As I write this article, it’s the Christmas season, but it doesn’t feel very jolly. We live in a world filled with uncertainties, and 2013 is vague and potentially scary for many of us. Can the US stop itself falling over a fiscal cliff? Can the Middle East calm down? Can North Korea do the same? Can the ANC elect a leader who will actually lead South Africa with vision and integrity? Can Europe ensure it doesn’t spiral into economic chaos? Can China transition to a new leader without slowing its growth? Can your company adapt to a changing world? Can your family survive next year? So many unanswerable questions and uncertainties. It doesn’t feel like a very merry Christmas this year.
In an attempt to capture some Christmas spirit, I recently listened to a reading of probably the second most famous Christmas story (after the main one about a baby born in Bethlehem). I’m referring, of course, to Charles Dickens’s ‘A Christmas Carol’, where the world first met Scrooge. As his story unfolds, we witness a most amazing transformation; and there are lessons there for us. But more of that in a moment.
Dickens was writing nearly two centuries ago, but the world he was writing about is astoundingly familiar to us today. The divide between rich and poor, which so exercised Dickens’ imagination, is just as evident today as it was back then. Although technically speaking, America has become one of the most divided nations in the world, with a growing gulf between rich and poor, this visual evidence of a divide is particularly stark in Africa. That’s been proven scientifically: the measurement is called the gini-coefficient of national income distribution, and refers to the difference in wealth between the richest and poorest people in each country around the world. South Africa is one of the most unequal nations (in some calculations it tops the list!).
The result of this is growing poverty, unemployment, rising anger and crime. These symptoms are sadly well known in African society – we’re well aware of the ‘ghosts of Christmas’ in what has been called ‘the dark continent’. But this isn’t just an African – or developing nations – problem. All around the world there are symptoms that a growing divide between rich and poor is becoming increasingly unpopular and unacceptable to everyone (except, possibly, the rich). There are many symptoms indicating that this is a problem, including: the ‘occupy’ city movements started in 2011, the huge negative response to excessive executive pay and the growing demand for government regulations in many industries, especially banking.
And rightly so. In the UK, for example, the average remuneration for senior executives increased by 49% last year. Yes, the same year that saw massive lay offs, rising unemployment, cut backs, corporate losses and apologies from bosses to their staff for not raising salaries or paying bonuses. Yet, senior executives voted themselves these amazing increases. In a report published in the Sunday Times in September 2011, it was shown that South Africa’s wealthiest 100 had seen their wealth increase by 62% in the previous two year period. Some recession that is. (A similar statistic is true in the UK and the USA as well.)
In history, we know that almost without exception, when the poor become too disgruntled, they rise up against the rich. We’d be foolish to think that could not happen again.
Let’s Do Something About It
In an attempt to try and deal with the issues of the world’s poorest people, the governments of the world therefore got together in the year 2000 and formulated a plan to attempt to rescue the world’s most under developed regions by the year 2015. The plan was summarized by the United Nations as eight “Millennium Development Goals” (MDGs), which have guided the work of many governments and aid agencies ever since.
More recently, the South Africa government has done something similar by identifying the country’s problems and suggesting a plan of action for the next two decades. The introduction to The National Planning Commission’s (NPC: see http://www.npconline.co.za/) action plan says:
South Africa can eliminate poverty and reduce inequality by 2030. It will require change, hard work, leadership and unity. Our goal is to improve the life chances of all South Africans, but particularly those young people who presently live in poverty.
The plan asks for a major change in how we go about our lives. In the past, we expected government to do things for us. What South Africa needs is for all of us to be active citizens and to work together – government, business, communities – so that people have what they need to live the lives they would like.
The Plan goes on to identify nine key areas that need to be addressed in order to achieve this goal. These include creating more jobs, improving education and healthcare, investing in infrastructure and using natural resources more effectively. There are no major surprises in either the MDGs or the NPC’s action plan. We actually know what needs to be done.
Now we just have to do it.
It’s Time For a Change
And this is where you and your organisation come in. I know that many people around the world are very generous with their money and time, and willingly give to charities and good causes. I also know that most companies have a department that looks after their corporate social responsibility (CSR). But neither of these is enough. The system itself is broken.
None other than the legendary management guru, Michael Porter, put it this way in a Harvard Business Review article in January 2011:
“The capitalist system is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community… The legitimacy of business has never been lower than it is today and in order to save capitalism, capitalism needs to be reinvented.”
Creating Shared Value, by Michael E. Porter and Mark R. Kramer, Harvard Business Review, January 2011
Porter and his co-author suggest that businesses need to shift away from a focus on creating shareholder value towards Creating Shared Value (CSV) – a term they have coined. Their central premise is that the competitiveness of a company and the health of its communities (suppliers, customers and broader society) are mutually dependent.
Another HBR contributor, Rosabeth Moss Kanter, has been doing research that backs up Porter’s assertions. In an article for HBR in November 2011, “How Great Companies Think Differently”, she says:
It’s time that beliefs and theories about business catch up with the way great companies operate and how they see their role in the world today. Traditionally, economists and financiers have argued that the sole purpose of business is to make money – the more the better. That conveniently narrow image [molds] the actions of most corporations, constraining them to focus on maximizing short-term profits and delivering returns to shareholders. Their decisions are expressed in financial terms.
[But], the traditional view of business doesn’t capture the way great companies think their way to success. Those firms believe that business is an intrinsic part of society, and they acknowledge that, like family, government, and religion, it has been one of society’s pillars since the dawn of the industrial era. Great companies work to make money, of course, but in their choices of how to do so, they think about building enduring institutions. They invest in the future while being aware of the need to build people and society.
In her article she outlines the research she has been doing on the practices of many widely admired, high-performing, and enduring companies. She explains: “In those firms, society and people are not afterthoughts or inputs to be used and discarded but are core to their purpose.”
You Don’t Have to be Nice
My call to action is quite simple: take a look at the Millennium Development Goals and the NDC’s Action Plan for 2030, and ask yourself what part you can play in making some of these goals a reality. Don’t fool yourself into thinking that the best contribution you can make is to become richer yourself. Making your company and yourself more profitable will not have a magical ‘trickle down’ effect – nearly a century of that approach to economics clearly shows it doesn’t work. No. Something different is needed. You need to take a longer-term view of your organisation and it’s contribution to society, and you need to do things that benefit society and not just yourself.
I’m not suggesting you do this just to be nice. You can still be capitalistic, but with a longer-term horizon. A profitable African company might do well for the next few years, until the society crumbles around you, and your hard work and investment are lost to poverty, corruption, nationalization or decay. Or, your company could be marginally less profitable in purely financial terms (in the short term), but create a significantly enhanced shared value with society and stakeholders in your business. And, secure your future by doing so.
As I consider these things, I am drawn back to the Christmas Carol Dickens wrote in 1843. His main character, Scrooge, was transformed by the end of the story: transformed by a scary vision of what the world would be like if he focused only on making money, and ignored people, the planet and the community. Scrooge’s transformation is precisely what we need to see in our world today, because if we don’t have such transformations our future is scary too. Especially in Africa.
Dickens draws his story to a close with these words:
[Scrooge] became as good a friend, as good a master, and as good a man, as the good old city knew, or any other good old city, town, or borough, in the good old world. Some people laughed to see the alteration in him, but he let them laugh, and little heeded them; for he was wise enough to know that nothing ever happened on this globe, for good, at which some people did not have their fill of laughter in the outset… [And] it was always said of him, that he knew how to keep Christmas well, if any man alive possessed the knowledge. May that be truly said of us, and all of us! And so, as Tiny Tim observed, God bless Us, Every One!
This message is not just to your company, but also to you. What will you do, personally, to change the world we live in? What small action can you do to support the National Action Plan: What employment can you create? How can you help educate the next generation? How can you fight corruption, and build the nation? What will you do? It’s not good enough to think that ‘someone’ needs to ‘do something’.
What is your best contribution at this time of history? And if you won’t do it, then who will? And if you won’t do it now, then when will you?
It was Margaret Mead, the famous sociologist who said, “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever does.” Indeed!
Graeme Codrington is a futurist, strategy consultant and speaker, with bases in London and Johannesburg. He can be contacted at email@example.com