Behavior Change
Democratic Approach to Business Governance Key to Long-Term Innovation

The Foundation for Enterprise Development (FED) has published a paper that explores the roots of representative structures and argues that a democratic approach to business governance is crucial to long term innovation.

Sustained Innovation through Shared Capitalism and Democratic Governance evaluates the role of research, innovation, organizational structures and associated issues in addressing the long-term focus required for development—both material and human.

With technology rapidly evolving and offering new ways to innovate, collaborate and solve global challenges, the writers answer key questions such as:

· How do innovative organizations evolve and maintain focus for 100 years or more?

· What models support long-term technology development without significant state ownership?

· What resources and financial structures sustain “new worlds?”

· Is it the case that entities with meaningful staff ownership are most desirable?

Highlighting the inventions of computer hardware, software and internet-related innovations for their global impact because of the organizations' democratic process, the authors emphasize that long term development will suffer if not aligned with a democratic approach within business organizations.

The authors write: "Is there such a thing as a single optimal organizational design for long-term innovation? Not likely, but what can be said is that top-down management, exclusiveness, narrowness of mission and short-term profiteering mechanisms would severely limit the potential for a long-distance space program to succeed in a dynamic, global environment."

While the core of the Starship entity itself remains unclear – and may likely emerge as a hybrid containing a non-profit entity that “owns” a number of “for profit” entities – the authors cite several key organizational elements necessary for any business looking to participate in global development:

· Entrepreneurial systems that are highly participative, transparent, ethical and accountable.

· Value-based solutions that address profit and shareholder value and go beyond these to include sustainability values so that we do not compromise future generations.

· Investments in inter-disciplinary education, research and technology that build future knowledge and capability for the 100 Year Starship, while seeking applications to improve life on Earth.

· Responsible capital deployment and returns that map to the range of investment benefits/risks.

The paper was published in the Journal of the British Interplanetary Society and co-authored by the FED and its collaborators – CSRwire CEO Joe Sibilia; Joseph Blasi, Professor, School of Management and Labor Relations, Rutgers University; and Thomas Zurbuchen, Associate Dean for Entrepreneurial Programs at University of Michigan.

In related news, a recent white paper by global consulting, design, construction and operations firm CH2M HILL, claims companies that set tangible sustainability goals do a better job of improving both their financial and environmental performance. Sustainability Goals That Make an Impact focuses on the link between sustainability goal-setting, environmental and financial performance, and stakeholder recognition, making the case for setting more tangible goals.