Business looks for collective action
May 28 2014
Under the theme of “Building Sustainable Family Business Institutions to Improve the State of the World,” we explored how creating societal value and systemic change could be advanced collectively. Rupert Howes, CEO of the Marine Stewardhip Council (MSC) and I, representing PlanetRead, were there as social entrepreneurs invited by the Schwab Foundation, a sister organisation of the World Economic Forum.
The opening session on creating societal value began with panellists describing a macro picture of the challenge: 2 billion people are reaping the benefits of the economic system, but 4 billion are barely eking out a living and a billion are living on less than $1 per day. With the explosion of TV, mobiles and the internet, this inequality is in people’s faces. Citing the examples of Gandhi, Mandela and Kennedy, one panellist elaborated on what they all had in common — the ability to inspire collective action to take on major challenges.
Another panellist drew attention to the Occupy movement. Although it may be tempting to see the movement as having failed, it actually succeeded in making people look at wealth concentration through a 1 per cent versus 99 per cent prism. That framing in the popular mindset, coupled with recent academic works such as Thomas Piketty’s bestseller Capital in the Twenty-First Century, have changed the tone of the global discourse on the concentration of wealth in the past few decades.
For example, in the US, as Piketty has pointed out, the bottom half the population owns just 2 per cent of national wealth and the top 10 per cent of the population owns 76 per cent of the national wealth. Such an extreme form of inequality leads to excessive concentration of power in a few hands, which ultimately weakens the very foundation of democratic capitalism.
Many present at the conference felt that family businesses should take on global challenges through collective action, including taking some risk. So which global challenge(s) and solution(s) could the family businesses back? Since its founding in 1998 by Klaus and Hilde Schwab, the Schwab Foundation for Social Entrepreneurship has rigorously screened and conducted due diligence on thousands of organisations. Today the Schwab Foundation’s global network comprises 300 system-changing social entrepreneurs and their scalable innovations, including nearly 30 Indian social entrepreneurs.
Social change is complex and just like any field, requires experience and expertise. In a recent Forbes article provocatively titled, “Should CEOs change the world, and do they have the skills to do so?” Andrew Cave raises another question: “Will they have the humility to listen to others who have been grappling with these problems for far longer?”
After experiencing a rare opportunity to mingle with these business leaders and seeing them take a considered look at the work of MSC and PlanetRead — not necessarily as candidates to back but as seeds for crystallising a new model for collective action — my own response to Cave’s first question is that, no, CEOs are not likely to have the skills to change the world. Without sustained engagement with the ground realities of most social challenges, CEOs and others who may be running social responsibility programmes in companies cannot be expected to come up with, and develop to maturity, systems changing solutions.
On the second question, the good news from this gathering is that I witnessed ample signs of humility and strong intent among family businesses to partner with social entrepreneurs. Several family business leaders expressed a desire to collectively work on global challenges and scalable solutions, with the caveat that the community will have to come up with its own criteria to select both the challenge and the specific solution to put their combined heft behind.
In the many snippets of conversations over the dinner table, coffee and in the hallways, I got my first taste of the potential of family business leaders and social entrepreneurs to deep dive together to address specific global challenges. Social entrepreneurs may bring to the table the core of a proven solution, within a specific context. Family businesses have the ability to scale, measure impact, and influence policy, including the ability to reach within earshot of a head of state.
Perhaps, as important for the social space as it is for businesses, they can not only take carefully selected social innovations through the stratosphere, but equally engage in the equally valuable act of creative destruction.
(The writer is a social entrepreneur and is on the faculty of IIM-Ahmedabad)