In the past few weeks we talked about what purpose is, how it’s affected the economy, and why it’s so important from a psychological perspective. We ended the last post by beginning to understand the differences between Humans and Econs [Humans being real people in the real world, and Econs being our theoretical version that economics is based upon] and the unfortunate truth that most companies are, unlike us, Econs.
Which brings us to thinking about companies as humans. What would it mean for companies to act more like humans, to be irrational, to value fairness and equality, be driven by a purpose beyond profit, to adapt and change its beliefs as it grows?
Studies (and there are many) demonstrate there is actually an economic consequence for companies that don’t behave fairly. Firms actually loose customers and revenue when a more ‘fair’ competitor exists, which adds more evidence to our theory that companies that are purpose driven outperform their peers.
This is all evidence that companies that act more like Humans are better off in the long term.
With the exception of a few large corporations that just get it, the companies that are able to act most humanely, are small businesses. They feel more human because the people working in them feel more connected, because they can access all employees and managers at all levels, due to their size (and often close, personal and family ties). Big corporations can get away with doing evil, not human, things because people feel disconnected between the actions they’re doing and the actions the company is doing. They’re so big you loose touch with reality.
Technology is actually doing the same thing to people that size does to large organizations. It distances us from each other, makes it easier to do things we couldn’t do, wouldn’t do if we were standing in front of someone. This is why cyber bullying has gotten so out of hand. It is very difficult to look someone in the eye, tell them they’re fat, and laugh in their face. But it is relatively easy to laugh at a funny of video of someone overweight online. It’s not even that hard (for many people) to post a mean comment under that video directed at a real person. Technology creates distance between humans and the more distance between us, the less we remember our shared humanity.
So we take the good with the bad.
We learn, we adapt, we grow. We evolve.
We know that technology creates distance between us, so we consciously think about our actions and learn to act more like humans even when we’re interacting with technology. We remind ourselves that it’s not a ‘company’ deforesting the rainforest, it’s people, making decisions, within a company to deforest the rainforest. We consciously close the distance between the things we don’t want to think about and the reality of our actions.
And when I say ‘we’ in that last example, I mean we as managers of companies. We as consumers. We as investors. If you are reading this, you most likely fit all of those boxes. We are part of the problem, but luckily we are also the solution.
The solution is to put the humanity back in business. PEOPLE RUN COMPANIES. Companies don’t do bad things. People do. Companies just make it easier to disguise, to avoid the truth.
I also believe that if we continue to treat companies like person’s (as we currently do), then we have to give companies souls. By that I mean we need to inspire management to discover the existing values that drive the organization towards its purpose, to create a family, an integrated group of people focused on solving the same thing, pursuing the same value for whoever they’re creating it for. Their tribe, themselves, or others in society.
By giving a company a personality, with both strengths and weaknesses, great leaders can help cultivate a culture to help pursue it’s purpose.
The most evolved companies, those able to sustain and endure in a complex world will be those that are most human like. We are the most evolved species, we have the potential to create something even greater, but first we must help the organizations that dominate our world (companies) the tools to act more human, to ensure they remain a complementary asset to society, not something that destroys society.
In order to understand where we’re going, I often find it’s sometimes helpful to take a look back and see where we’ve come from…
A framework // TOWARDS CORPORATE HUMANITIES
I’ve worked as a Corporate Social Responsibility consultant for a while and in that time I’ve seen numerous charts, graphs, and frameworks for defining how it is that corporations are becoming more ethical. My favorite was from PwC who focused on the maturity of sustainability in corporations. I’ve adapted that and created my own to fit my clients’ needs. I call it Towards Corporate Humanities:
Next up came corporate responsibility (also known as corporate citizenship, corporate social responsibility, or corporate sustainability). The first effort towards doing good that had little to no strategic alignment between the operations of the company and the good they were doing. This eventually became a sort of ‘should do’ standard for all companies and you’d be hard pressed today to find a major corporation that doesn’t at the very least have a philanthropic foundation, at least some volunteer programs and a sustainability team.
What would make more sense is to have a single, distributed ‘humanities’ team. Representatives of this team could be found working with your supply chain (including procurement), customers, employees, investors, all stakeholders. All people involved in the ecosystem of the company. That’s true leadership.
I wasn’t the only management consultant that had issues with how corporations were managing their responsible initiatives. Michael Porter is a Harvard LEGEND and best known for his framework and theories on corporate strategy, in particular Porter’s Five Forces. But he wasn’t convinced his efforts were being put to their best use, so he teamed up with colleague Mark Kramer and together they founded FSG, the undisputed leader in social change consulting (the purpose driven McKinsey if you will).
Creating shared value is a great concept and one I encourage all my clients to follow. But the problem is that finding opportunities to create shared value can be very limiting. The reality is that trade offs do exist, and more often than not a company is going to choose profit over impact. The overlap of shared value opportunities is small.
- Close the distance between people. Create internal engagement channels that allow your front line employees to provide feedback to those creating products and services on the back-end. Middle management shouldn’t stifle the flow of ideas, it should facilitate and lubricate a smoother pace. I’d recommend checking out what NOBL Collective is doing in the world of organizational behavior and team management.
- Lead with purpose, be guided by your values. If you’re current purpose and values look exactly like all your competitors, then you might as well just throw them away. These are things that are traditionally developed with a top down approach which is all wrong. Think of purpose and values as the inherent personality of the company, a relic from the founders’ legacy. Rediscover what is already there, listen to the people in your organization, distill their existing ideas, and leverage what’s real, what’s authentic to craft a better map and compass that you all can agree on.
- Be authentic. This one is easier said than done, but it makes a huge difference. Admitting your faults and weaknesses goes against traditional sales 101, but let’s face it, it’s 2015 not 1880. It’s probably time to break the rules. Build a brand, a company, a culture where its ok to be honest, ok to admit defeat, ok to ask for help, ok to be human. Laugh at your mistakes, then learn from them and move on. You can not fake authenticity, and if you really want to engage your people, you need to meet them at eye level. Get off your high horse and start being real, the dividends will be a sweet reward.
It’s important to note that my framework isn’t toped by a nice pinnacle, because I’m certain my thoughts won’t be the end all. As I’ve argued, we will continue to grow, to learn, to evolve our thinking. New knowledge, new technology, new ways of thinking will help us come up with better ideas on how to thrive. But as far as I’m concerned, Corporate Humanities is on the top of the list, for now.
The truth is, that the science shows that people do care. We do genuinely want our species to not only survive, but to thrive, to flourish.
And we are in a perpetual journey to learning, growing, consuming information. As we evolve and develop we gain more leisure time to think, to learn, to understand. And we should embrace that, celebrate our progress!
So in the end, companies will need to prove they can be human to survive.