Beyond 2020: Sustainable Enterprise

In part 1 of our Beyond 2020 series, we look at how enterprises need to evolve to become more sustainable and socially responsible, and consider what this means for leaders.

Part One: The bigger picture of change
Our view is that today’s answers are very different to yesterday’s. A sea change is in motion. Here, we pull together some strategic strands towards a focus on what you and your organisation could and, perhaps, should do to get in shape for the long term.

Beyond 2020 organisations should expect to…

• To play their proper part in our changing world, enterprises must be socially useful as well as socially responsible. They must help people lead better lives.
• Doing so makes good business sense. Not doing so increasingly incurs reputational risk.
• Most enterprises will need to re-think “what we’re really here to do”. Some form of cultural transformation will then be needed to make it happen.
• Authentic leaders, who can identify with a high moral purpose that guides their own conduct and decision-making, are more likely to succeed in creating socially useful enterprises than those who cannot.
• Leadership of that kind requires a combination of deep self-awareness and the exercise of skilful management practice over a long period.
• None of this is easy, but all of it can be done.

“There is tide in the affairs of men which, taken at the flood, leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea we are now afloat; and we must take the current when it serves, or lose our ventures.” (Julius Caesar, Act IV, Scene III)

The World, The UK And You
Sixty years ago the world’s population was 2.6 billion. It is now 7.0 billion. Only 10 years ago, global socio-economic power and influence rested firmly with North America and Europe, now it does not. An old order is yielding to another. Our world is more dynamic and less sustainable than ever before. Few, if any, of us is immune to, or isolated from, the impact of these mega-trends.

Some continents and nations are winners, others are not. Britain is one of several countries that finds itself economically challenged by low/ no growth, fierce international competition for raw materials, goods and services, the uncompetitive nature of much of its national infrastructure and unsustainable levels of national borrowing. It is socially challenged by the growing unaffordability of our welfare and health systems, lack of jobs, an ageing population and the creation of a relatively uneducated, poor and unemployed underclass. For at least the next decade, may be a lot longer, we are probably going to be poorer economically.

No-one we speak to wants this situation to pertain. Nearly everyone wants things to be better. Few, if any, believe government will do it all for us. Rather, as leaders, we have our own part to play, even if we’re hazy about what that is. We recognise that most of the choices we face are dilemmas, that none of the options is wholly attractive or easily achieved.

If creating wealth and using it wisely is part of the solution, then mobilising our collective talents and resources to help create greater, sustainable prosperity seems one obvious strategy we should implement. The question is: what kind of commercial, social and public enterprises will make a lasting difference to our prosperity; and how can we mobilise to build them?Ideally, the kind of enterprises we help build and work for will fundamentally improve our socio-economic condition by generating sustainable prosperity.

Successful enterprises are already supporting people in their quest for better lives. They are moving from value chains to value cycles, that achieve prosperity and growth by enabling improvements in the welfare and capability of their customers and of the environments they live and work in.

A regionally-focused building society believes passionately that its members’ interests are supported by it playing an active role in promoting the prosperity and well-being of the community it serves. Social housing, that enables lower paid people to live close to their work, is one of that community’s most demonstrable needs.

The society has joined with local groups and government to build several hundred affordable homes on a derelict, urban site. That commitment will enrich the community it serves and reinforce the relevance of its brand. It is, very literally, good business.

Enterprises like this one are working authentically from a guiding philosophy that informs activity and stimulates creativity. They are seeking to make a difference by playing proactive, leadership roles in the societies and communities in which they operate.

In their 2012 “Top 25 corporate reputations” survey of 40,000 consumers in China, Brazil, Germany, Japan, USA and Russia, Burson-Marsteller et al concluded that: “In short, good corporate citizenship really is good business….in an increasingly transparent, world, isolated programs and insufficient, insincere commitment will undermine, not build, corporate reputation…..Put simply, a brand is what a brand does”

If that’s true of international consumer markets, then there is also plenty of evidence that talented people are attracted to working for organisations that demonstrate an innovative approach to good corporate citizenship, even if the organisations themselves are not so good at communicating what they are about.

The information and social networking revolution, catalysed and supported by mobile, web-in-hand technology, ensures that even small pieces of news that can affect an organisation’s reputation spread quickly, in ways that are not susceptible to traditional management techniques.

Consequently, the best approach to earning a reputation as a great organisation, that people want to deal with and work for, seems to be a combination of:

• Doing the right things well, day after day, week after week, year after year; and…
• Operating with sure-footed agility when the opportunity or need arises.
• This consistent, sure touch needs the kind of authentic leadership that can only be sustained by embedding a culture that connects the organisation’s head and heart to its moral compass in such a way that “doing the right thing” is sine qua non.

2020 Leadership
If the key components of leadership are to be mindful, give hope and show compassion, in the context of emerging 21st century corporate citizenship it seems to us that:

• Mindfulness has, at its core, a well-informed awareness of the impact our organisations and ways of doing business have, not just on those who interact directly with them but also on the wider world.
• Giving hope is not only about showing how our organisation can deliver benefits to its direct stakeholders but also about engaging constructively with other parties to help shape and deliver desirable, sustainable outcomes that benefit the societies and communities to which it belongs.
• Showing compassion is more than about giving something back. It stems from a fundamental understanding that our organisation — any organisation — has a duty to care for the wider socio-economic systems of which it is a part. It must be socially useful and seek to do as much as it can rather than as little as it can get away with. It belongs, cares and therefore acts accordingly.

2020 Leaders
A generation of leaders is emerging that embraces these challenges very differently to those who went before them. They are finding ways of operating in a 24/7 world of multiple time zones characterised by contending professional, social and personal priorities, which can place unsustainable demands on individuals that become stressful when they conflict with personal values.

These leaders have at their core an attitude to life that resists, more than previous generations, work taking over everything else. Yet they are highly effective. They are accomplished users of modern technology that they exploit to organise their lives. They tend to work in organisations whose can-do cultures support and facilitate flexible working arrangements: they, in their turn, sustain them. They travel easily between different cultures and geographies and see things from an international perspective. Although leaders like this are still in a minority, their example is indicative of a growing cadre. Generation Y is coming of age.

We Do This Already….Don’t We?
Does mobilising enterprise in this strategic way require organisations — private and public, yours and mine — to re-think their core purpose, goals, operating principles and business practices? Does it require their leaders to re-define what they are there to do? The short answer, for most of them, is “yes”, at least in part. For example:

• To become a good 21st century corporate citizen requires many organisations to re-interpret what citizenship really means and how that will be tested in courts of public opinion. Increasingly it is about embodying the spirit of what society is seeking rather than complying with the letter of the law, as recent debates about the UK Corporation Tax paid by well known companies such as Amazon, Google and Starbucks illustrate.
• This model of citizenship informs not only the roles and goals of corporate leaders but also the sort of people they should be. A wide range of stakeholders is increasingly influencing who is fit to lead major organisations, such as Barclays, as they assert new corporate values.
• There is then the challenge of how to retain a strong focus on the outcomes you most want for your organisation and yourself such that a series of tactical decisions, each sensible in its own right, does not lead it, or you, to a very different place than the one you wanted to get to. Who wants to end up beached, wondering, as so many people do: “How did that happen?”

In part 2 of Beyond 2020, we explore approaches to mobilising enterprises to build the scale required to improve our socio-economic condition, and what this means for the way we approach leadership and collaboration.

About us: Praesta Partners is the UK’s premier firm of executive coaches, based in London but operating both nationally and globally. We coach senior leaders and executive teams in several hundred organisations in the private and public sectors, including FTSE 100 and 250 companies, private equity owned businesses, leading professional services firms and all areas of financial services.

All members of Praesta’s team had senior level business careers before becoming coaches. Thorough initial training, continual professional development and regular supervision are integral to how we work. As well as one to one coaching, we conduct team coaching and board effectiveness reviews.