm’s stated purpose and keep it true to that purpose. Leaders must to be prepared to challenge themselves on their performance in this regard and have the courage to ask peers to review their progress on this journey. In return for greater transparency, commentators should allow businesses to learn from – but not be held hostage to – the past and to be challenged constructively on their current actions and future commitments to improve.
More work continues to be done, but I am confident that the guidelines that have come out of the Blueprint initiative will provide practical help for people in business to be more fulfilled – and thereby successful – and rebuild trust through a conscious purpose to help business and society prosper together.
This article is reproduced here with the kind permission of the author. It was originally published in The Tablet on 26 October.
About the author
Loughlin Hickey is a former global head of tax at KPMG and is a member of the working group for the Blueprint for Better Business initiative.