Tom

Culture, Purpose and Social Value drive ‘Responsible Business’

October 16, 2017 By Tom

Published initially on Linked In, This is a contribution to the debate on The Future of the Corporation currently happening at the British Academy and prompted by an event there in September 2017. The theme is consistent with that of my new book, The Company Citizen: Good for Business, Planet, Nation and Community, now available to pre-order from Routledge.

Long read warning! 2,500 words!

Abstract:

In any debate about the future of corporations there’s a place for different business forms. Those such as B Corps, which focus on the social and environmental benefits that business can create, are most welcome. However, large scale change comes from taking a less prescriptive approach to business forms in which culture, purpose and social value are cultivated within all businesses: a movement rather than a certification process or legal form.

….

This planet’s days are numbered – and with it, human society.

It’s precisely to avoid this nightmare scenario that intergovernmental bodies have spent three generations trying to pull together and put things right, joined latterly by a growing band of ‘responsible’ businesses. There’s a wry irony here as there’s a case to believe that corporations – with their historic lax attitude to pollution, climate change, exploitation and resource depletion – have contributed considerably to creating today’s ominous state of affairs. But a line must be drawn; and today’s responsible corporation (together with many other businesses) not only shares the goals of a sustainable planet and society but actively works towards achieving it.

The future corporation is one, therefore, that respects the triple bottom line of people and planet as well as profit, is aware of its own impact and measures its externalities, seeking to maximise those that are positive and minimise the negatives. Responsible companies in Britain today can come together to express their commitment to a fair, secure and sustainable world by:

Joining Business In The Community to share good practice on community engagement
Adopting the principles of the Blueprint for Better Business, based on Catholic social teaching
Accounting for how well their activity supports the UN’s Sustainable Development Goals, as Unilever, Diageo and others have done
Sharing a common system of public reporting such as the Global Reporting Index
Adopting a timetable for becoming net zero carbon, joining over 100 supporters of RE100, in support of the Paris agreement on climate change
Becoming a social enterprise or a B Corp, to publicly state that their quest for profit is of no higher priority than is their desire to contribute to a fair, safe, happy and secure world.

This is not an exhaustive list: the UN Global Compact, Future Fit, the Organisation for Responsible Business, the Institute for Business Ethics, the Business and Human Rights Resource Centre, Transparency International, the Ethical Trade Initiative and Forum for the Future are all promoting responsible action whilst Responsible 100 and BITC’s Trading for Good offer SMEs simple frameworks for development. The NewCo movement channels entrepreneurism with responsibility whilst many sectoral organisations (such as the Extractive Industries Transparency Initiative) also exist. The Social Value Portal gives advice. Meanwhile, dozens of think tanks offer evidence and opinion in the same direction; no one is seriously or overtly backing the alternative horse: a rampant rush to oblivion.

That so many companies now share similar, complementary and responsible goals is remarkable; together they constitute nothing less than a movement potentially so powerful that it really can move the dial towards sustainability and a secure future. It’s precisely because business is the user of raw materials, the liberator and destroyer of energy resources, the engine of the economy upon which wealth and public services depend that it has no choice but to take these matters seriously!

Responsible business has thus become nothing less than a (small ‘p’) political movement. It’s not a single organisation, silo or brand and any attempt to rationalise the movement as a whole would be like herding cats; but nor is this necessary, as the movement has momentum of its own. Whilst different companies’ goals or speeds of travel may not be identical within the movement they are complementary and mutually supportive. This is why it didn’t really matter when Trump announced that he was pulling US out of the Paris accord: American business, its investors and civil society were already committed to those climate goals and no contrary decision by the President was going to change that; such is the strength of a movement.

A political movement has to be inclusive, to seek to build support rather than divide its own numbers, to promulgate the tools – such as the Circular and the Inclusive Economies – that drive sustainable success and to encourage the reticent rather than to count them out.

Some have chosen to do this through the erroneously labelled ‘not for profit’ field of social enterprise, where profits are used to reduce prices, subsidise services or support charitable causes rather than taken out of the business as disproportionate dividends. There are perhaps 70,000 self-styled social enterprises in Britain, over half of the 120,000 companies that the Government has identified as ‘Mission-Led’, of which 13,000 have adopted a specific legal form called the Community Interest Company (CIC). In September 2017 the Cordant Group, with 120,000 employees, took the pioneering step of eschewing its former ‘profit maximisation’ status and re-inventing itself as a social enterprise.

That Mission-Led Business report, led by the imaginative and responsible Nigel Wilson, CEO of Legal & General, strongly supported the idea that businesses could be both responsible and profitable at the same time. In the long term, businesses that show the greatest commitment to the environment, their employees and the common good can show even greater returns than those led only by short term financial outcomes. The report even suggested that the mission-led business might be afforded the option of a special legal status in Britain, that of ‘Benefit Company’.

This recommendation is more than a nod to the B Corp movement, an American concept which has UK business followers and which evolved from a campaign in the States for legal status for ‘for purpose’ companies over a decade ago. American company law then assumed that every company was designed for profit maximisation on behalf of its shareholders. A campaign started to have the Benefit Corporation, whereby a social or environmental purpose could be listed as the prime goal of a business, fashioned into US law, state by state. When Delaware agreed to adopt the status the battle had been won: the vast majority of US businesses are registered in that low-tax state so the option had become, in effect, open to all.

Such a legal status was never necessary in the United Kingdom where the 2006 Companies Act confirms, as Fletcher and Perry acknowledge in their paper to the British Academy of December 2016, that companies are already permitted

‘…to adopt purposes other than the benefit of members and, where companies adopt such purposes in their Articles, the directors are obliged to promote the success of the company by seeking to achieve the relevant purposes’.

It’s always been open to British companies to prioritise goals other than profit although, it stands to reason, they would always need a degree of acquiescence from shareholders and investors (responsible business tends to attract responsible investors). There’s no doubt that in Britain a company’s ‘licence to operate’ today demands a more responsible stance than it did in the past. Businesses that strategise over the longer term have little doubt that their long term thinking generates higher profit for shareholders over time. In the case of private companies (with no shareholders) no such external constraint exists. Historically, family-owned companies tend to take that longer-term, generational perspective explaining, perhaps, why some of the most socially engaged private firms, such as Wates and Willmot Dixon, both in construction, and Cordant (see above), are family-owned.

An offshoot from the Benefit Corporation movement in America was the global phenomenon that is the B Corp. B Corp is not a legal status but a certification scheme based on achieving a score of 80 on a biennial assessment of 200 externally validated criteria. There are over 2,000 B Corps, mostly American but including 150 in Britain, where the status has been available for over a decade. This is the same length of time over which CIC status, as we’ve seen, has now topped 13,000 in UK alone. (For perspective, the world generates 3 million new companies every year).

In 2012 I visited a pioneer B Corp, the Greystone Bakery in New York, a successful business which generates social value by employing only ex-offenders and ex-addicts on its shop floor. On the same visit I drove across green Vermont to meet the management of Ben & Jerry’s ice cream, then the world’s largest B Corp despite being owned by a giant corporate, Unilever. Two years later I had the privilege of looking around Natura, South America’s biggest cosmetics business and an absolute saint in terms of minimising environmental impact and maximising stakeholder engagement. It subsequently became the world’s largest B Corp.

The B Corps movement has done a great job in raising its profile considering the fact that most of its members are small – and many have had the advantage of adopting B Corp values early in their lives, avoiding the disruption of having to retrofit good practice. It certainly punches above its weight in terms of mentions in reports and learned journals on the theme of corporate responsibility or the future of business.

But B Corps alone are not the answer.

As stated earlier, a successful movement must be inclusive and not divisive. It must welcome new members not because they have ticked the right boxes but because their culture is positive, their ethical compass is set in the right direction and their actions are worthy of the name ‘company citizen’.

The bureaucracy involved in demonstrating consistent and convincing evidence that the entirety of the activity of a corporate giant conforms to B Corp standards every two years is huge. It’s known to have deterred some global corporations from registering (and half of Britain’s private sector economy of 5 million businesses is represented by a few hundred giant corporates).

There’s a way around this which was proposed by another report on responsible business published in 2016 – in the same week as the Mission-Led Business Review, with its rosy view of B Corps. In ‘Everyone’s Business’ the Centre for Social Justice proposed that every company should be required by Companies House to list its purpose as a condition of registration.

That’s a great idea. Companies would be free to write ‘screwing the maximum amount of profit out of every transaction’ if that’s what they truly believed their purpose to be, but they would be judged on that purpose as well as on their performance. The important thing is that if we expect our businesses to be agents of environmental and social change then we must encourage them to do better where necessary, praise their achievements and reward them through our custom and otherwise. Laying down arbitrary criteria to decide who’s certified, who’s ‘in’ and who’s ‘out’ of the silo, holds back the development of a movement (in contrast to the evolution of an organisation, which has to know who its members are) in these ways:

Threshold standards encourage the ‘scourge’ of compliance, in which companies achieve a legal or acceptable level and make no effort to achieve more. Responsible business is a journey and not a winning post.
Those deemed to be outside the tent may feel disengaged from the movement, even rejected, losing motivation to conform.

Ultimately the market may prove the biggest incentive for companies to be responsible towards people and planet. Over a third of British retail consumers take ethical considerations into account when making purchases, a higher proportion than in any other country. That market has been maturing and may yet grow larger still. Another key factor is employee engagement which, many studies show, is enhanced by a purpose-driven business in a country where half of our working population don’t think that their current employment represents a force for good in the world. Purpose leads to employee pride, to loyalty, to lower recruitment costs, to that feeling of ‘I’m making a positive difference’ so conducive to productivity (and to good mental health).

We have recently acquired, in British law, the concept of ‘social value’. The law states that when procuring a service from an outside body (worth more then a defined threshold) a public sector entity may take into account the ‘social value’ of that contract and, where the net difference in social value between two tenders exceeds their difference in monetary value (up to 10 per cent of the value of the contract) then the higher tender may be accepted. A third of local authorities already employ this (optional) law to good effect, and some have gone beyond the law by including goods and ‘works’ in the equation, thus extending it to all purchases, or even abandoning the threshold. In Scotland, procurement law goes further. Even more exciting, the computer giant Fujitsu has told over 1,000 suppliers that it, too, will employ social value criteria when purchasing from them in future.

The concept of social value is an inclusive one: every company provides some social value simply by employing people (whether they all provide net social value is a moot point) though adopters of the Act are more concerned with things like carbon footprint, community engagement and apprenticeships.

Social value should not be the preserve of the public sector alone, though it should be better employed by central government and the health service than it currently is. Social value can be demonstrated, procured and built upon by every company if it puts its corporate mind to it.

Social value is a concept which every company can embrace; when linked to the purpose of a company it’s a powerful driving force beyond compliance and towards cultural change – without compromising commercial incentives. Culture is a spectrum and not a staircase, no one is excluded. A company imbued with purpose will change its future because the social and environmental values that define a ‘responsible’ purpose today do motivate staff towards greater engagement, productivity, customer service, reputation and, ultimately, sales.

This is not just theory: ask M&S how its Plan A has turned its massive procurement operation into a force for good; ask IKEA, committed to creating employment for 200,000 refugees in its supply chain whilst achieving a zero carbon footprint; or Unilever, whose ten year Sustainable Living Programme, aligned to the Sustainable Development Goals, is literally paying dividends. Ask Nike about the circular economy, Nestlé about human rights in the supply chain, Boots about large scale charity partnerships based on common values. Nor is ‘good’ confined to large companies: in September 2017 Barclays showcased 27 smaller businesses from around the world, all in rapid growth mode, who had each proved the business case for tackling a specific issue of human or environmental concern on a grand scale: they are, no doubt, the tip of the iceberg.

We should not have to choose what sort of business we are. Every business interested in its future – let alone in our collective future – has a vested interest in being socially and environmentally responsible. Ultimately such a movement, championing that common cause, is not helped by splitting us into who’s ‘in’ and who’s ‘out’.

ends

Filed Under: Blog

Making an ‘Unreasonable Impact’

October 12, 2017 By Tom

I published this article on Linked In in October 2017:

The world faces problems beside which our local issues look like small fare: food, energy and climate to name but three. We’ve always looked to governments working in collaboration to solve them – but where are the ideas that will drive those solutions?

Could we slash the cost of micro-solar power for cooking food and boiling water directly, saving millions in the developing world from the poison of kerosene fumes?

Why don’t we develop a network of dirigibles to act as phone masts, bringing state of the art 4G and 5G communications to every community in the world at a fraction of the cost of the current network?

What’s preventing us from growing healthy food within – and beneath – our cities on a commercial scale, utilising LED lighting and a fraction of the water of conventional agriculture, vastly reducing transport costs?

How about making edible cutlery from biodegradable rice and wheat, massively reducing the mountain of waste plastic, abolishing the transfer of toxins from that plastic into our food?

These are not only brilliant ideas but they’re commercial propositions; if you don’t believe that then ask the entrepreneurs who are putting them into practice, creating the sort of sustainable and inclusive economy that the world needs to survive. Ask the company that’s providing GPS services to allow farmers to optimise their agricultural output and minimise fertiliser use through their mobile phones. Ask the entrepreneur who’s turning industrial waste gases into ethanol. Ask the business that’s manufacturing tasty, high protein chips – from flour made from crickets.

All of the above were amongst 27 companies recently given a platform at the Barclays Unreasonable Impact event, aptly staged at the Royal Institution, the historic home of scientific innovation in London. They were not there to ask for money, though eager impact investors did make up a fair proportion of the audience, and nor were they talking about ideas alone. They were there to tell us about their businesses, companies already employing real people and benefiting, in some cases, millions if not billions of people – especially (but not exclusively) in developing countries.

Unreasonable Impact taught me that innovation, economic inclusion and reducing the cost of doing good are – and must be – part of the purpose of business. In fact, these are all roles that governments (and certainly governments alone) cannot deliver. Every one of the companies we saw – from slashing the price of 3D printing using waste plastic to making the circular economy real through the next generation of recycling – is viable, active and ambitious, motivated by making the world a better place. Scaling impact to create 200 million jobs worldwide suddenly looks possible.

So much about our world is depressing right now: did you know that climate change will halve the world’s supply of coffee in just twenty years? Unreasonable Impact was an optimistic breath of fresh air.

Which reminds me: another of the companies uses innovative technology to bring peerless, accurate, real time, local data on air quality to millions of their subscribers. A breath of fresh air, indeed.

Filed Under: Blog Tagged With: business, business case, SDG, solution, sustainable

Business doing good is doing good business

September 12, 2017 By Tom

Tom spoke to a gathering of London Futurists at Birkbeck College, London, in September 2017. His theme – Why Business Doing Good is Doing Good Business – very much pre-empts The Company Citizen which will be published late in 2017.

This half hour video includes a 20-minute presentation followed by a Q&A. (Scroll down to the third presentation).

The talk complements a chapter Tom wrote for Derek Bates’ book ‘Agenda for the Future’, also published in September. Here’s that chapter:

The Case for the Company Citizen

Society needs ‘company citizens’ to be better engaged in our communities: fortunately, it’s in business’ interests to pursue the same agenda. However ‘better’ shouldn’t mean ‘more of the same’: rather business needs to rethink its role in society, at local and national levels.

There are moral, political and business cases for this change and pioneers from whom aspiring businesses can learn. There’s also a global framework for such activity – the United Nations’ Sustainable Development Goals – and ample evidence in localities across the world that engagement works in the interests of the companies, beneficiaries and nations.

The moral case

The moral case is that those who exercise power should do so responsibly, not simply to mitigate any negative impact of their activity on society or the environment but in a socially positive way. This collaborative spirit drove the formation of the United Nations, bringing together the world’s economic and political powers – 20 nations in 1939, over 50 by 1945 and 193 today. An early associate, from 1946, was the International Labor Organisation – whose mission to promote a human dimension to business practices dates from 1919.

That the UN is the principal voice of moral authority on a global scale is beyond question even if its impact may have underwhelmed on occasion. In 2000 it established 8 global Millennium Development Goals, based on ideas of community, fairness, dignity and basic rights, and surprising no one.

The MDGs set 15-year targets but their successor programme, the Sustainable Development Goals, are subtly different in that they challenge not just governments and communities but also businesses to ‘walk the walk’. By adding Goals on energy use, clean environments and the better management of (industrial) raw materials business has been irretrievably implicated in their implementation.

That moral charge on business, to accept some responsibility for achieving these UN goals, based on universal values, is supported by a stark statistic: 60 of the world’s 100 largest economies are no longer countries but businesses. How different is the 21st century from the mid-20th!

Whatever the countries of the world decide to do together, through UN conventions, the Paris Climate Change Agreement or other accords, they will not achieve their goals unless business is on board. Where once it was enough for business to co-exist with global society, not standing in its way, today the SDGs, the embodiment of decency, sustainability and fairness, absolutely rely on the active involvement of the corporate sector. This is a challenge that global company citizen pioneers like Unilever have taken up with relish.

People regard paying fair levels of tax as a moral duty and they do not understand why, on their modest incomes, they’re contributing more tax than some major multinationals which pay none, despite trading here. Nor do they accept that even top business leaders need to be paid so much more than the most accountable person in the country, the Prime Minister: shareholder revolts on top pay packages are becoming commonplace. For the first time in half a century business spending on dividends is growing at the expense of employee pay and people are naturally suspicious that companies who arbitrarily headquarter themselves offshore are ‘up to no good’. That the cost of a business’ ‘licence to operate’ is partly measured in moral terms has never been more true.

There’s an old saying ‘if you’re not with us, you’re against us’. As we explore the (small ‘p’) politics and the practicality of the case for greater business engagement with society, that case for engagement will be seen to apply as much in local communities – if not more – as on the global stage.

The political case

Britain is one of the world’s most generous countries. Charitable giving, volunteering and corporate philanthropy are all at a high, if static, level. Over the last 60 years a growing and increasingly professional voluntary sector, in particular, has shared with government and public sector the responsibility for delivering services which meet people’s basic and other needs. Recently a number of trends have challenged the dynamics of cross-sector relationships: ‘outsourcing’ of services has proved controversial; commissioning practices may have perverted charity missions and encouraged dependency on government funding; poor privatisation practice has allowed questionable profits to be made whilst reducing the accountability (and sometimes the quality) of such services.

On the other hand, there’s no doubt that cross sector partnerships can increase the qualitative value of services and that business efficiency can make them more effective (and even cost effective). Although these positive virtues are not guaranteed, cross sector working is here to stay. Indeed, we have seen businesses and charities voluntarily come together to work collaboratively without the need for fine print in a government contract.

A decision to outsource to a ‘for profit’, or an inaccurately labelled ‘not for profit’, company is a question not of economics but of values. Southern Cross was a private equity-owned company which grew to be Britain’s largest private provider of care home beds before its spectacular collapse in 2011, when it lost 98 per cent of its share value. The oft-quoted example is a case in point. How, it is asked, can a company whose mission is the maximisation of short term profit be trusted with the care of frail and vulnerable people? That is not to say that a ‘for-profit’ company with a different ethos and more nuanced values cannot be trusted with such a duty; is that really so different from a body with overtly social values which employs business tools to attain them?

This blurring of historic sector boundaries is permanent. So, it appears, are government austerity and its consequences, public spending cuts, the dependency of the third sector on government funds and the flatlining of charity income in the face of growing demand on their services. So are rising levels of inequality and the ‘poverty premium’, the phenomenon whereby elements of the cost of living are actually higher for the poor than for the rich. Official figures show more people in working poverty than ever before, despite legislation on low pay, and they’re employed disproportionately in the private sector.

It’s no surprise, therefore, that the poorest communities are often becoming, literally, more hopeless. Those least able to afford it have borne the brunt of spending cuts. This is a political reality in which it’s not for business to take sides, as all politicians are committed to helping the country achieve stability in a sustainable way, according to their vision of what is fair and possible, following that global financial crash. Aren’t they?

But neither can business stand idly by. The economic case for being involved in the relief of poverty is that poor people are poor consumers, a challenge central to the ‘shared value’ philosophy of Michael Porter. So too are sick people, and those who are isolated – geographically, digitally and socially. Those who lack dignity often lack capacity. Employees who are sick, stressed and unfulfilled are suboptimal performers – factors which will be influenced by the world outside the workplace. There’s also a business case for engaging with the community, to which we will return, but the political case is summed up by the concept of the ‘Company Citizen’.

A Company Citizen, like any other, cares for the welfare of fellow citizens; works with them to address common issues in the community; is generous with their time, skills and other resources. The Company Citizen is actively engaged, not in Party politics but in lobbying for what is right and helping mitigate what is wrong.

And yet in the most deprived areas there are fewer employers, even SMEs, compared to slightly more affluent areas. Ironically, research shows that those communities have fewer successful voluntary sector organisations too: they lack the social capital necessary to cope with poverty and social exclusion, withstand ongoing economic shock, even to organise at a basic level. Where business is absent, how can the Company Citizen help?

Community organisations are the key. Ask them what they most need and they will probably say money, but it’s not true. They need skills: skills to plan their operations, to strategise, to lobby, to even provide for themselves through sharing. These are essentially business skills that can be given away by a company at no cost, in the course of an ongoing and committed relationship with a community. Get these skills right and whilst the money won’t necessarily look after itself at least it will go further. Better still, skills transfer is a two way street and workers will become better employees, better people, through their involvement.

According to a 2016 report by Social Enterprise UK, one third of local authorities have chosen to implement the 2012 Social Value Act. This says that in commissioning the supply of services over a certain value a council may insist that bidders demonstrate positive values towards the community and the environment: reducing carbon footprint, increasing apprenticeship levels, encouraging employee volunteering and more. In Manchester and Birmingham the councils apply these values to all of their tendering for goods and services and can demonstrate benefits for the community as a result. In those cities a business that wants to trade with the council has to be a Company Citizen.

The business case

The business case for philanthropy per se is minimal. Philanthropy is too often regarded as donor-focused and paying little heed to the long term impact of the funded project. Many businesses give big sums from corporate coffers to charity as a matter of course, boast about it then forget it: currently £6 billion per year. This not insignificant sum is, of course, welcome but could be utilised better, as more sophisticated corporate donors are discovering. Philanthropy can undoubtedly enhance reputations but this falls apart when a company acts in ways which undermine the values associated with their philanthropic gestures. This is called ’greenwashing’.

Many community engagement activities are more sustainable than simply writing cheques:

employer supported volunteering can transfer, boost and extend employee skills
a business with value-led purposes better engages its employees
a values-led, ethical and sustainable supply chain creates a broader community and enhances reputation
employee-generated ideas can reduce carbon footprint and promote innovation and effectiveness.

An engaged employee is more productive and loyal than others; stays in post longer, reducing recruitment costs; and is a better informal ambassador. A company with CSR or ESG values integrated into its mainstream activity recruits a higher calibre of graduates, especially amongst millennials; and let’s not forget the marketing benefits of the best charity partnerships, too, like Boots with Macmillan Cancer Care.

SME start-ups with a social primary purpose, so-called social enterprises, have a lower failure rate than others. On a global scale investments in ‘ethical’ or ‘responsible’ causes produce higher long term returns than do mainstream FTSE indices.

A conventional business case in a new environment.

Conclusion

In the 18th century Adam Smith argued that a business could only sell what someone would buy and in the 1930s Milton Friedman argued that making a profit was the primary purpose of business. Essentially, both are correct: without a return on investment any business will fail and a company trying to sell a product that no-one wants is also doomed. But these are inward-looking values which don’t completely reflect today’s complex business world which, while not perfect, is in a state of flux.

That’s because over recent generations an appreciation has emerged of the external responsibilities that business has to all of its stakeholders – employees, customers, suppliers – and not just to its owners. Citizens accept that paying tax is both a moral obligation we all have to help those worse off than ourselves and the price tag of that ‘licence to operate’, so tax avoidance and evasion are increasingly frowned upon. Clearly not all companies agree; but contributing fairly through taxation is surely a hallmark of citizenship.

Most companies accept the stakeholder argument and would not dream of bending regulations to suit their own gains or, even worse, risk being discovered doing so – but the ‘external duty’ of company citizenship is not yet universally adopted.

Still fewer are the companies that adopt a philosophically global approach to citizenship. One of the two responsibilities enshrined in this duty is from history: it’s to the future. In the era of family-owned firms companies were driven by the desire to hand a thriving business over to the owner’s children. That generational perspective has been lost and short term thinking has come to dominate business practice: witness the shrinking time spans of share ownership and CEO tenure, the growth of impatient venture capital, the use of quarterly reporting and aspects of the bonus culture.

Let’s return to the positions of business and charity relative to each other. Britain has 5 million companies, 99% of which employ fewer than 250 workers and 2 million employ no one at all (witness the veritable army of self employed). The average company has an annual turnover of £500,000 whilst the biggest are mind-bogglingly large: a single supermarket superstore can turn over a million pounds each day, the same as the charity, Oxfam.

Of 180,000 registered charities in Britain only 14 have a bigger turnover than Oxfam. 80% turn over less than £100,000 per year and half have an income of under £10,000. So big are the biggest charities that charities’ combined turnover is £70Bn and average income is £400,000.

The American company Salesforce employs an ‘integrated philanthropy’ model, giving to charities roughly 1% of their turnover and time. If every company did the same this could generate £25Bn of value in Britain for charities (some of which is, of course, already available).

If we assume that each charity is not 1% but 75% effective, interpreting 75% of turnover as social impact – which may be generous – we find that they create £53Bn-worth of impact. In other words, 100% of charity effort at 75% efficiency delivers only twice the social impact that 1% of business effort could, if it was pointed in their direction.

Salesforce targets charities which are supported by either the company or its employees, to create new capacity. Now, if all of that 1% of business turnover, across Britain, representing the creativity, impact and passion of businesses were focused on increasing the impact, efficiency and effectiveness of charities and the good that they can do…

Our poorest communities are in crisis. They feel ignored, excluded, exploited. They lack the social capital that a vibrant voluntary sector creates – which is why the otherwise worthy concept of David Cameron’s Big Society was always doomed to fail where it really mattered. Business can make the difference, partnering with others in the voluntary and public sectors, but only if it adopts the garb and practices of Company Citizenship. In doing so they will find they become better places to work, better at what they do – and better citizens.

Filed Under: Blog Tagged With: corporate responsibility, CSR, SDG

We need to invest in active citizens

September 12, 2017 By Tom

Tom’s post – If we want active citizens we need to invest in the skills of citizenship – appeared on the blog page of Civil Society Futures in September 2017.

Citizenship’s a wonderful thing. The very word empowers; it places identity on a plane above being a mere consumer of goods and services, a statistic or a ‘subject’ whose will is subjugated to that of some higher rank. It’s also a collective concept – citizens together – which, being inclusive, confers dignity.

But it’s also too often an abstract concept, along with the rights and responsibilities which attend it, absent from the vocabulary of those ‘just about managing’ or downright struggling. In those communities where qualifications, opportunities and confidence are low ‘citizenship values’ are too often not even of academic interest.

As a Member of Parliament I used to represent over 20 local authority wards, of which one was in the 5 per cent most deprived in the land and two more in the bottom ten per cent. In that most deprived ward disability and other benefits were the largest source of household income. Other deprivation-linked metrics – obesity, smoking, failure to breast feed, low educational attainment – were the worst in the county. The social housing estate at the heart of the ward was purpose-built; that purpose being (in the early 60s) to complement inner city slum clearance by hiding the community on a greenfield site away from established centres of population.

When a colleague from a solid working class seat said that there was ‘no tradition’ of advice surgeries in his patch, and his office received far fewer letters than mine, I plotted on a map the addresses of constituents who’d approached me for advice. Those from communities in most need, I saw, were least likely to contact their MP. My first thought was that the ability to describe difficult concepts in written English, a great tool of engaged citizenship, is often lacking in deprived areas.

To this day this isn’t an issue of native language. This community was (and is) mostly white and English-speaking; many of whom, on rare forays into writing paragraphs, would be embarrassed, shamed or let down by their inability to communicate – and they knew it. Needless to say, their understanding of democracy was, let’s say, ‘incomplete’. Their analysis of their community’s problems was perceptive but their ambitions for putting things right were limited. They had little faith in the ‘powers that be’; they weren’t active citizens – other than occasionally collaborating with neighbours where need or common interest and capacity allowed.

On that estate of 1,600 homes public services did exist: a doctor, a community centre, a nursery, primary school and library. The private sector consisted of four small shops and two pubs (one of which has since closed) and many of those employed there lived elsewhere; there was no local employment to speak of, nowhere to build skills, create useful experience, develop team working or create a sense of achievement. Business is largely absent from deprived areas – so too (as IPPR North has pointed out) is voluntary sector infrastructure.

In short, it’s as though citizenship had been designed out of the estate.

After generations of status quo classes C2DE, who live on such estates, are stirring – but not in a good way. Low electoral turnout, reflecting a genuine lack of engagement, is commonplace in such wards. When they do vote they tend to vote Labour. Or do they? The 2017 general election saw a massive 12 per cent swing to the Conservatives amongst C2DEs even though it was they who’d borne the brunt of seven years of austerity, falling buying power, benefit and service cuts. It was an ‘against’ vote, against the party which purported to represent their own interests – and (being in Opposition) had failed to improve them. In 2016 a bare majority of Britain voted for Brexit. Even Brexit supporters acknowledge that many of them voted not for ‘a new role in the world’ but against the establishment generally, officialdom, ‘them’ or just to protest the lot they had been cast in life. ‘Europe’ was a bogeyman. It’s no coincidence that the strongest correlation with voting in the referendum was with educational background: those with fewer qualifications were much more likely to vote ‘leave’.

When we talk of citizens collaborating to complement, extend or even replace public sector provision or private utilities – perhaps as an energy-purchasing consortium or simply for their own fulfilment and enjoyment – we’re generally talking of communities led by the middle class. In such places organisational skills are commonplace and resources are bestowed upon resourceful people. The language spoken has a different cultural context than on the deprived estate: it’s richer, more expressive, a more useful tool. Rational concepts like risk or consequences of actions are freely employed in planning and decision-making, fields in which the middle class have more experience. In short, whilst both working and middle class areas might appear to be dormitories their skills, capacities, confidence and ambitions are poles apart.

Citizenship isn’t just a matter of one’s relationship to a community or a social hierarchy, nor simply a measure of participation – but also of values. It reflects access to social capital, communication skills and the wherewithal, physically and intellectually, to work both collectively and with outsiders to achieve change. Culture and values cannot be imposed from without but do need feeding, nurturing, promoting. Empowerment and engagement cannot be created overnight.

Many today believe that our society must change in a way which is more devolved, more locally provided for than at present, and so it must; the era of ‘big is beautiful’ in public services is over. However, simply passing responsibility down the line assumes levels of citizenship capacity at the grass roots which the most needy communities simply cannot deliver. Three things are needed to create community confidence in such places:

Basic skills, especially literacy, need to be prioritised as never before, in both children and adults.
Brave decisions from Government and local authorities to share power – even give it away – to local communities; a long term, phased, organic process not driven by some arbitrary timetable.
Investment in early intervention in education, health and welfare (when programmes such as Sure Start are cancelled progress is not just ended but reversed).

Even Britons who share a common language are today far from equal in what they are able to achieve. For stability, security and shared prosperity this must be addressed; otherwise those who struggle today will be left even further behind.

Filed Under: Blog Tagged With: citizenship, civil society, civil society future, democracy, devolution, skills, social justice

Britain’s ‘voluntary’ overtime crisis

July 25, 2017 By Tom

Far from being overpaid, public sector employees are showing their commitment to their cause, voluntarily, to a level which borders on exploitation, writes Tom Levitt (for Progress Online, 25 July 2017)

When Sally Plummer stayed on after the end of her shift to aid a patient suffering a cardiac arrest she thought little of it, knowing that this was the normal reaction of a conscientious nurse. When her good deed generated an £80 fine for overstaying in the hospital car park, which the authorities refused to waive, she saw red – and quit her job.

Perhaps Plummer’s was an extreme reaction but to two million public sector employees who contribute 8 hours a week of ‘voluntary’ (i.e. unpaid) overtime the dilemma is a recurring one. If your contract doesn’t stipulate the terms of any overtime or your extra contribution is not specifically endorsed by management then your excess hours won’t be paid. In this way public bodies, especially health and education, benefit from an £11Bn contribution of unpaid work from staff, often exceeding 8 hours a week, according to the GMB union.

This means that some workers aren’t being paid for up to a quarter of their working week, with 15 hours of unpaid overtime not uncommon. Excessive hours, say teachers’ unions, are a principal reason why many leave the profession.

Earlier this year the TUC reported that across the whole economy employers were benefitting from £33.6Bn-worth of unpaid work. Low and higher paid alike were affected, with London being the UK region where most employees – over a quarter – regularly worked some unpaid hours.

They proclaimed 24^th February ‘Work Your Proper Hours Day’ as it represented that fraction of the year which workers collectively were contributing to work for free. On that day employees were encouraged to take their full breaks entitlement and leave for home on time. Frances Grady said “The best bosses understand that a long-hours culture doesn’t get good results. So we’re asking managers to set an example by leaving on time too.”

Pressure to work unpaid extra hours is often covert: those in caring professions like Plummer understandably don’t want to leave a client ‘in the lurch’; when long hours becomes part of the culture it becomes difficult to resist.

Even where unpaid overtime is anticipated (yes, such contracts exist) the result of doing it cannot reduce your average wage below the hourly minimum rate and nor can you be obliged to exceed the legal 48-hour maximum week. This was the judgment in a case brought by Unite in the European Court of Justice. Should Brexit actually happen the Working Time Directive would transfer to UK law – but for how long would its protection last? It would be relatively easy for a future UK government, one not sympathetic to workers’ rights, to water down the directive once outside the protection of the European Union.

The reality is that public sector budgets in particular are not going to be stretched or extended to reward those currently unpaid hours. Caring professionals, whose official pay over recent years has been static or even fallen, will find themselves obliged to make difficult decisions about their work/life balance; those who decide to keep their ‘voluntary work’ to a minimum may render themselves vulnerable to managers who question their commitment when cuts are on the agenda.

The real challenge here is for managers: to maintain the ethos and effectiveness of the service they run whilst engaging their employees to the full and genuinely making them feel valued – within existing budgets. They must cut their coats according to their cloth, as the saying goes. Today, far from being overpaid – Philip Hammond, take note – public sector employees are showing their commitment to their cause, voluntarily, to a level which borders on exploitation.

Filed Under: Blog Tagged With: Brexit, overtime, public sector, social justice, trade unions, unpaid work, working time directive

Further Reflections on the General Election

June 16, 2017 By Tom

A few days after the election a colleague tweeted:

“Rise in support for Corbyn, Sanders & other movements tells us… people are open to big narratives about structural change” #systemschange

The reason I don’t think this is true, even though the respected economist Stephanie Flanders said the same thing to the RSA after the Brexit vote, is as follows.

Brexit, Trump, Saunders, Netherlands, Austria (first time round) were all examples of people voting principally for candidates defined by what they opposed, usually ‘the establishment’; they were not votes in favour of a particular ideology or plan. So too the election and re-election of Corbyn within the Labour Party – brought about not least by frustration from some Party stalwarts and ideological support from newer, inexperienced and predominantly young members. In its own way Macron’s vote in France was negative too, rejecting both traditional parties as well as the obvious (and established) FN ‘protest’ option; though En Marche’s subsequent Parliamentary vote has set course for a positive way forward. The problem with installing a government on the basis that they oppose what you oppose is that you have no yardstick by which to judge success – who do you vote for when they disappoint? That way anarchy lies.

I was talking to arch-Brexiteer Daniel Hannan earlier in the year: I said that everyone who supported ‘Remain’ knew what they wanted the world to look like in the weeks after the vote, whilst barely no two Brexiteers could agree on their vision of life in or out of Europe – and he agreed. Research shows that although many people who voted Brexit (overwhelmingly the less well educated) had no vision: they were voting ‘against’ the establishment both for conventional, rational reasons but also through anti-foreigner, anti-establishment, even anti-Green and anti-feminist sentiments. There was no coherence to the Brexit ‘movement’ other than around what it was – and is – against.

On June 8th in the UK election we saw exactly the same happening, not on a national scale but on a local one:

– In Scotland there was a swing against the majority party (the fact that both Con and Lab benefited from this suggests it was an anti-SNP/anti-independence swing, not a pro-Lab or pro-Con one)

– In England (apart from London and the North West) there was an ‘anti-the-party-of-my-local-MP’ swing – big anti-Labour swings in the north east (though not enough to lose seats) but also across the east and west Midlands, taking out Stoke South, Mansfield, Walsall N, North East Derbyshire; Tories lost vote share (and seats) in their heartlands too.

– London was different; Labour did exceptionally well because its people and most of its MPs are solidly ‘Remain’, because there was no sizeable UKIP vote ‘up for grabs’ and because Sadiq Khan is popular and active.

– I’ve had to revise my analysis to account for the North West, where Labour did well. It has to be seen in the context of doing very badly in the county elections, nationwide, just five weeks earlier. What changed in the interim was Andy Burnham’s election as Manchester Mayor (highlighted by perceptions of his leadership around the Manchester bombing). The words ‘Labour’ and ‘success’ came together in the media and Labour held North West marginal seats that it had contemplated losing.

The seat I used to represent, High Peak, is a case in point. In May we lost 3 of our 4 Labour county council seats there yet Ruth George won the Parliamentary seat on June 8th with an incredible 14% swing – despite being in the East Midlands. Does this contradict what I said about the Midlands above? No – because in High Peak (split 50:50 on Brexit) 90% of the population receive their media from Manchester, not the East Midlands (the rest get Yorkshire TV). High Peak was thus infected by the ‘Burnham Buzz’, the equivalent of London’s ‘Khan Chorus’. (High Peak also has an extremely sophisticated electorate – who, in their wisdom, elected me three times from 1997. Blue collar workers, who moved away from Labour elsewhere, are under-represented there).

Two more seats: by no stretch of the imagination need Labour ever contemplate relying on Canterbury or Kensington to deliver a majority. Canterbury was a fluke: a massive 40% of the electorate are students there and the timing of the election was perfect in maximising both anti-Tory passion (corralled by Labour’s policy on student fees – thank heaven we don’t have to implement that now!) and the phase of the University year. Sheffield Hallam was similar. Three weeks later, after term had ended, that vote would have been dispersed to the four winds. In Kensington an unpopular MP linked to a very unpopular cause (Brexit, in London) paid the price; her Labour successor has had an unenviable, literal, baptism of fire. Backing up this claim I cite the fact that in my own west London home the three forever Conservative wards of Chiswick all returned Labour majorities for the first time ever – because the Tory candidate lost votes by not opposing Brexit in this 70% ‘Remain’ area.

So, don’t get out the bunting quite yet. There’s a long way to go before a very fluid electorate is likely to coalesce around a progressive government or coalition… Meanwhile Labour’s big challenge is to consolidate those areas once called ‘heartlands’ as well as the conventional ‘swing seats’, where a distinct and worrying lack of progress was made in June. Perhaps this reflects the fact that our leadership has little or no experience of ‘pitching’ for the swing vote in the centre ground of politics…

Filed Under: Blog Tagged With: corbyn, election, parliament

Reflections in the cold light of (election) day

June 12, 2017 By Tom

So we have another Conservative government – but for how long? With memories of the recent coalition still raw we’ve seen a return to two party politics as an unlikely Labour leader claimed the silver medal to widespread praise. Don’t laud him too much: this was a high turnout election (that’s good) but ‘highest ever Labour/Tory vote’ claims are disingenuous, as the electorate’s never been this big before.

The irony is that this was a long, 7 week campaign which Theresa May could and should have won: her robotic, hermetically sealed, intensely personal approach was so dire it couldn’t disguise the lack of proper plans for Brexit or the economy; it was the Conservatives what lost it. It was a long campaign; if 3 weeks shorter Mrs May would not yet have tumbled down the polls so far and would have won. A short campaign delayed by 4 weeks, and the students would have dispersed from their university towns for the summer and made less of an impact (Canterbury – where 4 in ten electors are students – Reading and Sheffield Hallam might not have happened). And again the Tories would have won.

The Tory campaign was without doubt the most inept I’ve ever seen from any party – and I remember 1983 – yet Labour still couldn’t beat them! We regained our 2010 position, itself the worst outcome for Labour for 30 years. The battleground ‘swing’ seats, especially of the East and West Midlands, stayed blue – except, I have to say, my own old constituency of High Peak (1997-2010) in Derbyshire, which Labour took on a 15% swing! I can’t explain that, especially as Labour lost all but one of its county councillors there just 5 weeks earlier. The seat voted 50:50 on Brexit but it has a well educated population and few traditional working class families for Labour to alienate. Plus a weak incumbent who’d made no mark in 7 years in office. High Peak behaved as its geography suggests – like a north-west seat, with a successful Andy Burnham trending on its local media – and not a Midlands one, where Labour provided little to prompt aspiration.

Labour had no antidote for the Tory / Brexit onslaught which robbed them of Mansfield, Walsall, Stoke South and High Peak’s neighbour, North East Derbyshire – all losses which should have been even more remarkable than the gains of Kensington or Canterbury. We’ve taken such seats for granted for too long, not ‘working’ them enough between elections – which is when politics really happens.

Labour’s ‘success’, such as it was, was based on four main things:

a campaign that suited Corbyn’s ‘rousing’ style (there’s a place for making existing supporters and idealists feel good and empowered, but it doesn’t attract swing voters);
a cohesive and radical manifesto that commanded broad support across Labour as it would have in any European social democrat party (but thank heavens we don’t now have to pay for it);
phenomenal success in London, where Sadiq Khan rules OK, where there’s little UKIP presence and a very strong anti-Brexit feeling – and where pretty well every Labour candidate (except Jeremy and Diane) was united in NOT having JC on their leaflets or visiting their patch!
Scotland, where the pendulum swung Labour’s way after a ‘couldn’t get any worse’, unrepresentative 2015 result.

So now, today, we have the prospect of a Theresa May / Democratic Unionist Party ‘arrangement’ (the ‘Made-DUP’ alliance as some are calling it) keeping the Conservatives in office but not in power. I’m not too worried about the scary end of DUP politics – my dealings with them in the past suggest they are less monolithic, more tolerant on social and economic matters than they are painted, and the scary civil rights stuff ‘s a devolved issue, not for a Westminster coalition. But what’s really worrying is the impact that Government partisanship could have on Northern Ireland politics. As the neutral, the arbiter, Mrs May simply cannot slap Arlene Foster’s wrist in Stormont one day and beg the DUP battalion to follow her through the Westminster lobby the next… Either the ‘loose coalition’ won’t work or the peace process won’t. What a choice!

The most promising thing to come out of politics in the last few days is the start of informal cross party talks between backbenchers (and others?) on how to organise and deliver a Parliamentary majority against the hardest interpretations of Brexit and the ‘no deal is better than a bad deal’ faction within the Tory party (they’re wrong, by the way, very wrong). That will involve breaking down tribal barriers and genuine engagement on the issues: is it too much to hope that Opposition leaders might follow their troops into battle on this, talking the language of friendship with the sizeable number of Tory backbenchers who see this as an opportunity to get the genuinely best deal from withdrawal from the EU – or even not withdraw completely?

If we can do it on Europe I just hope that Labour’s Party managers are looking at other issues too, where Conservative allies, even ministers, can be enticed by the prospect of winning a majority vote of Parliament on manifesto issues common to all parties: on climate change, company governance, the relief of poverty, for starters.

We’ll see. Meanwhile, don’t put those garden posters away quite yet…

Filed Under: Blog

What is the future of civil society?

June 4, 2017 By Tom

“There are no boundaries”: a response to Julia Unwin’s dilemmas

Julia Unwin, chair of Civil Society Futures, published “three dilemmas” for civil society. Here, Tom Levitt responds.

This isn’t a dilemma: there are no boundaries. Perhaps a generation ago it helped to categorise but today it doesn’t, the approach needs to be inclusive. Whilst I welcome the idea of the ‘for purpose’ company, B Corp is a distraction, not least because it only applies to 100 small companies in UK after a decade of existence. It doesn’t answer this question: “If a ‘for profit’ company commits its entire work force to supporting a charity partner over a period, in innovative ways, producing value to both parties, is it behaving as part of civil society?” I’d say yes, of course. Does the same apply if only half the workforce is involved? Yes… and so on, ad absurdum. Where do you draw the line?

What’s the difference between a profit and a surplus? Does it really matter? The American version of ‘non-profit’ is at least defined (organisations dependent upon external funding for their survival) whereas ours isn’t so concise. The only true ‘not for profits’ are taxpayer-funded services, charities, voluntary groups – and companies that have gone bust. Social enterprises and B Corps are ‘for-profits’ but it’s what they do with their profits that makes them different from companies which exist to drive ‘shareholder value’ only, who take money out of their companies to benefit (principally) ‘the few’. Even CICs are allowed to take some of their surplus/profit out of the system! Shareholder value is very much under scrutiny as more and more business leaders, as at Unilever, argue that environmental sustainability and community engagement are actually the best ways to deliver long term shareholder value. Does that make them part of civil society? (When we say ‘not for profit’ we mean ‘not for dividend’ but that’s not very catchy!)

A well run business will regard its workforce as a community and espouse community values of engagement, representation, activism and sharing; the employee-owned John Lewis Partnership does all of these things. Does that make JLP part of civil society?

We don’t need to spend time and effort excluding people and organisations from our definition of civil society: if it has a bill and it quacks, it’s a duck. Let’s get swimming together…

Dilemma 2. Civil society is one of the places where we express affiliation and associational life is our great, and growing, strength. Many voluntary organisations invest heavily and successfully in developing an active and engaged membership. But trustees are charged with governing for today’s beneficiaries as well as future generations. Does that create impossible conflicts within organisations with growing and more engaged and voluble memberships? Do we risk the engagement of members who quite naturally will have demands and aspirations for now? Are members our stakeholders, or are they are owners?

Those conflicts can and do arise. As Martin Luther King said:

‘Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary’.

In other words, every charity should have the goal of putting itself out of business by conquering the cause of the injustice against which they fight; that’s how you serve the beneficiaries of the future. Whilst this isn’t usually a realistic (lifetime) goal it should, nevertheless, always be reflected in the mission and programme of both individual charities and civil society in general.

You identify two risks here: one, that I call the ‘philanthropist’s risk’ is that s/he may choose to fund a campaign which isn’t a priority, or in a way which is not appropriate, perhaps operating in isolation from others and possibly even undermining those with a more rational approach. Bill Gates is a star not for the quantity of money he donates to good causes but for the fact that he delivers nothing: he uses his wealth to enhance and coordinate proven ways of working by others. The ‘democratic risk’ is that the majority have the right to be wrong. A charity with ‘youth’ in its name had a very democratic structure which, over the years, delivered an elected trustee board with an average age of over 60. The membership had to be told they were wrong – a brave action – but re-organisation was well handled and it worked.

‘Membership’ – an active, engaged, controlling mass membership – is not the flavour of the month in the charity world where today ‘followers’ (in both the ancient and the modern, Facebook sense) and supporters are the most wooed. This helps protect the mission from transient changes in public mood and other influences (given appropriate safeguards) and leaner, slimmer organisations are more agile than those which are constantly looking over their shoulders to judge public or members’ moods. But a compromise is needed: the charity sector is paying a price, literally, for regarding supporters as money-fodder rather than building relationships with them.

Few businesses could be described as democratic but they certainly know how to build brand loyalty…

Dilemma 3. We know that reputation is a hugely valued asset. We gamble with it at our peril. And yet active civil society will always want to empower people to take action. Our risk frameworks and control systems may protect our reputation. But do they also dampen enthusiasm and engagement and make it difficult for people to take initiative? Does our proper desire to be business-like and professional, stop us from allowing people to take action?

The charity sector is notorious for its risk aversion and fear of failure. Whilst the latter is justifiably seen as letting down the beneficiary, the former prevents many (especially mid-sized) charities from maximising their impacts. A balance must be struck.

A good example of this is the way that charities regard business as a resource. Traditionally this is an arm’s length relationship although the charity arm is normally outstretched, palm upwards. A recent report says that in 2012 only 20 per cent of our largest charities agreed with the statement:

‘…by effectively harnessing our corporate partners’ competences and non-cash assets [our organisation] can make much more of an impact on our mission delivery objectives than through cash-based relationships’.

In 2013 it was 34, 48 in 2015 and 60 per cent agreed by 2016. Things are changing. The Dell Foundation has identified a significant shift in corporate philanthropy: given a choice between a $100,000 gift and an equivalent value in counselling, skilled volunteering or access to decision-makers only two fifths of the 700 NGOs they work with, worldwide, would today choose the cash.

I’m interested in what ‘action’ Julia have in mind in the last sentence. Some would argue that the swing from ‘public funded’ to ‘state funded’ charity-run services has both grown charity capacity and stifled innovation as it (usually) pays for reliability of pre-existing services. As state funding dries up (half of government funding to medium sized charities has already gone) that idea will be tested in years to come! One thing that stifles action, of course, is the Lobbying Act, often creating an over-compensation in a community not used to being regulated in this way.

If ‘action’ means ‘taking part in demonstrations’, forget it (useful for cause-building, no good at getting results). If ‘action’ means empowering collective activity to directly serve beneficiaries then that focus will be more important than ever. As the public sector shrinks (for evidence, look no further than care provision in relation to growing demand) the imagination, capacity and determination of civil society will be tested as never before. New forms of collaborative, integrated, collegiate, cross sector working are needed, based more than ever on local initiatives; the state may still need to coordinate but the routes to results are not paved with gold. We’ll never again go back to the halcyon days of even ten years ago…

Filed Under: Blog Tagged With: civil society

What’s New about NewCo?

May 31, 2017 By Tom

Tom’s June 2017 Contribution to the CBI’s Great Business Debate…

There’s little novelty in defining one’s business as a force for good. Over the years we’ve seen the emphasis on Corporate Social Responsibility wax and wane, stagnate or mature; movements like Blueprint have blossomed and we’ve seen Richard Branson’s B Team, Benefit Corporations and the B Corps emerge. The United Nations’ Sustainable Development Goals recognise the essential role that business has in ensuring that humanity and the planet continue to have a world we can share.

NewCo has no particular claim to the moral high ground but it does provide a platform for companies to share passion and purpose. The NewCo movement is neither a legal status nor a certification scheme but a coming together of for-profit companies, of all shapes and sizes, who want to do things differently. They’re enablers, collaborators, innovators, they’re transparent, open-minded and nimble, connected to communities, each other and the world through the internet. Starting in San Francisco five years ago they’re in 16 cities around the world, mostly in US but including London; driven by ideas and stories they see business as an expression of identity and reject the old corporate model of ‘command and control’. Most are small, all are ambitious and mission-driven but they include Google, whose goal is to make information accessible to all, P&G, Barclays, the BBC and hundreds of smaller enterprises.

On one day in May, 44 NewCos in London opened their doors and invited the world in. Many of the 300 visitors were London Business School MBA students and alumni, sharing hour-long seminars in up to five premises during the day. I visited three:

One celebrates good food and good cooking by serving up packs of ingredients for you to cook at home – with close to zero waste. 300 UK employees ‘serve’ customers every day across 9 countries, all coming with typical NewCo condiments of happy excitement, powerful enthusiasm and innovative flair.

Another works with major charities to develop new forms of fundraising, motivated by the fact that demand for the services that charities provide continues to grow – demand that they’ll be unable to meet unless charities can find innovative new ways to fund their work. The new era they anticipate is unwaveringly online where they seek to promote commerce, extend markets and develop business strategies. Using the tools of business, as it were, to create public good.

A third is a vibrant incubator of new talent, with a good record of turning ideas into business reality. In recent years 35 of the 40 start-ups it’s launched have failed – that’s the way of the world. One in eight ideas succeeding is a good rate and it’s been achieved by encouraging the positive attributes of innovation to go to scale.

This movement has an energy which is rare amongst businesses. NewCos are driven by purpose and operate within traditional business rules whilst integrating them with a positive way of life. It would be wonderful to think that a movement measured in hundreds could become mainstream within a decade.

Filed Under: Blog

Thanks to Toast for the fridge

May 9, 2017 By Tom

The fridge settles in to Hounslow Foodbox

I once won a holiday in Cuba, then found I couldn’t go. Apart from that, a fridge-freezer is the biggest prize I’ve ever won – and I mean big! This one’s an all singing, all dancing one in which you could house a small family. So big in fact, that…

I digested the news and went to the model’s web site, getting out my tape measure. There are 28 stairs up to my flat and this is a double breasted machine almost six feet tall. Good news! The corridor from my front door is wider than the fridge is deep – by almost 10cm. But – oh, no! – there’s a radiator in the way. And there’ll be no room for it in my kitchen without major surgery. And I live alone – do I really need it?

Half a mile from my home is the Hounslow Foodbox, a busy foodbank. Too busy. There shouldn’t be such demand, though it’s a sign of the times. As supermarkets have (finally) chosen to adopt policies of zero food waste, a shortage of supply for foodbanks is unlikely. But the policy also means a growth in the quantities of chilled and frozen food that they make available and that simulates a demand for… fridges. And freezers.

So thank you, Toast. That’s where my fridge freezer is now, looking after the food that will feed people in Hounslow who would otherwise go hungry. Some people donate a fiver, others a can of baked beans. I just handed over £1,200-worth of electrical goods, for free.

I do, however, keep very quiet about the other part of my raffle prize, which came about not from buying a ticket but through contributing to the crowdfunding effort to get Toast off the ground, a business that will (appropriately) use out of date bread for making a range of fine artisan beers. A very worthy cause in itself. I also won two dozen bottles of each of three varieties of their ale.

As I said, I’ve measured the width of the corridor and counted the stairs. I’m absolutely confident that the beer will fit both through my front door and in my kitchen. And I’m looking forward to being proved right!

Find out more about Toast here…

Filed Under: Blog

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