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Enlightened Capitalism: Building a New Corporate Consciousness
Photo credit: flickr/Daleberts, Creative Commons license.
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By Rachel Botsman

Besides changing our perceptions of the world and how we operate within it, the buckling of the “old system” of business is rapidly restructuring the relationships between employees, companies and society. The current convergence of global market failures and changing societal expectations of corporations is creating a widespread realization that we can’t continue with “business as usual.”

By shifting their current perceptions of sustainability, companies can re-inspire employees (who are hungry for change) to play their part in bridging the gap between business value and societal needs. If they succeed, they could emerge from this crisis as trusted and sustainable 21st century brands.

In order to capture this opportunity, companies need to build a business culture that truly embraces sustainability and innovation. This is not about “greening” an employee base or organizing one-off community days. Nor is it about setting a target to reduce a carbon footprint or viewing sustainability in the narrow environmental sense. It is about building a cultural ethos that understands and embraces all the dimensions of sustainability -- planet, community, people, business and brands –- and the interactions between them.

A survey of companies with reputations for nurturing best-in-class cultures of sustainability such as Timberland, Seventh Generation, Eileen Fisher, Patagonia and Stonyfield Farm, as well as less niche (and nimble) multinationals like Nike, Wal-Mart and the leading British retailer Marks & Spencer’s which are staying relevant by transforming their old business mindset, reveals some common principles that permeate entire companies in ways that permits employees to experience and view sustainability as an integral part of everything they do and how they do it. So, what are these sustainable companies doing right? Put another way, what are they doing differently?

Abolishing the term or notion of “Corporate Social Responsibility”
Even if the CSR nomenclature still lingers in specific shareholder reports, these sustainable companies do not view sustainability as a responsibility, as “risk and reputation management” or as a reporting requirement. Rather, they embrace it as a (if not the) source of innovation for a better and more profitable company. Eileen Fisher actually uses the term “Corporate Consciousness,” and Unilever istransitioning to “Corporate Social Vitality.” Both terms signal that sustainability should be the source of energy, experimentation and inspiration that fuels a company’s growth and culture.

Sustainable companies are also generally opposed to having a separate CSR department –- a move that can signal to employees that responsibility for sustainability is limited to the job of the designated and knowledgeable few.

Shifting from linear to systems-based thinking
Sustainable companies are committed to enabling their employees to change the way they think about things towards a new culture of systems thinking where everything is connected. This perspective allows employees to see not just their organization as a larger whole (instead of compartmentalized departments) but it also empowers them to develop an innate understanding of how their company is interconnected with the world around them.

For example, Wal-Mart recognized that about 90 percent of its environmental impacts occur deep within their supply chain. To address the inefficiencies at the root, Wal-Mart formed networks across formerly disparate business units from buildings to fleet, to waste to packaging, to food and agriculture. This example helps train employees to address systemic barriers to sustainability that are interconnected.

Teaching employees new types of collaboration
Sustainable businesses require a whole new level and type of engagement with local communities and governments, non-profits and even (at times) competitors. To support this collaborative “open source” way of working, employees should be given new channels of knowledge-interchange and encouraged to open up best-practices and learning to the rest of the industry.

This often requires repeated reassurance that competitors will eventually share back and that it is in the company’s longer term interests to get the whole industry designing better products and services as a whole. For example, M&S has started the “M&S Supplier Exchange,” which is used to share best practices, stimulate innovation and even to help suppliers secure the funds needed to develop more sustainable production methods.

Showing respect for employees
As Jeffrey Hollender, CEO of Seventh Generation recently noted, “It starts with how you answer the phone, how you treat the people who clean the office…these are the easy things we can do.” A culture of respect helps imbue employees with a holistic approach to business, environment and society.

For example, Wal-Mart introduced its “Personal Sustainability Project” (PSP) in 2007 to help its Associates integrate sustainability into their lives by making changes to their everyday habits. Progress toward PSP goals is measured by counting daily activities like healthier eating and lifestyle habits, replacing old appliances with energy-efficient ones, using environmentally-friendly and non-toxic home cleaning products, and getting involved in projects in one's community. PSPs reflect the “shift in Wal-Mart's perspective towards understanding how physical health, psychological wellbeing, social connections and lifelong learning about one's environment feeds the health of a business.”

Empowering employees by helping them to make a difference
From the very first interview until the exit interview, sustainable companies continuously reinforce the need for all employees to be responsible and accountable for sustainability, and to view their efforts in a larger company context. For example, Timberland's “Path of Service” program allows employees 40 hours of annual paid time off to work on service projects in communities.

Setting goals that challenge the imagination
Though practical goals are important, it is also important to set goals that raise the bar for sustainability in business. For example, Nike has set its ‘North Star’ as “becoming a totally ‘closed loop’ company where materials from a Nike shoe, for example, will end up becoming the materials for a Nike shirt.” Imagining this as the end result shows employees that their steps along the way are positive progress on an ultimate journey toward ideal sustainability, and encourages constant innovation rather than resting on the laurels of previous accomplishments.

Using transparency to solve problems
Sustainable companies make transparency work for them by involving their employees, shareholders and customers in the process of exposing and solving problems. This wider community helps by asking questions, challenging assumptions and devising solutions.

For example, the opening page of Seventh Generation’s 2007 Corporate Consciousness Report leads with a frank admission of the company's failure to reveal to consumers and key stakeholders the problems with purging dioxane from Seventh Generation products. As Hollender states, “by exposing problems, transparency begins to solve them.”


In summary, we are in an acute time of change where the wider business community is just beginning to realize the extent to which the health of a company’s core values, beliefs and traditions (i.e. its culture) affects the health of their long-term ability to sustain a healthy business on all fronts. The change represents an opportunity to embrace “enlightened capitalism” and revitalize companies with a new type of connected corporate consciousness: a consciousness that helps businesses to consistently create value by consistently competing on the values of sustainability and innovation.

Rachel Botsman specializes in the intersection between brand, innovation and sustainability. She is Director of Strategy for OZOlab, a leading sustainable and innovation think tank and business incubator. She can be reached at Rachel@ozolab.com.

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Comments

I set up a by crowd of soups that valid extraordinary, and can be made in big batches and frozen.
Is there any interest?


Posted by: KarrieTamsin on 27 Nov 08

thanks for the article- sending out to my company


Posted by: ryan gordon on 27 Nov 08

Rachel,

Great article. We are advocating very much the same thing in our work as well. Our thinking is that Enlightened Capitalism requires significant and sustained Capacity Evolution. We use a couple of simple models to illustrate what you point out with our clients.

The first is BE/DO/GET. Basically, to GET sustainable realities (products, processes, supply chains) we have to work with people and organizations in helping them change the way they DO. New skills, competencies, technologies can help but, without a greater capacity to see and think sustainably (BE), they will tend to use the same mindsets to manipulate new and sexy tools. End result? Same unsustainable mindsets with more powerful tools. Baaad idea.

So, we look at facilitating change through focusing on three dynamics: helping create the DESIRE to BE more sustainable (building awareness of systemic interconnectedness, for example). This helps ensure people are not doing the same thing differently. Next is ensuring there is ample peer and organizational SUPPORT for the changes that emerge. A key element of this is new & challenging ROLES & LIFE CONDITIONS. When done well the above three dynamics serve to fuel a positive feedback loop that generates increasing SUPPORT, nourishes and drives DESIRE to BE more, enabling the people and their organizations to DO more and GET more sustainable performance.

What we are finding is that the DESIRE is already there. What's consistently lacking is the SUPPORT and attention to the BE part of the equation. Most of the people we work with want to live more sustainable lives, want more accountable and transparent workplaces and are ready to take on the challenge. What they need is to develop frameworks and ways of seeing that allow them to fully leverage that DESIRE. This means organizational SUPPORT for their growth and development as well as for initiatives and projects that emerge from greater engagement and empowerment.

I agree that it takes a lot more than CSR thinking and targeted or one off giving. It takes deep, ongoing learning, development and change at the individual, cultural, behavioral and systems levels.

There's a lot of work to be done. Let's get busy!



Posted by: Zach Smith on 30 Nov 08

When we get on our knees and pray to the green god which direction do we face?


Posted by: curious on 4 Nov 09

An evolving consciousness is seeding within the modern mind that understands, after these last challenging years, that greed does indeed know no bounds. And the primitive belief in self-interest at any cost that dovetails with it, even to the destruction of the very society that supports it, also finds itself a wounded relic of an ancient past.offshore company


Posted by: Frankie on 26 Jun 10

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