What does it mean for business to deliver value by serving society?
Blueprint argues that business is part of society and should deliver value by contributing to the common good. Our Blueprint Framework sets out what we mean by this:
What is ‘value’?
Value includes economic benefits but also the enhancement of human life through worthwhile work, the enrichment of life through productive human relationships formed when people are seen as a “someone not something” and the social value created by the goods and services produced and distributed. ‘Delivering value’ in our view means encompassing all of these.
A business, therefore, creates value for society (contributes to the common good) through for example:
- The development of its employees
- The enhancement of the lives of its customers through good products and services
- The support given to society through paying taxes and being a good corporate citizen
- The support given to other businesses for example through dealing justly with suppliers
- Supporting the development of business sectors through industry associations
- Providing competent people to take part in public enquiries, royal commissions and so on
- Financial returns to investors, which includes funding our pensions
Not all of this value for society can easily be quantified, but it is a real and vital part of what a business does.
In his 2020 Reith lecture series, How do we get what we value? Mark Carney explored this topic and asked why we have come to esteem financial value over human value and moved from market economies to market societies – and how we might turn this around.
Goods and services that benefit society
Promoting the common good includes asking:
- Are the goods we want to sell truly good, or do our services truly serve?
- Should we be seeking to profit from products or services for which people will pay but which we can see do not really serve them and the wider society of which they, and we, are a part?
For more on how to think about this see the section below.
Profits should come from goods and services that benefit society as a whole – and not from using society or stakeholders as a mere means to business success. As Colin Mayer in his book Prosperity, defines purpose:
Profitably solving the problems of people and planet, and not profiting from creating problems.
Regulation, compliance and trust
Society and communities of people determine the license, and freedoms, of business to operate and grow. When businesses act in a way that harms people or planet this undermines trust in business, leading to increased regulation. This in turn creates a compliance mentality where businesses can assume that remaining just inside the letter of the law is all that is necessary, leading to more regulation.
If business actively seeks to reduce harm and produces goods that are truly good and services that truly serve, this creates a different dynamic where trusted relationships can be built, which in turn contribute to the common good by creating fair and efficient markets which are both better for business and for society.
More than ‘responsibility’
In recent decades many businesses have sought to be ‘responsible’ or sustainable businesses through reducing harms or invested in corporate social responsibility initiatives to benefit local causes or local communities in an attempt to ‘give back’ and engage their people in worthwhile causes. These are important and welcome changes. But they have usually not challenged the fundamental assumption that the purpose of the business is to maximise profit.
What they have done instead is to bolster and enhance the reputation of the business to continue through demonstrating its credentials in a range of areas. The split in thinking is symbolically clear in the fact that many companies produce separate sustainability or responsibility reports alongside their statutory report and accounts. But there are also good examples where companies are seeking to integrate these elements more fully.
The shift to becoming purpose-led is fundamentally about what drives and gives direction to the core business. Profit becomes one outcome and not the purpose, and the business seeks to build and sustain relationships founded on dignity and mutuality, and to use its agency in the wider system to advance collective goals. Acting responsibly and sustainably are both important aspects but are now integrated into a single unifying idea.
Innovation and collaboration
Each company will have a unique purpose and will be able to contribute to the common good in a different way depending on the nature of their business. As well as playing their part in helping to shed a light on the problems they have contributed to, they will seek to innovate to reduce these harms and have a positive impact. They can also work together with other businesses, governments and regulators as appropriate, to respond to the huge societal, global and individual challenges we are facing such as climate change and social inequality.
A common good is something shared in collaboration
We each have individual needs and are interested in satisfying them, but we also share goals, needs and objectives in our relationships with others. Our relationships and friendships are not governed by contracts and trade-offs, or just by how useful they are to us in gaining what we need individually – although that is a part of what they are. First of all, they are mutual, developmental, oriented towards creating a shared good between us in which all the participants share. Friends for example each benefit from their friendships, these friendships either exist between friends or they don’t exist at all, and only on the basis of their shared friendship do the two friends gain individually from it.
When we are dealing with each other in business we are creating a common good together – we work towards genuinely shared objectives to create something that cannot be easily divided up, from which we all gain something individually, but, more fundamentally, from which we all gain together. It is only by building the shared, common good of the business itself, which we can only do together, that we can then all benefit from the business individually (in terms of income, dividends, better prices and so on).
Businesses have the ability to form but also to de-form people
The role of business also includes the formation of people and development of character. Businesses can help people realise their potential and help them to develop, they can form but also de-form people. This is discussed in more detail in: The role of business in helping people realise their potential
Podcast [listening time 20 minutes]
In this podcast, Helen Alford explores further what we mean by good and by the common good.