Companies must take an inclusive approach with customers, suppliers, employees, investors and the community if they are to achieve sustainable success. Success will no longer be assessed simply in terms of the bottom line nor for a single stakeholder. These are some of the interim results of an RSA inquiry, published on February 10, which aims to stimulate business leaders into thinking about sustainable business.
Since January 1993, senior executives from 25 of Britain’s top companies have been defining the problems and challenges facing business and so trying to develop a shared vision of tomorrow’s company as part of Tomorrow’s Company: The Role of Business in a Changing World.
The Inquiry has posed four key questions:
How is the business horizon changing?
What is the role of business in society?
What is business success?
What new measures of business success do we need?
The interim report was debated at a major conference in Leeds on March 17 which was addressed by, among others, John Neill of Unipart, Christopher Haskins of Northern Foods and Simon Duffy of THORN EMI. The report, which is now subject of six months consultation, predicts that tomorrow’s company will understand and measure the value it derives from all its key relationships, well informed when confronted with the differing demands of customers, suppliers, investors and the communities in which it operates. Each company, it says, will have to set its own code of practice and range of success measures. The final report is due to be published in 1995. Contact Anna Gorely, RSA, on 071 839 1641
FUTURE BUSINESSMAN/WOMAN
A substantial change in approach towards the individual is needed if companies are to succeed into the next century, says a report published on March 10 by BBDO Business Communications. Based on interviews with 300 senior business people in 15 European countries, Future Businessman/Woman predicts that regaining employee loyalty, weakened by the recession, will be one of the key challenges facing businesses in the nineties. It suggests that hierarchical organisations will become less top-heavy and that a company’s “vision” will need to be incorporated into everything that it does. Contact Nick Chapman, BBDO Business Communications on 071 512 3030
TOTAL QUALITY AWARD
Michael Heseltine MP, President of the Board of Trade, launched a new national award to promote the business philosophy of total quality management. Under the UK Quality Award, announced on February 2, companies will be judged against nine weighted criteria, ‘enablers’ such as people management (9%) and ‘results’ such as people satisfaction (9%) and impact on society (6%). This last criteria covers community involvement and corporate citizenship issues. The initiative is funded by the DTI and donations from 70 corporate members of the new British Quality Foundation. Contact Kevin Shergold, British Quality Foundation on 071 873 8600
Comment
Anyone expecting a dramatic revolutionary report from the RSA inquiry will be disappointed. These interim findings will seem self-evident to most community affairs managers… of course companies have a range of stakeholders… of course the shareholder is not the only one. But that would underestimate its significance.
First, look at the participants – senior executives, grappling every day with the realities of running a business, realistic about what can really be done, yet still able to reach beyond traditional thinking on what business is all about. Second, look at the context – if the 1980s were about freeing mangers to earn value-added for shareholders, this inquiry marks a more broad-minded 1990s, in parallel with what Cadbury is achieving for corporate governance. So the final report may well not be very visionary, but it will certainly be rooted in what is practical and possible, for companies.
But there remain very real questions about the role of business in society. To cite just one example: if companies do invest in their staff, training and valuing them, to create high productivity, capital intensive businesses, where does that leave the many millions of people for whom the full employment, low skilled jobs are a thing of the past? Individual companies cannot solve that issue alone. It takes government and the whole community. So perhaps the biggest challenge of the ‘tomorrow’s company’ debate is not to business at all, but to government and the wider community.
Corporate Citizenship Briefing, issue no: 15 – April, 1994
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