“It’s on all of us.” Three things responsible firms do

By Guy Corbet, Fourteen Forty

Worlds away, back in March, “it’s on all of us” is how the then-rookie chancellor, Rishi Sunak, set out the challenges ahead.  “We want to look back on this time and remember how, in the face of a generation-defining moment, we undertook a collective national effort – and we stood together. It’s on all of us”.

And it has been on us.  We’ve learned a lot from how differently people, politicians, institutions and businesses have behaved and performed.  Some with enormous dignity and credit, others with voracious near-naked self interest.  

Some have adapted their world view to understand and respond to events.  Others have scrambled to bend a narrative for events to fit with their view of the world.  

We have seen the best and worst that the world has to offer.

Simon English, the senior city correspondent at the Evening Standard, said in September that the normal “rules”, in which journalists hold firms to account, “were suspended during lockdown.

“We [city reporters] decided any company that was staying afloat must be doing a decent job”, he said.  But with things returning to normal, as they were, so were the press.  “Time for gloves off” and for scrutiny to resume.

In these troubled times, many businesses are considering their role in society.  Many choose to build their reputations on “doing good” through political campaigning.  Others take the view that it would not serve their business, customers or community to take campaigning positions.

It is informative to look at how firms responded to Chancellor Sunak’s assertion that “it’s on all of us”. 

Those that have behaved with quiet dignity have done so with three things in common.  

Concentrated on customers.  They have recognised that their customers may need different things from them in these days, and they have adapted to serve them as best they can.

Looked after their people.  To the best of their ability, in frightening and unsettling times, they have looked after their people.  When they have not been able to, they have been respectful.

Committed to their community.  Whether their community is best identified as a local area, a group of people or a constituency of interests, they have done what they can to support it.

These are three fitting principles to be measured by, not just during the pandemic, but after it too.

Purpose is not new.  Viktor Frankl, the eminent psychologist and holocaust survivor, argued in 1946 that meaning in life is critical to good mental health.  Knowing why we are doing something helps fulfil us all, and stay sane.

Many argue businesses should take up a higher political or campaigning purpose.  For them, creating jobs, looking after their customers and generating the wealth that funds our public services is not enough.  They argue firms should go further and dedicate themselves to, for instance, the UN’s Sustainability Goals.

There’s little doubt, as the UN says, that it will be by making commercial returns from those goals that they will be met.  The world will be a better place for that.  

Indeed, some businesses will do very well with that commercial focus.  Personal goods giant, Unilever used it to rescue its fortunes.  Clothes brand Patagoina built its global business on it.  But political campaigning is not right for every organisation.  

Peter Drucker, the management guru, argued that there is “only one valid definition of a business purpose: to create a customer” which may be another extreme.  

In between are the silent majority of firms who create jobs, look after their customers and contribute to their communities in a way that is relevant to the business they do.

They should not have to explain themselves by getting bogged down by external targets and frameworks, unless they choose to because it helps their business.  For many it will.

It’s hard to see the circumstances in which it should not be enough for a firm to explain what it does in terms of looking after its customers, its people and its community.  

If it can do that then, in Sunak’s words, we should be able “to look back and remember how we thought first of others and acted with decency.”

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