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Posts Tagged ‘companies’

 Is to make money right? Absolutely yes, but let’s not kid ourselves – there are rules. It’s not as if you can just do what you want to do. The “free market” might sound like a pretty neat idea but that only exists in theory. If markets were truly free we wouldn’t have all the subsidies, incentives, trade limitations etc that almost all companies benefit from or lobby for in some or other way. All markets are regulated to ensure that they serve a purpose. A social purpose that goes beyond shareholder gains only.

Do companies seriously want to debate this? Then give back your subsidy. Drop the demands for more favorable trade rules. Your business is about making money within a set of rules. Live with it even when all those rules don’t slap you on the back and give you money.

Some rules are written into law and you have to comply to them. But some rules are unwritten – the social contract you have with society as a whole.

Let’s put it in another way. We have laws regulating individual behaviour. These laws did not come from nowhere. Before they became written law, they were the unwritten rules we had as a society to organize ourselves and somehow get us to live in some sort of pact – harmony being a dream only. Before we wrote down a law that said – don’t kill, murder etc – we had that as part of the societal contract. It was a societal contract governing our behaviour. One that organized how we lived with and amongst each other and the roles and responsibilities each of us had towards each other and ourselves. We “gave up” our freedom to pillage and burn to gain from living with each other. A societal contract that defines and creates society. One that helped us move forward as a specie instead of going off driving individual gain only. There are and were many of these societal contracts to help drive cohesion. Stealing, murder, property rights, trade etc.

It’s the same for business. There have been unwritten rules of engagement – the societal contract to ensure that they serve a broader positive societal role and not purely out for personal gain. For example – Rule one, don’t sell me snake oil. And eventually that made it into law. Don’t sell me food that will kill me. That eventually became law. All of these regulations are there to underscore the societal contract that existed before the actual law was written.

And like any law, it became more complicated the longer we lived together as a society. Those who don’t value the societal contract will try to find new ways to break it to stay within the written law or even change the written law. But because they are breaking the unwritten societal contract, we need to rewrite and bring in new written laws. Take killing for instance. It was pretty simple, you shouldn’t kill someone else. Well, what happens if it was by accident? Or in self-defense. Oops, let’s expand on that law a bit. And it becomes more complicated each day as people and companies try to find new ways to break the societal contract by finding ways to undermine the written law. (I wonder if these ‘complications’ with writing the societal contract into law were the first example of lobbying as well?)

Business cannot just operate the way it wants. It serves a societal need whether it is bringing the goods we need to us via a retail shop or provide us with the fuel we need to keep us warm or just get around. It does not have the freedom to do what it wants to do for the sake of itself. It must serve a purpose (real or perceived – thank you advertising) and play within the written and unwritten rules. You can’t exploit workers for the benefit of your bottom line. You cannot dump toxic materials into the water streams used as drinking water just because it is better for your bottom line. You can’t knowingly sell a product that will kill people even if it does help your bottom line. You can’t lie to people about what your product does just to increase your bottom line. You can’t use your bottom line as the sole reason why you do something – legal or illegal. That bottom line is not always in the interest of the bottom line of society – to live and prosper.

The unwritten rules and social contract with society is based on trust. People trust that you will do the right thing. It’s why people tend not to like government regulating behaviour – it not only creates the perception that it limits freedom but it goes against the principle of trust. And, of course, government will argue that these laws are there to serve the societal contract and ensure (consumer) protection from those who refuse to work within the spirit of the societal contract. The societal contract is based on trust. But lobbying behind their backs to “get away with it” because of greed or any other reason breaks that trust. The trust is broken when companies lie about their impact and when their impact is not beneficial to society – today or tomorrow. Especially if the company does it on purpose – knowingly. When you break that trust you break the societal contract. Then you cease to have a reason to exist. It’s not in the interest of the societal bottom line.

So, the business of business is to make money but only within the confinements of the societal contract – written or unwritten. The next time you lobby for something that is in the best interest of your company or you hide your true impact or your falsely advertise the benefits or impact of your product or service, do ask yourself if you are breaking the unwritten contract that you have with society.

Do you serve a purpose that is beneficial to society? And please refrain from drinking the Kool Aid. Think before you drink. Consider the truth before you answer. Because you are also a member of our society.

The business of business is to serve a societal purpose. We love it when you make money while doing this and we see this as the reward we provide you because you are one of us and doing something good for all of us. Now go and have a purpose. A real one.

So the next time you use the line of “the business of business is business” or argue against CSR or sustainability – please think again. Your responsibility might lie with your shareholders but your licence to operate lies with us. The people. CSR and sustainability is our way of defining the rules for you. We don’t expect you to like it but that’s the way the cookie crumbles. Live with it. Implement it. Embrace it. Or maybe we’ll just have to revoke your licence.

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Can you remember the first time the two of you got together. The stolen looks, the uncomfortable moments of silence, the tripping over your sentences, the sweaty palms, the he-likes-me-he-likes-me-not thoughts, the private meetings when no one was looking, the uncomfortable first meal together. Yes, I am talking about stakeholder engagement. Just as with any relationship in the early wooing and courting stage, stakeholder engagement is never easy at the start.

Most companies just don’t know how to talk to activists and campaigners. Hey, make no mistake, activist hardly knows how to talk to companies either. But they don’t need companies to like them as much as what companies need them to like them. Or at least leave them alone and not target them.

Don’t feel bad when they target you. It happens to the best of companies. Sometimes it makes sense and sometimes not. I remember seeing an anarchist kicking a Nike sign at the battle of Seattle in ’99 – while wearing his Nike shoes and top…

But there are a few tips you should follow if you decide to engage and start courting. This is not an exhaustive list. Just a few tips to get you through those first uncomfortable early stages of stakeholder dating.

Firstly, do your homework and find out a bit more about the NGO and what it regards as its ‘bottom line’ – it is unlikely to be financial! I was invited to speak to the global affairs team of a very large pharmaceutical while I was at Oxfam (I headed up the Access to Medicine Campaign for a while). I was shocked to hear that the majority of people at the company thought that Oxfam only worked on health issues. And this happened when Oxfam was in the middle of their Coffee Campaign! Dig around a bit first and find out what the NGO does and what is their mandate. Most of them are registered with a constitution that states what they should focus on and how they should work. This will help you understand whether there is any potential for a longer term constructive relationship – or just a one night stand. Also a good tip when you start dating – know who you are dating. Except if you like blind dates.

Secondly, respect the differences between NGOs by not lumping them all together in the same room for a consultation exercise – NGOs are proud and competitive too. You wouldn’t want them to call a whole bunch of companies together and still expect special treatment just aimed at you. You should respect their differences and treat each one differently. Rather meet each one separately in an environment that works best to put them at ease. Meet them where they feel most comfortable – maybe at their place. Especially if you want to build the foundation for a long-term relationship. And even this should work best for real dates – don’t bring all your prospective dates together in the same room. They might just start sizing each other and you will be left with no date at all.

Thirdly, don’t make the mistake of thinking that you are the only company that is the target of the NGOs campaigning efforts, or that the NGO hasn’t other programs and projects that may have nothing to do with business. Just as with the large pharmaceutical company I mentioned, most NGOs have numerous focus areas and different programs and projects to try and achieve their overall goals. And most large campaigning NGOs have various campaigns going at the same time. They might have one single broad focus, but it plays out in different campaigns and programs. For instance, Greenpeace might be about the environment, but they focus on climate change, oceans, forests, genetic engineering and nuclear issues. So your company might only be a small part of their focus and interest. Same with real life dating. A friendly smile does not mean they want to date. It might just be a friendly smile.

Fourthly, start by talking, learning about each other and building trust rather than starting by expecting ground-breaking strategic partnerships. There might be a few obstacles to overcome – perceptions of what ‘big business’ is all about and a feeling that you want to ‘clean’ yourself by associating with them. Take it easy and just talk. Let them get to know you. Don’t create expectations. Just listen and learn and see where this might take you. Again a good tip for real life dating as well. Don’t ask them to marry you or expect ‘the commitment’ on the first date – it might just scare them off.

Lastly, remember that cash does not necessarily have the same currency as it does when buying products or services from other companies. First and foremost NGOs want to affect change. But they don’t always see money as the way to achieve change. Yes, some of them have huge budgets and operate like multinationals. But they generally have strict guidelines on receiving money from companies. For instance, Oxfam will not accept money from companies that fall within an industry they target in their campaigning. They might not even accept money for travel – never mind for a program. They would rather see you ‘do the right thing’ than pay them to do something. Okay, this one is less relevant for real life dating. Money generally impress prospective dates!

Okay, one more tip. Don’t expect them to agree with you on everything. And don’t make this a prerequisite for your potential relationship. I love my wife to bits. But we only agree 80% of the time. But we don’t let the 20% of the time we disagree define our relationship. No. Focus the relationship on what you have in common and don’t get stuck on the differences. It’s part of being human – we are all different. And the same for companies and NGOs – we are all different. And I learned that I am wrong 20% of the time in any case. Just ask my wife.

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I’ve always been sceptical about CSR rankings and ratings. Partly because there are just so many of them. It sometimes feels as if we have a ranking and rating system for every company. Just find the one that fits your needs and away you go! But this also underlines a deeper problem with rankings and ratings – is it even possible to have a ranking or rating system capture all the differences and diversity amongst businesses?

Citizen IBM had a good piece on how CSR Rankings Can Be Improved. They capture some of the key problems I have – from the needs to acknowledge the differences in industries to the need for continuous improvements to full transparency in the criteria used. But I don’t think they went deep enough – and I would like the scratch the surface a little bit more.

Firstly, as Citizen IBM mentions, the differences between industries should be acknowledged. But it goes deeper than purely the differences between those who manufacture and those who offer services. And it’s these differences that makes it even more difficult to take rating systems seriously. Let’s remove the obvious difference for a moment – let’s exclude for the sake of argument services companies and only focus on companies who manufacture.

Even within manufacturing the differences are just too steep to make a single standard rating workable. Most rating systems looks at the impact of the manufacturing process – environmental impact, workplace practices, financial performance,  governance etc. Most companies within manufacturing can be judged according to these, right? Well, just hang on for a minute there…

What most of these rating systems focus on, measure and rate are the impact of the process and not the impact of the actual product delivered by the manufacturing process. Let me give you an example, it is possible for a tobacco company to have excellent CSR practices in their manufacturing process and therefore rank better than say a pharmaceutical company. But the actual product delivered by the pharmaceutical company is vastly different than those from a tobacco company – the one contributes to the health of society and the other do the opposite.

Now it will be easy to exclude tobacco companies – and many do. However, the basic principle remains. The extremes are easy to differentiate – and we can exclude tobacco and arms manufacturers. But what about comparing the products of an oil company to a pharmaceutical company? How do we judge the end product and the impact of that end product? Especially when we start bringing in the idea of sustainability – leaving the future world in a better or no worse place. How do you rate a product that positions us better for the future against a company who serves an immediate need but at a high environmental and sustainability cost? How do you rate a software company who connects sustainable solutions to a company whose software is used for warfare? The differences in what the products deliver becomes complicated and makes comparisons complicated and almost impossible.

Even within a single industry it is complicated and problematic – how do you differentiate between an energy company that produces only oil to one that only produces solar or another “green” energy? And what about a traditional oil company spending more and more on alternative energy? How do you judge the future impact and value of the product or service?

The approach to ratings also undermines a key development in CSR over the last few years – finding the opportunity of mutual responsibility or shared value between the company and its stakeholders (or society at large). Companies are increasingly seeing CSR as a way to create new opportunities that will be beneficial to both the business bottom line and the needs of society. But the approach of rating systems doesn’t allow for this to be reflected because they focus on the impact of operations and not the business model and approach to CSR. You can (and will) therefore have companies who practice CSR the old way (ticking boxes, compliance etc) have a higher rating than companies who seek new ways to create product and service solutions that will benefit both society and the business itself. Too many ratings take a “tick the box” approach instead of looking at innovation, opportunity, mutual responsibility, societal benefit etc.

And it goes even deeper than that…

The drive towards a common standard has another unwanted impact – individual criteria might mean a company have excellent rankings on some but fail on others. Especially those areas where their major impacts are. Let’s say a company rates highly on governance, philanthropy, financial performance and the environment but their major impact is actually on human rights. And let’s say this company then operates in countries where child labor or forced labor are fine. The fact that they have great rating in all but one will most likely give them a good rating overall. But they fail in the area that matters most to their specific company as it intersects with society. Again, the standardization of ratings therefore fail to acknowledge the area of major responsibility and impact of the company.

That’s my biggest problem with ratings and rankings. They focus too much on the process and too little on the impact and value of the actual products and/or service delivered and those areas of major impact and responsibility. A single standard rating and ranking to compare all companies cannot capture these differences adequately. Rankings and ratings go for the lowest common denominator and fail to truly rate those who benefit society today and tomorrow and fail to acknowledge the differences in impact between different industries – or even different companies within an industry.

Frankly, I don’t rate ratings and rankings that much…

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No one likes taxes and we all pretty much find news ways to complain about our tax burden. Both left and right have their own issues. The left complains about too much taxes going to subsidize big companies or the military and too little going to social needs such as health care or education. The right complains that money going to government provided health care or unemployment benefits pushes up individual taxes and the burden on those who work. Where the money goes is just politics. What they do have in common is their universal dislike of taxes. And there is one tax that they all hate most…

Those hidden taxes. The little bits of taxes you pay each and every day. Taxes on stuff you buy. Taxes when you die. Taxes to fill up your car. Taxes to recycle. Taxes to use the park. Taxes to blow your nose. One hidden tax after the other. You don’t see it or notice it too much because there are so many of them hidden away in each and every corner. You do something  and you pay taxes. Little bit by little bit. But they are always there. Somewhere.

No wonder companies (and people) complain that these hidden taxes are just too much. They want transparency. They want to know what they are paying and when they are paying it in a more open and transparent way. Why not just have a flat rate on everything so we can know what we pay and when we pay it. They are just asking for the basic ingredient of CSR – transparency.

(Of course the underlying reason for this call is not only to have taxes be consistent and transparent but to also have a single source they can attack.)

Companies are especially vocal about their opposition to these hidden taxes. They complain that it puts them at a disadvantage over their foreign competitors. The odd thing is that all companies complain about this no matter where they are based… And they complain that they just have to pass on all these hidden tax costs to the consumer. A good way to get the average Joe on your side – tell them it isn’t your fault that you are charging them more than before… you are just doing what the government forces you to do, right?

Bad argument that one. Any cost a company takes on will be passed on to the consumer no matter what the reason or source of that cost might be. Pharmaceutical companies pass on the cost of finding new drugs. It doesn’t matter if the drug fails or not – you get charged for the failures. Oil companies pass on the cost of searching for more oil. You pay for the investment they make. All that makes perfect sense. It’s what companies do to find something new to sell us or keep servicing our thirst for new and more products. It’s business.

But companies also pass on failure that can be put squarely at their own feet. Years of bad decision-making at US car manufacturers? Guess who pays? Big oil spills? Guess who pays? A golden handshake to a failed CEO? Guess who pays? The consumer do. Companies just pass on those costs to the consumer in the same way they pass on every other cost. Companies will not make decisions that will pull them down. And rightly so. Companies target their bottom line and know what margins they need to keep investors happy. And if these margins get squeezed then they make “price adjustments” to cover their bases. I’m not saying there is anything wrong with this. That’s just how business works. That’s business life. But let’s be transparent about those costs. Business do not only pass on taxes to consumers. They pass on every single cost to the consumer. Until the consumer kicks back when the benefit of the product is surpassed by the cost they have to pay – then the business fires a few people and make a product or service “adjustment” or creates a new product that offer more value to that consumer. But that doesn’t happen as often though. Consumers tend to take a lot of punishment before they start kicking back.

That brings me to the hidden taxes that companies complain about but that they are more than happy to implement themselves. An article in the NY Times highlighted how hotels are expected to substantially increase surcharges in the coming year. Oh we know about some of those surcharges the same way we know about some of the hidden taxes – internet connection in your hotel room for example. But some are hidden away or in fine print that most travelers don’t know about and hardly have time to look into while on holiday or a busy business trip. For example, I don’t use the minibar because of the stupid prices they charge. But I didn’t know that some hotels even charge you a minibar restocking fee of $2.95 to $5.95 a day, once the first item is removed. Not only do they rip you off with the high prices but they charge you an additional fee to restock! It’s like complaining about high taxes and then being charged a few more dollars for paying those same taxes.

Of course it is not only hotels that do this. Almost every single company has these in one way or another. Pay up for your luggage please. Want to use the toilet? No problem – pay up. Want to use the ATM to pay for something? Here is another charge if you don’t mind. Oh, you actually wanted to get paid if you are sick? Some fine print in your health care benefits says you have to pay more. Want to access your money at the bank? Heck, they have different ways to charge you no matter what you do – teller, ATM or check. More taxes. More hidden taxes. These are the easy ones. The less well hidden taxes. The ones we can sniff out because some sparky manage to get upset enough about it when they had nothing else to do but go through the fine print.

I wonder how many hidden taxes are out there practiced by companies each and every single day. The little bits of fine print you know you can’t read because it isn’t written in plain English or a font large enough to read with your glasses on or you don’t have 72 free hours to spend reading the pages and pages of documents that comes with almost every single product and service you buy nowadays. They are out there. We just don’t know where or how much.

So… To those business who complain about hidden taxes. Please stop. Practice what you preach and then we can talk. Most governments are not transparent and neither are most companies when it comes to these hidden taxes. It’s life and the consumer will continue to pay. Let the consumer complain if they want. But please make sure you are “hidden taxes free” before you start complaining about government taxes – especially hidden taxes. Responsible companies are transparent about all the costs consumers pay – no hidden costs or taxes allowed. Make it simple. Make it transparent. Write it in BIG LETTERS and tell each consumer about these charges BEFORE charging them. Why don’t you write a document about your own hidden taxes so consumers can read this the way you read tax laws? Actually don’t because no average person can ever understand tax laws. Be better than the government and make it a short, simple and easily understood document and then we can talk. Transparency is not only about making information easily available. It is also making it easy to understand. And ensuring that people know about it. That’s what a responsible company will do. Or at least what they should do.

Maybe we can all do what the rich individuals and big companies do – find tax havens. Maybe we can find a few companies out there who won’t have these hidden taxes. Maybe then we can talk about transparency. But I won’t hold my breath looking for those companies. It would be like holding my breath for a government somewhere who will actually get rid of the hidden taxes. And we know that ain’t happening soon. No matter who is in charge…

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Nice to see that profits bounced back in 2009 for the Fortune 500. According to Fortune, “for 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that’s the second largest in the list’s 56-year history”. Nice. These last few years have been a tough time for most companies so this financial turnaround is good news for investors and for these businesses. Good news for everyone, right?

Maybe not for everyone…

Fortune also said that “in 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history”. Earnings up but jobs down. How’s that? Well, earnings might be up but actual revenue went down by 8.7%. What happened was that companies panicked when they saw the economy stuttering. Fearing the onset of a depression, companies raced to lower expenses even faster. “Producers practically panicked,” says Mark Zandi, chief economist at Moody’s Analytics. “They cut costs incredibly aggressively.” And by cost we mean that little line item accounting for two-thirds of their costs: labor…

So companies protected their profits by cutting labor. They cut costs not to keep the company afloat but to ensure profits remain high. One can understand that companies have to cut costs when the business is threatened. If they don’t then all jobs might be lost and the business pushed over the edge – shutting down or getting sold to the highest bidder. However, it is one thing to cut costs to make the company more competitive or to save a company but another thing to cut costs to ensure higher profits when everyone is struggling.

Is this really the way a responsible company should act?

So often we hear business leaders talk about their greatest asset being the people who work for them. They go on about how these people are the heart and soul of the company and that the company won’t be who it is today if it wasn’t for every single person working so hard. Loyalty by workers and the effort they put in to make the company succesful forms part of the bragging rights for business leaders – they take it to conferences, annual meeting, the media, their competitors etc. And they hunt hard to make the “Best Place To Work” list each year.

In addition, almost every CSR survey I look at shows how you treat your employees as the most important thing a responsible company can do. So, not only is it something that companies brag about but it is also something that the public view as the most important thing a company can do.

Can companies who ran up record profits therefore really be seen as responsible corporate citizens if they did this on the back of laying off workers during a tough time? Should the responsible company not stick with their workers during tough times and rather use the good times to gear themselves to be even more competitive? If business leaders truly believe that their employees are the most important asset of their business, should they not show greater loyalty to those workers during tough times?

What would a responsible company do during tough economic times? Would a responsible company push hard for higher profits no matter what or would a responsible company protect both their employees and the profitability of the company? Make not mistake, this is not an either or question. The Fortune 500 companies had more than solid earning – record increases. For many of these companies the choice was remaining profitable and protecting employees or drive profitability to new heights by laying off employees.

Many companies made the choice to drive earnings on the back of job losses. There is nothing wrong with that. It is a business model followed by many and one that holds the investor as the ultimate stakeholder. But, if this was the route you chose, please do not talk about your employees as your greatest asset again. Greatest assets are never left behind in tough times. Greatest assets are protected and respected at all times. It’s during the tough times that we can judge whether it was words or actions.

Or maybe you just shouldn’t panick the next time we have an economic downturn. Take a deep breath, keep calm and remain level-headed. This will pass and you should focus on how to turn a challenge into an opportunity instead of a panick picnic. Huddle together with your greatest assets and make them part of the solution. Heck, you might actually be able to find a few new assets as your competitors panick and drop their best assets as they run for cover.

It’s not about people or profits. You can have both and respect both. And be committed to both people and profits. Treat both as assets and be true to your word. That’s how you protect your people so they can help protect your profits – now and for the future.

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“Sharing is a special way of caring…” That line comes from that purple dinosaur – Barney. It was sound advice for my oldest daughter when she was still a little thing having her first baby crush on Barney. Barney helped us teach her that sharing what you have is a special way of showing people that you care. Unfortunately Barney isn’t that big anymore and we have to do most of this teaching all by ourselves when it comes to my little one. She get’s the message though as we pass along the Barney wisdom from generation to generation. But not everyone remembers this piece of wisdom. Especially not in these times when banks and other financial institutions are hit hard because of how they pay out bonuses.

Bonus payments will always be a tough nut to crack and will always leave someone unhappy. Each business is different and different people play different roles depending on the company in question. Sometimes it is a difficult pill to swallow when a “generic” senior executive receive a bonus that feels less grounded on the broader effort of everyone at the firm. But I have seen enough companies with dynamic leaders who make the difficult decisions, led companies into growth or out of difficult circumstances, and who owned up to their responsibilities to know that not everyone is truly equal in any company. Even though we would love to think everyone plays an equally important role in a company the truth is that some people play a leadership role for a reason and they should be compensated for that.

However, emphasis on compensation. Each person should be paid according to their role and responsibilities. Bonuses tend to be a broader reflection on how a company and specific department performed, the specific role that an individual played in that performance and how long a person has been with a company – performance, effort and loyalty. It should not be about one single thing – “My department did the best” is not a good enough argument for super bonuses if the company as a whole failed. That’s the problem most people have with the bonuses paid at certain financial institutions. Salary as compensation reflects the role and responsibility and bonuses tend to reflect performance, effort and loyalty (of course these three will also have an impact on long-term salary and promotions.)

What is a fair bonus? Like I said, each company and industry is different. And, to tell you the honest truth, the discussion here is really a theoretical one for me personally. I’ve never worked at a company where the bonus structure has been an issue. It’s always been fair and transparent. It’s also not something that has been a key issue for me from a CSR and Sustainability perspective. My questions from this perspective would typically be about transparency, governance, whether CSR/Sustainability goals played a role in establishing bonuses, how it impacts CSR/Sustainability, employee relations etc. Never really about the actual bonus structure. Maybe I should but there are more important things to focus on from a CSR and Sustainability perspective – and I haven’t worked with banks or other financial institutions that often.

But I do know fairness when I see it. And sometimes this fairness blows me away. This line says it all: “all of them – from the chairman … and the managing director … down to shop assistants and shelf-stackers – get the same percentage payout.” Hang on a minute. You mean they share the bonus pot equally? That’s a bit of a shocker. Must be some small little business somewhere or a bunch of trade unionist running a lunch-time cafeteria, right? No. It’s the John Lewis Partnership. For those who don’t live in the UK, they are a large company (just over $11bn in sales) that owns leading UK retail businesses – Waitrose, John Lewis and Greenbee.  And by “they” I mean all 70,000 permanent staff. That’s why they are called the John Lewis PARTNERSHIP. They all own John Lewis. Still, it’s a pretty novel idea to share bonuses equally.

Most people applauded this but some people commented in The Guardian piece that the actual amount each one got paid should have been the same. I think that is missing the point that each one gets compensated according to his or her role and responsibility and the percentage bonus payment is therefore also a reflection of this. We do, after all, still live in a world dominated by a more or less free market.

I am impressed because it shows more than just a Barney culture of caring. It reflects the view that we either fail together or we succeed together. The essence of a partnership and the essence of the John Lewis ownership structure.

I don’t think most companies can do it the John lewis way. Maybe those owned or bailed out by governments should implement such a John Lewis-styled bonus structure. But the majority of companies are not partnerships and have different masters. The John Lewis example is the extreme but more companies can learn from the basic principle and work to ensure that their bonus structure reflects the basic values – all employees work together to make a company succeed (or help get the company through a tough time) and they should therefore be treated equally. Maybe not exactly equal – my rule of performance, effort and seniority should play a differentiating role. But at the very least there should be some level transparency and equality built in to ensure all good work gets rewarded. Of course it also sends a strong message to all John Lewis workers – let’s pull together to get through the tough times as we will all benefit from an upturn. This way everyone feels ownership of their working world and believe that as long as they work hard and do their best they will be treated fairly. And the outside world will judge the company on how they treat their workers – as equals or not? If it’s greed – is it driven by a top-heavy greed or equally shared? If it is truly about equality and everyone having to do their best for the company – is it reflected in the bonus structure? I think that’s the part that many of the banks and financial institutions just don’t get.

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This happened a few years ago – not in my current company by the way. Anyway… I was sitting in the office of this very senior dude from a massive company. One of the biggest in the world. They said they needed some help on their corporate social responsibility strategy. Fine, that’s the kinda stuff I do – help companies find strategies that improves their impact on society and the environment. My approach – shared by many? Making sure it makes business sense as well. And tie it to their brand. That’s my view of sustainability – getting companies to do good by making it impossible for them to stop doing it because it’ll hurt the bottom line. Blah, blah, blah… Anyway, enough of my philosophy or job – that’s for another day. Back to the office and the dude… 

So we sat there and he was telling me how much his company cares for the world around it. You know, the usual spin of how values means everything to them, that being responsible is at the core of their business and that they have been doing the right thing way before it was so popular. I give everyone the benefit of the doubt. So I listened. And listened. And listened some more about all the wonderful things they have done. I think he must have realized I was losing some concentration after about 30 minutes or so and decided to switch tactics. He stopped and said, “But don’t believe me. Let me tell you about this guy we have in one of our California stores. They had this big fire/landslide/flooding (can’t actually remember which one) down in his area and he just jumped in and helped the local community. He organized everyone in the store to collect things and help those who needed help. Our store was the beacon of hope for the whole community. All because that one guy decided that he could make a difference because of us.” 

Now that was a great story. He should have left it at that but I he pushed on. “Wait, let me get hold of the guy for you.” And he jumped on the phone to call someone. Now the person who answered the phone had no idea I was in the office. He just heard the voice of the guy I was talking to. Let’s call him Mr F and my guy Mr B. So this was the conversation: 

Mr B: “Hey, Mr F! How are you. Listen, I need some info that I hope you can help me with.” 

Mr F: “Sure. Shoot.” 

Mr B: “Remember that guy who worked in the California store who organized everyone to help out the local community back during the fire/flood/landslide?” 

Mr F: “Yeah, I remember him.” 

Mr B: “How can I get hold of him?” 

Mr F: “Sorry B, can’t help you there. We had to fire his ass because he just wanted to help the people in his community the whole time. I mean really…” 

Mr B: “Click…” 

I won’t go into details on how he tried to worm out of that one! Let’s just say that I had a very good chuckle afterward and enjoyed watching him try to get out of that one. It didn’t work. I never did work with that company… 

You see, there are many companies out there telling us how great they are. Many of them are. And I have been lucky enough to work with most of them. First as a trade unionist with the workers at the factories, then as a campaigner at Oxfam, also as a development worker and so many other jobs I’ve had. I’ve been damn lucky to have done this across the globe – Africa (where my heart lies), Europe, China, US – still waiting for the Maldives to give me a call though. Anyway… Nowadays I’m on the sharp edge – the business side. I help companies do better by doing good. Not charity but doing business better and in a more sustainable way. Tying people, planet and profits together in harmony. (Some plucking of the harp strings to set the mood please.) 

Although I give companies the benefit of the doubt because I am interested in affecting change, I am also enough of a cynic to know that not all companies do the right thing because they believe in it. They do it for different reasons. I don’t really care what the reason or reasons might be. I want change and will take any angle that works to achieve that change. I keep my focus on the result we all want – help address poverty, improve human rights, get a handle on diseases, stop environmental degradation, start reversing or containing climate change etc. The reason why companies are willing to do better is of less interest to me; I am focused on the end goal – improving on their impact and helping them be a more efficient company in the process. Everyone has their own reason and we have to work with what we’ve got. 

I’ve also realized that very few companies actually go out to do harm. No one wakes up in the morning thinking of how they can nail the environment or the people they affect. Most of them just try to run a business and in most cases don’t realize the affect of their actions until it is too late. They are just people trying to do their job to the best of their abilities working with the limited information available to them. They need people like activist to point out their mistakes. And they need people like me and those I work with to help them correct what they do or improve on their impact. The best is of course when they call us in before the er… stuff hits the fan… 

Before I start, full disclosure. I have worked with most of the companies I am going to mention in these “The Company You Keep” posts. Sometimes as a campaigner against them and sometimes working with them to make the world a little bit better. But, like I’ve said, I’ve worked with other companies as well. No naming them. That won’t be fair. But the companies I will mention in this regular blog (The Company You Keep) stand out as my favourites. Stand out because I found something inside them that I didn’t always believe that companies can have. Values. Values that are similar to my own. Values we share. And values that most of those working for them also have. Deep rooted values. 

Oh make no mistake. None of them are perfect. They make mistakes. They continue to make mistakes. But that’s not the point. We all make mistakes. I do. No matter how much I would love to say that I am perfect and always live my values in a way that never impacts anyone negatively – I know it is not possible. Bull I say. We live and therefore we are damn well guaranteed to make mistakes. For instance, you think we can be environmentally friendly? Haha! Nice one! We are human, it is in our nature to have a negative impact on the environment. The only time we’ll have a positive environmental impact is when we push up daisies. But it’s what we do to limit our impact and what we do to try and leave the world a little bit better that matters. Every single one of us will have an impact and each one of us will make mistakes along the way. Now imagine putting thousands of people into one company and ask yourself how the hell can you in any way not have someone make mistakes – even when you try your best? It ain’t gonna happen. 

I’m more interested in intent. What’s the intent of the company? Are they purely driven by profits or do they feel neutral towards their impact (i.e. don’t really think about it) or do they believe their business can actually be a force for good on all three levels – people, planet and profits. The mistakes can be rectified when the intent is right. Let’s not get stuck on individual mistakes. Let’s correct them and move forward to better things. 

And it’s easy to shoot your mouth off from the sidelines. This is wrong and that is wrong. This company isn’t perfect and that company isn’t perfect. Point me to someone or anything that is perfect and I’ll show you a liar. More importantly, come up with some practical solution while you shoot your mouth off. Criticism is easy – solutions not so easy. 

My clients know this story as I use it often… 

Life is like my marriage. 80% of the time we agree with each other. 20% of the time I acknowledge I am wrong! But the point is that we should focus on the 80% that defines our relationship. The 80% that is good. The 80% of where we share a vision and a life. Too many times people focus on the 20% and they end up divorced. That’s the same with companies. I focus on the 80% and we work together on the 20% to make the 80% even stronger and better. Anyway, that’s a blog for another day – my 80-20 rule on life. 

I believe in these companies because we share values. Because we share a common vision of a better future. They’ll make mistakes but they’ll damn sure give it a good shot before they give up. Actually, I hope they will never give up. Because we all lose if they do. These companies are companies who do the right thing because they truly and deeply believe that values is a central part of who they are from every angle – people, planet and profits. It’s not one or the other. They believe in this triple bottom line. You get the picture. They do the right thing because that is who they are and because it is the right thing to do. The world would be a much better place if more companies were like them – both in values, value and the way they operate. 

Ask yourself a simple question. Would the world be a better place if all companies acted like them? 

Don’t think I am some sucker who just fell for their little love story. Remember, I campaigned against some of these companies. I’ve been a trade unionist and an activist. I have a high sense of smelling er… something wrong from a mile away. And I’ve worked too closely for too long with most of them to not know who they really are. 

There is a snag here as well. I can’t tell you everything I know about them. I can’t tell you all the good reasons I like these companies because I work or have worked with them. I can’t tell you about the difficult business decisions some of them have taken in the name of “doing the right thing”. I can’t tell you any of that because I work with them. But everything I do mention can easily be found on the web with a little bit of research – you go fill in the gaps. Talk to other people. Open your eyes a little and look as deep as you can. Search for some soul. Not perfection – just values and soul. Sorry I can’t tell you everything. I guess you have to do the one thing I never do – trust me on this one! 

So here we go. The first of my favorite companies in the world. In no particular order. Let’s just start… 

Timberland 

One of the coolest CEO’s I have ever met – Jeff Swartz. I follow him on Twitter and I’ve had the pleasure and honor to meet him and work with him. Really inspiring guy. And a real no nonsense kind of guy. And he is always willing to speak his mind. He actually called out a anti-climate change “activist” in a blog post a few weeks ago. A real inspiration for his whole company. But let me tell you the first time I heard this guy speak a few years ago. 

I was attending a Social Accountability International (SAI) conference. They focus on ensuring strong independent verification of working conditions in factories all across the world. Yes, they are activists and a highly respected group. You know this is true when not everyone likes what they do. Anyway, they asked Jeff to be the key-note speaker. 

In he came. A lot younger than what I expected. And, as luck would have it, damn handsome as well. (How come some people really have it all! Cool company and good looks AND such strong values!) Anyway, so Jeff stood on stage and started talking. The first thing that hit me was how this guy didn’t sound media trained. No notes to speak from or slick delivery lines. It actually looked like this guy believed what he was saying. Now I didn’t know much about Timberland up to then. I liked the brand and their boots and knew they weren’t a crap company. I knew my fellow activists liked them but I never asked why. I didn’t particularly care because I wasn’t that involved in their industry much in those days. 

And Jeff told us about how he approaches worker conditions in the factories. You see, he has kids. They help him stay grounded and remind him that those working in those factories most likely also have kids. And he asked himself, “If my kids were the kids of one of those factory workers, how would I want them to grow up and their parents to be treated.” Because, you see, it all trickles down to the kids in the end doesn’t it? That was insightful. He didn’t see the workers as parents only but he made it personal by putting the face of his kids there. You know why this was so impactful on me? Because that is what I do. I see those kids in Africa and everywhere else and I ask myself – what if that was one of my daughters. What would I expect from someone like me? It drives me. And it sustains me. 

Many years later I had the opportunity to work with Jeff and Timberland. I remember the first meeting. I can’t repeat everything that he said but I can repeat what is public knowledge. I asked him why his company does all this CSR and sustainability work and why it matters that his company always do the right thing. It’s my standard values test and sets up my bullshit meter. 

He looked at me for a while and then just said a very simple line. “Justice through commerce.” He truly believes that we can make this world a better place if we have companies that see their responsibility to the shareholders as intertwined with the responsibility to society and the environment. A company can bring positive change through the way it acts. Companies can actually create the environment where human rights are respected if they accept that responsibility and use their influence and power in a positive way. 

And he also told me that he is just a simple bootmaker. His grandfather started the company. Making boots. And his grandfather taught him how to make boots. And he wants to know that every hand that touches that pair of boots had as good an experience making these boots as those who will eventually wear them. And that the environmental impact in making those boots are as soft as when we wear them hiking in the mountains. So simple yet so powerful. “Justice through commerce.” 

Jeff, love you dude. Glad we have CEO’s like you willing to speak out and be loud. And I don’t care what you say – or what your kids might think… You are cool and have the privilege of wearing those awesome boots day in and day out. We could do with more people like you. You inspire us to be better than who we are. Just a bootmaker? Yeah right. And I am just an African… Ubuntu to you! 

But it goes beyond Jeff. Yes, he drives it forward and sets the vision. But the company is full of people driven to do the right thing. You should see them pushing and driving a new agenda each day. Crazy as hell but everyone going forward. Always wanting to take up a new challenge and set new standards. And the sad thing? You have not heard much about what they have done. Wish you could. You will be blown away by some of the things Jeff and team is doing and have been doing. From creating an industry leading eco-label that tells you about the environmental and social footprint of the pair of boots you are wearing, to the cool community projects they have in cities across the world, to engaging with their stakeholders (activists included) four times a year around quarterly reporting, to really get to the heart of challenging issues, to speaking out against inaction in dealing with climate change to… you name it and they do it. Too much to mention and Jeff and his gang will remind me of all the things I’ve missed – the good and the bad. 

The best part? They make one damn fine pair of boots. Good to look at and even more comfortable to wear. And one that can take the knocks and be even more comfortable to wear the next day. A bit like the company itself. 

So as I sit here looking at my old worn Timberland boots (yes I have them on right now) and know I will wear them again tomorrow with my new Timberland gloves the wife bought me, I know one thing about Timberland. Proud. Damn proud of them. And they are as tough as hell and as comfortable as soft leather should be. Just perfect to kick some butt on the way to greater “justice through commerce”. 

I know they are worth a shot. I know they are worth rooting for. I know that the world will be a better place if other companies share their values. And I know the world will be a better place if more companies challenged themselves as much as they challenge themselves. 

So tell me. Are you proud of the company you keep? 

Made to kick ass...

 

_________________________ 

Note: Just in case anyone thought otherwise. No company approached me or paid me or asked me or engaged me in any way to write about them. I am just one damn lucky guy to have had the pleasure to work with these companies in one way or another. And I’ve watched them closely and liked and loved what I saw. So I decided to write about them. Here is the other thing. I work for a company that I admire as much as these companies. But it would be unfair to write about them. That would be sucking up to the boss. Yes, we are large. But we are privately owned. And the owner? One hell of a guy. One heck of a family. You wouldn’t know he was the boss if he walked in. But you will when you see how we react. Why? Because we admire him. Admire him for doing the right thing. Always. I work for one hell of a company. They look after us and empower us. And they give me the opportunity to be who I am AND work with some of the most awesome companies in the world. Hell, they know about me as a blogger and speaking my mind no matter where I am. And they encourage it and support it. Now that is empowerment. Tell me. Can you say what you want and be who you are where you are working today? I can.

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