What is the business of business?

By Ian Davis, from The McKinsey Quarterly, 2005 Number 3

"By building social issues into strategy, big companies can recast the debate about their role in society.

The great, long-running debate about business's role in society is currently caught between two contrasting, and tired, ideological positions.On one side of the current debate are those who argue that, to borrow Milton Friedman's phrase, "the business of business is business." This belief, most established in Anglo-Saxon economies, implies that social issues are peripheral to the challenges of corporate management. The sole legitimate purpose of business is to create shareholder value. On the other side are the proponents of corporate social responsibility, a rapidly growing, rather fuzzy movement encompassing companies that claim that they already practice the principles of CSR and skeptical advocacy groups arguing that they must go further in mitigating their social impact. As other regions of the world—parts of continental Europe, for example—move toward the Anglo-Saxon shareholder value model, the debate between these points of view has increasingly taken on global significance.

Both perspectives obscure, in different ways, the significance of social issues to business success. They also unhelpfully caricature the contribution of business to social welfare. It is time for CEOs of big companies to recast this debate and recapture the intellectual and moral high ground from their critics.

Large companies must build social issues into strategy in a way that reflects their actual business importance. Such companies need to articulate their social contribution and to define their ultimate purpose in a way that is more subtle than "the business of business is business" and less defensive than most current CSR approaches. It can help to view the relationship between big business and society as an implicit social contract—Rousseau adapted to the corporate world, you might say. This contract has obligations, opportunities, and advantages for both sides."

Read the rest of the article ....

Drivers of organizational learning

Another of my posts from the online debate we are having about organizational learning in the 21st century. The "swarm" conversation is facilitated by Viv Read from Australia, who now is involved with the The Cynefin Centre.

"I think it is impossible to look at these drivers without considering what is going on in the world at large.

So, if I offer three "tenets" for the 21st century, they would be:

1. The science is Biology, and the organizational metaphors will thus all be about biology, adaptation and networks of activity. The 19th Century was all about mechanics, and the 20th was all about physics - and these got reflected in our organizational metaphors and design (with apologies to Gareth Morgan). Now we move on.

2. The focus will be on customer and employee engagement, forging "hearts and minds" connections which cut through the traditional structures and ways of working. This is not the same as relationship management - it is deeper and more meanigful to both sides of the transaction.

3. The geography will be China.

And if I am allowed to offer a fourth, it would be:

4. Idea Stars. We invented movie stars, then sports stars, now business (consultant?) stars. Idea stars are next. In fact, they are already here ...."

What do pop stars know about the world?

From the BBC Website

By Brendan O'Neill
Deputy Editor of Spiked Online - June 30 2005

"Pop and rock stars are nowadays as influential in government circles as they are among their teenage fans. Is this necessarily a good thing?

There has always been a little bit of politics - as Ben Elton might say - in pop and rock music.

Ever since a wild-haired Bob Dylan sang The Times They Are A-Changin' in 1963 - in which he warned senators and congressmen that 'There's a battle outside and it's raging' - popular singers have ventured, with varying degrees of success, into the world of political protest and dissent.

Some 40 years later, the times really have a-changed. Politically inclined pop stars no longer strum their frustrations in catchy three-minute tunes; they have become global statesmen instead. They no longer only play political songs but have become real political players.

Take Live 8, the global gig being organised by former Boomtown Rat Bob Geldof and one-time Ultravox frontman Midge Ure, due to take place in London, Berlin, Johannesburg, Tokyo, Paris, Philadelphia and Rome on 2 July.

In the run-up to the concert pop stars have been everywhere, proffering their views on what the powerful G8 nations should do to tackle poverty and pestilence in Africa.

But what do pop stars really know about the world? And why should the views of these well-heeled singers of throwaway songs be taken more seriously than anybody else's - which they are, everywhere from Whitehall to the White House? ....."

Read the rest of the article ....

Asian and American Leadership Styles: How Are They Unique?

From HBS Working Knowledge - by Professor D. Quinn Mills

"The rapid economic development of Asia in recent decades is one of the most important events in history. This development continues today and there is every reason to anticipate that it will continue indefinitely unless derailed by possible but unlikely international conflicts. At the core of Asian economic development is its business leadership - managers and entrepreneurs who sustain and create Asian companies. Do they exhibit the same leadership styles as top executives in the West?

There are important differences. Are differences attributable to different cultures or to different stages of corporate development?

..........................

Family and political connections

Cultural differences are important, but primarily as a matter of emphasis. For example, family leadership of business enterprises, including large companies, occurs in very similar ways in both [regions], but is more common in Asia.

Li Ka-shing [of the Hong Kong-based Hutchison Whampoa and Cheung Kong holding group], for example, runs his companies closely and is planning to pass the leadership of his firms to his two sons. Similarly, the heads of some of America's largest firms, both publicly held and private, are the scions of the families that founded the firms.

There is less freedom of action for executives and boards in America than in Asia. But more common in America are firms that are run by professional managers who are replaced by other professional managers, either as a consequence of retirement or of replacement by the board of directors of the firm. The better companies have sophisticated programs for developing executives within the firm, and ordinarily choose a next chief executive officer from among them. American CEOs average about thirty years with their firms and own less than 4 percent of its shares."

Read the rest of the article ...

Generational paranoia

I am involved in an on-line discussion about how and why choices for development investment opportunities for individuals, the organisation etc. are made.

I just posted this:

"I'd like to take a completely different tack to address the generational issues. Recall when we were all getting educated, either in the classroom, on the barricades (in the 60's in Europe e.g.) or in the rock concert / hippie 'paradise'. I can't recall many people being too worried about the job and the mortgage - we had more important things to think about! And companies, ironically, seemed to respect that by hiring all these 'social movers and shakers'. Not sure Government did, though - still wanted the old approaches?

Now, my wife and I have a bunch of (well educated) kids, and I spend a lot of time with young managers in various situations. Everyone seems paranoid about the economic future - cost of houses, direction of politics, mortgages, job security, the value of their CV etc etc. Of course they do still take social causes seriuosly - Tsunami, Live 8 etc etc.

But the ironic thing is that the 'old guys' have all the money, all the resources.

What are we collectively doing to this so-called digital generation to build their paranoia?

How can we help instead?"

It's the Sound Bite, Stupid

From Inc. Magazine, June 2005 - By Adam Hanft

When entrepreneurs think about how to expand their companies and compete with gusto, they tend to focus on the obvious: sales, R&D, distribution, pricing. It usually stems from their backgrounds. Those who excel at sales believe that all problems require a sales solution. I once had a client who was an engineer who suffered from the bells-and-whistles syndrome -- he never saw a problem that couldn't be solved by adding another feature.

Maybe they're right. On the other hand, that new sales strategy or technical improvement isn't going to be of much use if you can't explain it properly -- to employees, clients, and the world at large. And when it comes to using language effectively, most business leaders fall woefully short. They certainly lag their peers in the political sphere, where well-crafted terms such as "culture of life" and "death tax" have shifted public opinion and even legislation.

In his recent book, "Don't Think of an Elephant: Know Your Values and Frame the Debate", linguist George Lakoff argues that the way a position is articulated, or framed, is a key driver of how it will be received. Not surprisingly, the book has become a bestseller in Washington, D.C.

Read the rest of the article here.....

The Interview With God

My friend and ex-colleague at Procter & Gamble Mohan Mohan pointed this out to me .....

I dreamed I had an interview with God.

"So you would like to interview me"? God asked. If you have the time I said.

God smiled. "My time is eternity."

"What questions do you have in mind for me?"

"What surprises you most about humankind?"

God answered... "That they get bored with childhood, they rush to grow up, and then long to be children again."

"That they lose their health to make money... and then lose their money to restore their health."

"That by thinking anxiously about the future, they forget the present, such that they live in neither the present nor the future."

'That they live as if they will never die, and die as though they had never lived."

God"s hand took mine and we were silent for a while.

And then I asked... "As a parent, what are some of life"s lessons you want your children to learn?"

"To learn they cannot make anyone love them. All they can do is let themselves be loved."

.......

Read the rest of the poem on the The Interview With God website....

Leading Execution

From IndustryWeek - by John S. McClenahen

Once companies define corporate social responsibility and devise strategies, CEOs and other senior executives must creatively and effectively take the next step: lead the implementation.

Defining social responsibility and devising corporate strategies are but two steps, although vital steps, in the difficult, dynamic and continuing job of connecting manufacturing and society. However, without executive leadership, definitions, be they broad or narrow, and strategies, be they simple or complex, aren't worth the computer memory space they occupy.

'What executives in today's world have to do is . . . be ethical leaders,' insists R. Edward Freeman, a professor at the University of Virginia's Darden School in Charlottesville and academic director of the recently created Business Roundtable Institute for Corporate Ethics. 'Ethics can't be what I like to call laminated ethics -- laminated on a card or plaque.'"

Read more ...

Stacey & Certainty

I was with a client in Finland this week, again, and we were dealing with how best to work in a "high techonology" matrix organization

One suggestion I offered was to consider Ralph Stacey's "Certainty Matrix". This is a way of taking action based on the degree of certainty and level of agreement on the issue in question.

I like this model as it provides a framework to allow a group to choose between approaches for a specific issue or decision, and then be able to communicate with others about their conversation, process and outcome. Some things are just too hard - others too easy. The rest?

Well, you try to "eat the elephant" a piece at a time ....!

A good primer on the subject is at the Plexus Institute Archive.

Paris

Just got back from HEC in Paris - proud to be an "alumnus" now!

Anyway, also wanted to say how great it was to see all the "Consulting and Coaching for Change" folks. We learnt a lot in our program, both from the faculty and from each other - and we continue to learn and do business together. What more can you ask for!

Sitting in a restaurant

So I am in Salford, Northern England - home of Lowry and close to Old Trafford (Manchester United ...).

I am using wireless broadband, having just finished reading an article about Chinese "guanxi" in a scholarly journal, whilst drinking a quite fruity Woodbridge Chardonnay.

We really do live in a very privileged bubble of knowledge, communications and (available) time. And it is largely driven by our ability to read and share ideas.

Funny how you need to be in a restaurant to realise this.

Bono urges EU to open wallets for Africa

From Yahoo! News

Irish rock star Bono challenged EU leaders on Thursday to forget national politics and open their wallets to boost development aid for Africa and stop thousands dying every day in "stupid poverty."

"The message to EU leaders is: don't blow it. This kind of momentum doesn't come every year," the U2 frontman, a leading campaigner for debt relief, told a news conference at European Union's headquarters in Brussels.

"Put down your national flags, look up from the numbers and look to the future," he said, standing shoulder-to-shoulder with European Commission President Jose Manuel Barroso.

He drew a rare round of applause from a packed press room, which Barroso and his commissioners often struggle to fill.

Read more here ....

Jefferson Airplane

Hardly a major post - but a personal one. Listening to the band as I was working today makes me wonder where the last 30 odd years went!! Still great music today, I think.

More seriously, I so much like their music that I do get a bit "agitated" with the commercialization that seems to overtake everything ... just see their official website to understand what I mean. Now I love the fact that you can listen to many of their tracks for free. But, T- shirt, anyone ...

See www.jeffersonairplane.com

Nurturing Leaders

Manufacturers lead in developing future top executives

From Industry Week - by Jill Jusko June 1, 2005

While General Electric Co. is widely known as a company that focuses on developing its next generation of leaders, new research shows that manufacturers as a group lead the pack in developing head honchos.

Fourteen of the firms recently selected as the Top 20 U.S. Companies for Leaders, and eight of the top 10, are manufacturing companies. General Electric is No. 2. The Top Companies research, sponsored by consulting firm Hewitt Associates and The Human Resource Planning Society, showed that these 20 companies showed more rigor in developing leaders than the other 353 firms examined.

For example, all of the Top 20 companies focus on developing leaders and have CEOs who are actively involved in the process. Less than 60% of the other companies focus on leadership development and 65% of their CEOs participate in the process.

Read the rest of the article ....

When pop stars get political

From the BBC website

"Bob Geldof wants to turn up the heat on the G8 leaders. "

"No matter what happens in the future, rock and roll will save the world," said The Who guitarist Pete Townshend.

The Live 8 concert may not quite put his forecast to the test, but it once again raises the question of whether microphone diplomacy and a pair of wraparound sunglasses cuts any ice with world leaders." Read more here .....

There now seems to be a debate raging in the UK about whether Bob's call for a mass protest in Edinburgh ("one million people should come on the same day ...") at the time of the G8 summit in July is a good idea or not.

Some local people fear violence, but probably more are concerned whether a city of 300,000 can really cope with trebling in size over night. On the other hand, lots of people agree with the need to do something, and think this might be worth a try. And I heard it argued on the radio that Rome coped with mass crowds at the Pope's death overnight, and Liverpool coped with rapidly forming crowds celebrating their winning of the European Football Championship - isn't that what big cities are supposed to be able to do, went the argument?

So, what's my view? Go for it. In fact some of our kids and I have just booked to go to Edinburgh ...

Leaders all take chances, and Leaders all have a strongly held point of view on what needs doing. And Leaders all make changes - Leadership and status quo are not compatible concepts.

My only advice to Bob? Just make sure you also step up to the enormous responsibility here - yes, let's fix poverty if we can - the poor people of the world are surely worth the effort. And also make sure you are really listening to the views, needs and fears of those people that will support you and the cause.

Leaders know how to talk to the people around them in ways that make sense - in other words, in ways that followers want to be talked to. Make sure the event is a succesful yet safe one for all stakeholders, by getting support from all quarters, including the political establishment and the inhabitants of Edinburgh .....

To find out more about the arguments and plans to eliminate poverty, and see what Geldof and his co-organisers are up to, see the Making Poverty History website.

And, if you have time, read Jeffrey Sachs excellent book "The End of Poverty: How We Can Make It Happen in Our Lifetime".

Sachs' concept of in-depth, multi-disciplinary "Clinical Economics" (as opposed to that of "4 bullet point development economics" - my expression) is nothing short of brilliant. And he provides an executable if challenging roadmap to actually make a difference.

The problem, of course, is that it is hard to be as "clinically" rigorous as Sachs and as passionate and commited as Geldof and Bono are.

That's Leadership.