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I
recently had a discussion with a senior executive who was considering
accepting a key leadership role, with a sustainability focus, at
a major company. She wasn’t sure she wanted to work for a
large company again. “Maybe I can do this for a few years
and then do something with real value to the community,” she
said. “I want to pursue my passion for social change so I
probably should be working for a non-profit.”
We have deeply ingrained views in our society about the respective
roles of types of institutions. Companies make money, NGOs advocate
for the social good and governments set the rules of the game.
It’s time we challenged these assumptions. They are holding
us back from opportunities to advance the corporate sustainability
agenda.
Think of the language that we use: “for-profit” and “not-for-profit.” We
use these terms laced with meaning and assumptions about core motivation. “For-profits” exist
for the pursuit of financial gain, while a “not-for-profit” exists
for some more noble cause.
Of course profit and growth are huge motivators for companies and
this “self-interest” heavily influences their behavior.
But NGOs also legitimately pursue “self-interest,” and
while the goal may not be personal financial gain, it is still
a powerful driver of behavior.
Some argue that a company will always pursue shareholder value
and, therefore, can’t be trusted to deliver on the broader
social interest. But is that fundamentally different from a NGO
pursuing its own organizational interests? Yes, companies need
to deliver a return to shareholders to stay in the game. But NGOs
need members and donors to survive, so they act in ways that keep
these members and donors happy and supportive. And politicians
will almost always act in ways that satisfy their constituents
so that they can stay in power.
We all rail against self-interest in others while we pursue it
ourselves. Companies say NGOs are conducting one campaign or another “just
for the profile” or “just to raise funds” (with
the irony lost on them of a company attacking someone for pursuing
financial gain). NGOs claim companies are pursuing a strategy “just
for profit” (thus arguing that the motivation determines
the legitimacy of the behavior). We all attack politicians for
pursuing political self-interest (as though behaving in a way that
gets the support of the people who put you there is somehow distasteful,
even though it’s the underpinning premise of democracy).
In my view, the issue is not the structure or ownership of the
organization. Certainly, organizational form—whether it be “for-profit,” an
NGO or government-owned—heavily influences behavior, but
it does not determine it. What ultimately determines behavior is
people and their values. So there are companies that pursue social
interest and there are NGOs that pursue narrow self-interest and,
of course, companies and NGOs at all points in between. We need
to focus less on the “form” and more on the behavior
of the people involved.
Why does this all matter? It matters because our view of organizational
types leads us to ideological positions rather than analytical
ones. We may feel comfortable and self-satisfied when we attack
the motivations of other organizations, but it leads us to a lack
of rigor in judgements. The result is simplistic views about important
and complex issues.
We need to assess organizations of all types based on what they
achieve and how they behave, not how they are structured. By doing
so, people with a passion for making the world a better place will
begin working where they are most needed, regardless of whether
it is at a company, a NGO or a government.
We need people, like the corporate executive above who wants to
pursue her social change passion, to do so in the corporate sector
if that’s where the need is and their skills suit. We need
people to do so because we need corporate executive teams to champion
these views front and center in their internal discussions about
their business plans.
Additionally, companies need to attract these people for their
own self-interest because our executive above is not an isolated
case. Many business school leaders tell me that the best and brightest
talent coming through their ranks put far greater emphasis on the
values—and the social value—of their future employers.
Given the current war for talent between leading companies, attracting
the best people now requires companies to know what they stand
for and what social value they intend to deliver to society.
By the way, she took the job and is now mobilizing a multi-billion
dollar company to help her change the world.
Paul Gilding (paul.gilding@ecoscorp.com)
is the founder and CEO of Ecos Corporation, which provides strategic
advice to corporations on how to create value through sustainability. |
