The following is an excerpt from The Activist Leader: New Mindset for Doing Business by Jon Miller and Lucy Parker (HarperCollins, 2023). Reprinted courtesy of Harper Collins Inc.
Business is an inextricable part of today’s major global systems: Food or
health, energy or transport — it’s hard to imagine these systems without
companies of all shapes and sizes playing an intrinsic role. And when it comes
to playing a positive role in society, this is the front edge of delivering
social value: being part of the drive for systemwide change.
Of course, the priority for any company is to improve its business performance:
to do what it does ever better — whether that’s in financial metrics,
operational KPIs or brand preference — and every part of the operation is
already busy delivering on that. So, why would you choose to step beyond the
business to look at systems transformation? There are two compelling reasons.
The first reason is straightforward: This has become a natural extension of
achieving your own operational goals relating to social performance. Most
companies now have targets, for example, on sustainable wood supplies, water
efficiency or driving forced labour out of the supply chain. It is hard —
impossible, even — to make progress on these targets unless you engage beyond
the business. No one company can solve these goals in isolation: Making
operational changes in your business often requires a corresponding adaptation
in the system.
The second reason is about impact on the issue itself. Even though progress
towards the sustainability of the business is important — and hard to deliver —
hitting your own targets on these challenges, improving your own performance, is
unlikely to fix the issue in the world. No one business, even the biggest, can
make a material difference on its own.
For people running a business, we’ve found, looking at it this way can be
something of a shock. To keep pushing their businesses to perform, they are
heads down, eyes locked on the track in front of them. And realising the need —
and scope — they have to act across the system suddenly brings a new dimension
to their leadership. They start to consider the potential they have to shift the
ecosystem, establish new norms, generate new solutions. Sensing that opportunity
for the first time opens up their horizon.
In this context, shifting the system doesn’t mean the economic system, at large
— which is important to note, because the very idea of engaging to change the
system sometimes elicits an initial response that the business cannot hope to
change how the capital markets operate. It means working across the ecosystem of
organisations that enables your business to operate successfully, in order to
tackle a complex issue of shared concern. The most immediate connection with the
ecosystem is through the value chain — and this is where companies first started
on this journey.
Help drive system innovation
Achieving meaningful systemwide change will inevitably step you beyond the
immediate relationships in your value chain and out into the broader ecosystem
around that issue. It’s about collaborating on shared challenges, making links,
filling gaps and seeking dependencies to unlock progress on some of the
thorniest challenges.
Shifting the system doesn’t mean the economic system, at large — which is
important to note because the very idea of engaging to change the system
sometimes elicits an initial response that the business cannot hope to change
how the capital markets operate. It means working across the ecosystem of
organisations that enables your business to operate successfully, in order to
tackle a big complex issue of shared concern. The most immediate connection with
the ecosystem is through the value chain — and this is where companies first
started on this journey. The following three examples show what a radical shift
in perspective this entails.
Nike: Taking responsibility for the system
Nike’s engagement with societal issues stretches back to the sweatshop
scandal of the
1990s.
Their rapid growth had been driven by a vigorous, global outsourcing strategy to
access cheaper labour; and they became the poster child of globalization. Nike’s
founder and then CEO Phil Knight had a famous nostra culpa moment at the
National Press Club in Washington DC in 1998, when he
declared:
“The Nike product has become synonymous with slave labour, forced overtime and
arbitrary abuse.” Nike then established its Corporate Responsibility department
and produced the first-ever Corporate Responsibility Report — and at that time,
for them, the word “responsibility” carried a new vibrancy and sense of
commitment. They were paving the way for what has become a different model of
the social contract between companies and the ecosystem that surrounds them. And
today, Nike is among the world’s leading activists in the corporate
arena.
Walmart: Mobilizing the supply chain on climate action
Walmart, the second-largest retailer on the planet with a market cap of
$400 billion, has established a track record in this arena over the past 15
years: Insisting on supplier certification for more sustainable fishing
practices, driving plastic waste out of the system and backing female
entrepreneurship are all issues on which they are delivering measurable impact
at scale. As the urgency of global environmental crises becomes more evident,
Walmart has become more assertive. With Project
Gigaton,
announced in 2017, their stated goal is to avoid one gigaton — 1 billion metric
tons — of greenhouse gas emissions from the global value chain by 2030; and they
are working through their supplier network to make that happen.
Brambles: Collaborating with customers to drive out waste
Operating out of Australia, Brambles began in the nineteenth century
with a horse and cart and has grown to become the backbone of global supply
chains. This gives them a unique vantage point from which to look across the
world’s logistics system. By asking their customers about their most pressing
supply chain issues, the company identified three ‘breakthrough challenges’:
eliminate waste, eradicate empty transport miles, and stamp out inefficiency.
They decided to make their customers their partners in finding practical
solutions
to those challenges, setting up a series of ‘working collaborations’ right
across the logistics ecosystem — backed by the company’s data analytics and
expertise. While Brambles can’t boast the scale or purchasing power of the consumer-facing
giants like Walmart, they’ve identified where they fit in the system and what’s
distinctive about the impact they can have.
It’s hard to exaggerate what a radical shift in business thinking this is: not
only tackling the issue through the core of the business, but also aiming to be
part of system transformation — because achieving the company’s own ambitions
and targets requires it, and because making an impact on the issue itself
demands it. This is a defining aspect of social leadership for these times:
showing up with a commitment to drive change systemwide, beyond the performance
of your own business. Leaders with an activist mindset are looking for new ways
of working with and through others to mobilise change.
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Jon Miller is a partner of the Brunswick Group, where he co-founded the Business & Society team in 2011. In 2015 he founded Open For Business, a coalition of global companies advancing LGBTQ+ equality. He is also founder and Chair at Open For Business, and co-author of "The Activist Leader: New Mindset for Doing Business" (HarperCollins, 2023).
Lucy Parker is a strategic advisor at the Brunswick Group. She has more than twenty years’ experience across a range of sectors — from pharmaceuticals to engineering, retail and telecoms. She is co-author of "The Activist Leader: New Mindset for Doing Business" (HarperCollins, 2023).
Published Oct 2, 2023 8am EDT / 5am PDT / 1pm BST / 2pm CEST