Business integrity: challenges and solutions
Peter N Lewis, Founder and Lead Consultant at Principled Consulting and Tania Ellis, author and business innovator, shared their views on moral challenges for the economy and their visions for future business principles at the Caux conference for Trust and Integrity in the Global Economy on Wednesday.
‘What are the top reasons for the lack of trust and integrity in global economy?’ was the introductory question. In Lewis’ eyes they are lack of care, lack of competence and lack of fairness. In Ellis’ opinion the deficiency is due to the fact that our world has grown smaller and, consequently, the awareness of imbalances in the world, and business’ contribution to those imbalances, has risen. She identified the divide between profit and purpose, where profit is a means and an end in itself, as a second reason.
In conversations with business-people, Lewis typically asks four questions. Firstly, if they think that they are doing the right thing in the business. Most people will say yes. Secondly, if they do it the right way. Generally they think they do. Thirdly, if they do it for the right reasons. This seems to them the more difficult question but leads to the point where they find the right reasons. But asking the forth question changes everything: ‘What are you doing based on the right moral values?’ In fact, if you answer the first three questions with ‘yes’, this basically means that you are heading towards an authoritative regime, Lewis says, since the notion of ‘right’ in the three first answers was not based on moral values.
According to Lewis, recent surveys show that business-people measure moral values differently at home than at work. Whereas they value ethics at work, they are assessed much more stringently at home. Thuse, he suggests, that people know what is right and what is wrong, but that they often forget on the way to work.
Ellis stated that the time has come for new business models. This is due to outside and inside pressure. Outside pressure comes, for instance, from increasingly conscious consumerism, tightening legislation and the changing investment environment. Inside pressure emanates from employees asking more questions about the reasons for production, as well as from social media, which increases awareness. Thus, there is a general shift towards social responsibility. Additionally, Ellis sees a growing number of social entrepreneurs, whom she considers being pioneers on the pathway to more sustainable business models.
The ambiguity of the development becomes clear when Ellis described the example of Body Shop. Starting off as an idealistic enterprise, it has now been sold to L’Oreal. Does that mean that they stopped being a social enterprise or does that mean that they will be changemakers inside that big company?
During the financial crisis, the critics and promoters of Corporate Social Responsibility were holding their breath. The critics had insisted on Corporate Social Responsibility being a philanthropical add-on, which would be the first thing to be cut down in hard times. Promoters believed that, in a tougher climate, the sustainability of those enterprises would be proven. Ellis notes that both were right: The enterprises which had donated to random organisations for the sake of ticking the ‘I-am-philanthropical-box’ had abandoned those projects, but companies with an integrative approach came out of the crisis stronger.
Regarding values in companies Lewis notes that 50% of corporate values are desired outcomes rather than actual moral values. In addition to that, he finds that workers rarely know the content and significance of the words describing those values. This is the first point where change is needed: increased awareness of corporate values.
Ellis provided examples of companies which work with newly defined values. For example, an IT consultancy in Norway which works with zero financial goals and bases all its activities on two core values: competence and empathy. Even during the financial crisis it grows 20% every year. At the same time, Lewis noted that it is hard for enterprises born in the old system to shift their focus.
Following the motto of Caux, ‘change yourself to change the world’, Peter Lewis insisted on the necessity of ethics of care: ‘People don’t care how much you know until they know how much you care.’
Ellis concluded with the story of her friend who managed to transform a Danish island into a carbon neutral community which even exports 20% of its green electricity. When he talked to an Arab the latter laughed in astonishment – ‘this is two housing-blocks in Dubai’, he said, implying that this kind of project would be senseless in a highly populated Arabic country. The reply was simple: ‘Well, this is probably where you should start.’