Panel discussion on Blueprint for Better Business and why it is important that businesses have and operate to a clear social purpose – from the application of purpose in a large company like Unilever, to the future risks to the world of capitalism without purpose driven businesses.
The panel was chaired by Jo Confino – from the Guardian and Guardian Sustainable Business.
Dame Barbara Stocking – Blueprint Trust Trustee
Cardinal Vincent Nichols – Archbishop of Westminster
Paul Polman – Chief Executive Officer, Unilever
Rebecca Henderson – Harvard University Professor
A brief synopsis of the questions and answers follows.
Q: Barbara, Blueprint for Better Business – what is it and why do we need it?
A: Business can and should have a social purpose. Trust in business has gone down so businesses need to have and demonstrate a social purpose in order to gain legitimacy. “It is important for employees to give meaning and the ability to make a difference in what they do.”
Q: And what do you think the gap is between that ideal and where we are now?
A: As is evident from the recent reporting of tax issues, we are very far from this. Some countries have little to no regulations on tax and it is important for companies to not exploit this. A company with a social purpose does not need regulation to force it to be a good company.
Q: Archbishop, what have the teachings of faith got to offer us? What is the relevance of faith to this debate?
A: Faith helps us understand our humanity and “if we can bring the best of our humanity to our corporate efforts then those efforts are more successful and more satisfying”
Q: Why do you think business has strayed? What’s gone wrong?
A: There are temptations around us all the time that can deflect us from what we know is for the best. Blueprint for Better Business helps us to question what we really want to achieve for the good of society, for the personal good, for the good of families and help distinguish between greed and doing good.
Q: Paul, how does this translate into a global company like Unilever?
A: The current business environment is very challenging, with a lot of pressures on business people and CEO’s. What we really want to do is find a business model that is sustainable and will ensure our companies are alive for the long-term. “The best way to do this is to ask yourself, ‘why are you here?’. You’re here first and foremost to serve society. The Blueprint for Better Business puts this right at the middle”. If you take each of your multiple stakeholders into account then you arrive at this business model, a business model that is in sync with society. “if you myopically focus on one of your stakeholders and sub-optimise the others then you will ultimately be rejected.
The beauty of the Blueprint for Better Business is that it takes a holistic view of how do you, it’s a challenge, but how do you move your business model forward by taking everyone into account”. It actually takes risks out the equation by building things into the business model that mitigate factors like climate change or geo-political disruption. It takes costs out of the system, as we hit planetary boundaries business leaders need to think about their supply-chain before the situation is too dire.
It also spurs innovation and creativity because we look at the problems of this world and we think how our products and services can solve these problems. Problems such as food security, sanitation and employment are still big problems but they provide opportunities to business to solve them and at the same time grow ones business.
“It is incredibly motivating for the people who are directly connected to this business model either our own employees or all the suppliers and partners that we work with to do something that has a longer term and deeper meaning than just making money. As I have always said, it is important that business makes profit but it is not the purpose of business” and the “Blueprint for Better Business helps us have these conversations that drive us to higher levels”.
Q: If we take one sector, the finance sector. There is still a lot of anger in the world that this sector seems to have lost its sense of purpose. What difference would we see if we applied Blueprint for Better Business to this sector?
A: The trust levels are incredibly low across all sectors, across politics, business and for CEO’s. Blueprint for Better Business can bring us all together and ask; why are we here in the first place?
Unilever has set up the Banking Environment Initiative that looks at lending practises to sustainably sourced products. We need to transform the financing for the poorest in society, this has been helped by the various micro-financing initiatives that many banks have got behind.
The banking sector has been removed from society but we need to bring them back to what it was originally – which was a means to an end. This needs leadership from the top of the financial world but it also needs embracing from the rest of society.
It is also great to see enormous traction from the financial sector to be a part of the Blueprint for Better Business.
Q: Rebecca, you teach at Harvard ‘reimagining capitalism’. Is the idea of purpose at the core or on the side-lines of re-imaging capitalism?
A: Thinking about purpose is absolutely central to reimagining capitalism for three reasons.
Firstly because firms that are driven by purpose are more productive, more engaged, more creative, more far seeing and this strengthens individual companies.
Secondly, although it does strengthen companies there are temptations to fall back to the old ways of behaving. An initiative like the Blueprint for Better Business is so important because it can aide a shift in the accepted way of behaving towards purpose-driven business. This creates a community where companies can hold each other to account. We know from all kinds of work that if everyone around me behaves a particular way then it is easier to behave in such a way oneself.
Thirdly, we need to build a capitalism where purpose driven firms are the easiest and best ways to run any organisation which requires institutional changes.
Q: That’s the positive vision for the future. What is the risk if nothing changes?
A: “We see an increasingly fragmented world where the rich barricade themselves in enclaves extracting from the rest of the population and environment the resources they need to keep themselves going. It will be increasingly unjust and increasingly violent and increasingly no fun to be a business person in”.
“Every great business person I’ve met doesn’t really care about wealth. They want to run a great institution that makes a difference to the people around them and that’s going to get harder and harder to do in a fractious world, in an environmentally stressed world, in a world where a third of the population is having trouble eating and getting by.”