Creating Company Citizens

This article first appeared on the Tomorrow’s Company web site

‘Responsible business’ makes sense: there’s always something to be said for balancing your company’s needs against those of the environment and society in general. Why go against the grain?

This is the theme of my new book, ‘The Company Citizen‘.

For the CFO, there’s the knowledge that businesses which adopt more environmentally sustainable strategies produce more long term profit than those that don’t. The HR director knows that where employees are treated with dignity, and identify themselves with the meaningful mission or purpose of the company, then levels of engagement will be higher – which in turn enhances productivity. The procurement officer knows that legal and other codes of compliance are more readily accorded with when supply chains are open and transparent and the COO knows that ethical sourcing is a major contributor to removing unnecessary risk from their company’s portfolio.

When these four are happy so are the CEO and the Chair, who both know that the more they need to hide the less certain they can be about their future. Customers frequently show their appreciation of the honest, ethical, corruption-free approach by enhancing sales and market share.

Discussing his company’s newly-stated commitment to becoming globally zero carbon within a decade, a CEO recently told me: ‘This isn’t about climate change. It’s about long term thinking.’ How right he was. Putting climate to one side, carbon fuels can only become more rare, more expensive, more politically sensitive and their supply less reliable in the future; the same can’t be said for wind or sunshine, where technology costs are plummeting. A generational view puts the path of your company into perspective, puts budgeting for major projects in context and restores that business goal of years gone by: to leave a better company for the next generation than that which ours inherited.

In 1948 the United Nations came of age. It met in New York to discuss human rights, migration and other themes still redolent 70 years later. Today, if we brought together the 100 biggest economies of the world and charged them with resolving hunger, poverty and global warming only 58 would be countries – the rest would be companies. That shift in global power, recognised by the UN in the way it constructed its 2015 Sustainable Development Goals, suggests that combining global purposes with traditional business concepts of success is essential for our species’ survival; success must be tempered by a new level of responsibility. No longer confined to the optional extra of CSR, that responsibility could almost be described as epitomising the values of ‘company citizenship’.

Profit’s not a dirty word but it shouldn’t be the exclusive purpose of business. A true company citizen not only serves the market and the owners in a traditional way but pays tax willingly, with pride. The company citizen recognises that a business is a community in which employees, customers, investors and others have stakes which need to be in balance with each other. A good citizen’s a good neighbour, a community player and a friend to the environment 365 days a year, aware of both the positive and negative impacts that they have on others, seeking to accentuate the former whilst eliminating the latter.

The good news is that more and more businesses are finding ways to sustain themselves whilst maintaining the highest standards of ethics and probity, not least through the ‘new economies’ known as social, inclusive and circular. Business is increasingly looking to the longer term to reduce those negative impacts, especially on the environment.

When the day comes that it’s normal for companies to pay bonuses on the basis of carbon footprint reduction; boast in the media that they’ve eliminated slavery from their supply chain; go out of their way to limit top pay; take employees readily onto their boards; and abandon quarterly reporting, then we’ll know that we’re on the way to creating a society which includes company citizens and creates value for all.

Tom Levitt’s new book ‘The Company Citizen: Good for Business, Planet, Nation and Community’ is available now from Routledge.

‘Business shows’ are getting it wrong

As we look to business to do more on responsibility and sustainability, why isn’t this even on the agenda for the big business exhibitions? The author of a new book, The Company Citizen, visits one to find out… (Published on Linked In)

A devotee of sustainable and responsible business, I visited ‘Europe’s Biggest Event for Anyone Starting or Growing a Business’ at London’s Olympia recently. Over two days, more than 300 stalls and 250 talks catered for many thousands of attendees.

What an opportunity for entrepreneurs to learn! The chance to find out how to turn environmental and social responsibilities into business opportunities, build sustainability into business planning and eliminate human rights abuse from supply chains. And were the answers there?

No, far from it. Not even the case for paying the Living Wage or treating employees with respect.

The event’s theme was summed up by a poster: ‘Make More Money’. Almost without exception its stalls were populated by accountants, coaches and tax advisers, digital marketing specialists and professional networkers rubbing shoulders with angel investors and smiling celebrity TV gurus. Caught in a time warp, I was back in the profit-hungry 1980s with a digital edge. No workshop was called ‘How to exploit gullible people’ but one should have been.

One presenter’s ‘smarter ways to get investment’ wisely professed: ‘Don’t ask for more money than you need, don’t bullshit and get a woman on board’. The assumption that the entrepreneur must be male and the explanation for this advice – that flashing eyes and conniving ways could break down barriers to sales – were not what I wanted to hear.

I identified three oases of sanity amongst 300 stalls. Advance London was there, ‘placing London’s small and medium businesses at the forefront of the circular economy’, wisely focusing on the business opportunities presented by zero waste and maximum re-usability throughout the supply chain. Computer Aid offered the money-saving alternative of sending IT equipment to landfill by donating it to developing countries, rightly labelling this ‘social impact’. Meanwhile, the Government Office for Equalities was making the (substantial) case for greater empowerment of women in business.

In talks and workshops another Government agency updated people on immigration and employment law but otherwise the themes were predictable: you, too, can be a millionaire business hero! Talks included ‘From Bedroom to Boardroom’, ‘How to be a Social Media Superstar’ and ‘How to Effortlessly Manifest More Money’, titles picked at random from just one of a dozen ‘theatres’.

No doubt many small and would-be entrepreneurs are motivated by profit. Many, too, are motivated by purpose – bringing something good to the world through a sustainable business model – and these two goals are complementary. Ethical, responsible and sustainable business is a recipe for success even when measured in conventional terms – because innovation with purpose exploits niches, creates new and more efficient solutions and broadens market access.

The case for triple bottom line sustainability wasn’t on the exhibition floor, though it was important to the handful of visitors to whom I spoke. Perhaps their needs will be taken into account next year.

Perhaps.

‘The Business Show’ was at Olympia on 16-17th November. Tom Levitt’s new book is ‘The Company Citizen: Good for Business, Planet, Nation and Community’.

We need to invest in active citizens

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.

Britain’s ‘voluntary’ overtime crisis

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 24th 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.