by Gael O’Brien
The shadow of economist Milton Friedman loomed large in a recent ethics course where business students embraced, what is so often evident in many companies, that the purpose of business is to maximize profits for shareholders.
There are varying degrees of outliers to Friedman’s philosophy. Starbucks’ Chairman and CEO Howard Shultz and his “Race Together” initiative, or Zappos’ CEO Tony Hsieh and his self-management organizational approach called Holacracy, offer approaches to social responsibility vastly different from Friedman’s.
While both company leaders focus on building brand, Starbucks’ mission and Zappos’ core values and approach to delivering happiness go beyond products to a sense of purpose that fuel a desire to transform society and make a difference by how their organizations operate. By tackling two hugely complex issues – race relations in America on one hand and command and control hierarchical organizational structure on the other – their handling of mistakes, lessons learned, regrouping and execution can offer insights into the potential and scope of social responsibility. While both companies are still in the early phases of their respective efforts, the question is when they are done, will their results fuel critics warning about taking on too much, or provide a bridge to get from conventional thinking about the role of business to what can evolve as a new norm?
A number of issues make conventional thinking very inadequate: the 2008 global economic crisis and vulnerabilities emanating from that; the scope of unknowns created by ever-evolving technology (did a robot write the finance story you read this morning?); global volatility; and the increasing vulnerability of business to fallout from societal and environmental problems. With all of this, it is time we acknowledge we don’t know as much as we think we do about what business paradigms might most sustainably address the realities and problems presented by the 21st century.
That admission enables us to replace hubris with what the poet (and insurance executive) Wallace Stevens called becoming “an ignorant man again” inviting us to strip things away to see where we are with fresh eyes and ask different questions.
Creativity, entrepreneurial thought and innovation are at the heart of this process. We need more leaders to have big, out-of-the box ideas that have the potential to transform business and society. Leaders will need to create that space for themselves and pull in appropriate internal and external thought partners, deliberately seeking out devil’s advocates to help move beyond blind spots, connect dots and test ideas to see and address obstacles. It goes without saying that ideas need to build off leader and company strengths and what they are most suited to contribute, as well as fall within a company’s tolerance for risk. By the same token, outsiders who cover and monitor companies shouldn’t give praise before it is earned when results are in or smother innovation by judging too quickly its success or failure in its messy and evolving process.
Both Shultz and Hsieh seem to be at that messy place in an idea’s development where the “ignorant man” approach can again help relook at the change process from the inside out….what different questions might be asked of employees to learn more about how they are feeling about where the bar is set for them (and the company) and what they need more of or less of, what isn’t working in the bigger picture and why they think that is and what they see from their vantage point that could help move things along. If leaders can’t decode employee concern, discomfort or resistance, learn from it and adapt their communication and approach to respond to it, they leave too many people behind; their big idea then loses a vital source of energy and spirit to succeed.
Disruption and innovation are uncomfortable for those in the midst of it and stress the sense of connection that are hallmarks of a culture. At Zappos, for example, culture has been a unifying strength continually reinforced, as their annual employee-created culture book attests. However, by changing the organizational structure in which the culture was experienced, the context is changed and can lose its hold until a new sense of belonging coalesces. A key question for Zappos to address is where does delivering happiness show up internally in the chaos of attempting organizational transformation?
Hsieh and Shultz, and any leader with big ideas that cause employees and stakeholders to move into unknown territory, need to make sure the distance to be crossed is navigable. At Starbucks, for example, taking responsibility to nurture a national conversation on race easily overwhelms unless they find ways to individualize how their roots in each neighborhood and the expertise of particular community leaders in each setting can convene around local concerns so the aggregate of all these local conversations and actions add up. Change, even for the noblest purposes, needs to take hold internally and locally and build slowly owned by many.
The need for new paradigms for business and social responsibility is very high given the challenges so far in the 21st century. And in delivering results, we’d do well to remember:
“If you have built castles in the air, your work need not be lost; that is where they should be.
Now put the foundations under them.” — Henry David Thoreau, Walden.
Gael O’Brien, a Business Ethics Magazine columnist, is a consultant, executive coach, and presenter focused on building leadership, trust, and reputation. She publishes the The Week in Ethics and is The Ethics Coach columnist for Entrepreneur Magazine.