A new trend is hitting business schools hard: the ideas of Corporate Social Responsibility are being revised and applied to real business.
Due to the financial crisis, lack of trust in business and finance, globalisation and the environmental consciousness, we see a growing shift in the business mentality— that the business is only and exclusively about making money and the only thing that matters are shareholders, is slowly changing to the idea of a socially responsible business.A good purpose is inspiring, sets you apart, makes you distinct, sets the stage for value creation around you and makes you realise that your business matters
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How is New Business different?
- Purpose oriented: New Business understands their purpose and puts it first. A good purpose is inspiring, sets you apart, makes you distinct, sets the stage for value creation around you and makes you realise that your business matters.
- Ask yourself: What is my company’s purpose? You will probably see that your sentence starts with “The purpose of my company is to help/ to provide/ to supply… customers with …”. Money and profits will follow but purpose is the main focus of New Business. Many New Businesses also see job growth and employee satisfaction as an integral part of their purpose.
- Socially responsible: Any business creates (or destroys) value for the shareholders. New Business also focuses on stakeholders, meaning all the groups or individuals affected by the achievement of your business purpose, from governments, media, to customers, suppliers, employees, financers, and local or even global communities.
- Creating a business involves getting these groups of interest going in the same direction and in harmony.
- Value focused: Incentives are important but so are values. You want to create wealth, but you want to do it the right way, not the wrong way. Every business will sooner or later confront the wrong way, and businesses who take social responsibility as part of their purpose from the very beginning are more likely to find creative, responsible solutions to their needs.
What is a successful business according to this new trend?
The old win-win raised to the 100 power:
- It is a business that creates value for ALL the Stakeholders, without tradeoffs
- Whose customers lives are better because of your products and services
- Whose employees are engaged
- Whose suppliers make you better
- With supportive communities
- That uses friction of conflicting interests and critics to produce innovation
- That sees business and ethics as necessarily connected
- Is driven by conscious leadership
- Has conscious and supportive culture
Even though it is lately arriving to business schools, many companies around us are already very responsible in different ways, some just with the environment, some with their communities, some with their employees. Here are a few examples:
- Seven Generation Diapers from Canada: Gives a package of diapers to a women’s shelter for every package sold. This month, 240,000 packages will be donated. It is a “green” company that makes the diapers with no fragrances, latex, petroleum-based lotions or chlorine processing.
- Whole Foods Market: A grocery store based in the US that cares about seafood sustainability, animal welfare standards, organic farmers, and cares for their communities and local farmers. Social responsibility is central to their business model.
- BetterWorldBooks: Every time a person purchases a book from them, they donate a book to someone in need. More than 10 million books have been donated.
- Medtronic is an Irish company that makes medical devices to further enhance the lives of people suffering from debilitating diseases. They have accomplished much in the way of recycling their metals from devices, decreasing their carbon emissions, and other waste products. They are using their own recycled products and reusing them in their new products.
- NIKA WATER COMPANY (USA) uses all of their profits to deliver clean drinking water to people in developing countries.
- Rekindle from New Zealand is a social enterprise that makes furniture, sculpture, interiors and jewellery from waste wood – wood from demolished houses before it is sent to the tip. Rekindle is, therefore, helping the community to fully utilise wood (a scarce resource) and provides employment and learning opportunities.
Can you think of any others to add to the list?
Anna worked in the web sector before founding Ricaris have a nice day (www.ricaris.com) in 2009, a successful services company providing distributed solutions for companies in the web sector. Managing Virtual Teams (www.managing-virtual-teams.com) is a new consulting product bringing together all of the experience across the distributed teams of Ricaris, and putting it into bite-sized courses, virtual team activities, and consulting packages. Follow Anna @virtualteams.