I was at the Trust and Reputation Conference in London last week and posed this question to a panel of senior business leaders: “Given there are numerous studies that prove that focusing on people and the environment (being heartful in our language) is more profitable in the long term, how come so few businesses do it?”.
Stephen Howard, CEO of Business in the Communities responded immediately with three reasons. 1. Its too hard. 2. Shareholders and customers don’t reward me for it. 3. I won’t be in the job long enough to get the returns. As someone who meets lots of business leaders and is encouraging them to be more community minded, I feel Stephen is in a great place to judge this.
Let us look at each of these:
- It is too hard: Unless you are totally committed to this journey, then yes it is hard (see my blog on leadership three weeks ago) Action needed: Inspire more leaders that this is a better way of being – for their companies, for all their stakeholders, for the world as a whole. Just as well that is part of our mission at Heart in Business Limited.
- Shareholders and Customers don’t reward you: Regarding customers, at times I fully agree especially when I see some of my customers (who I know value what we do) shopping at less ‘ethical’ retailers. I then I remind myself that it is up to us to go deeper into what we do, to live and breath it so customers cannot help but notice. There are examples of companies who have a great ‘caring message’ like Ben and Jerry’s, Innocent or Green and Blacks who have got customer credit for their approach (although all are now part of major multinationals). Action needed: Be clear on what you stand for and make sure to let your customers know. If you do this properly and consistently over time, they will reward you for it. And then there are shareholders, the area that probably needs the most action. This issue arose time and time again throughout the conference. And while pension funds are the largest shareholders of most companies and in theory have a natural interest in long term returns, they seem to be just as short term as the most ruthless venture capitalist. Personally I feel this is partly as a result of the ‘immediate gratification’ society we live in and is fuelled by the media with their ‘hapless CEO’ type headlines. Action needed: Get the evidence on the positive impact of heartfulness in front of shareholder organisations. Who and when is an unanswered question, however, one I am sure will become clearer in time. The publication on my book, “How to put the Heart back into Business” (next year) will help.
- I won’t be in the job long enough to get the returns: This is linked to the above in that it is again about short-term thinking. One organisation that seems to transcend both these points is Unilever. Their CEO Paul Polman (who has been in that role for 7 years) has built on their history (as one of the original Quaker companies) of caring and has taken it to the next level. He has taken his shareholders with him and is still in the job to see the returns. To me this proves that it is possible to be heartful and still hold a CEO role in multinational. Action needed: Learn from Unilever!