The human side of corporate reform

April 13, 2017

Part of the enduring disconnect between business and society lies in narrow assumptions about what motivates people. A key to companies realising the business benefits of a well-defined corporate purpose is to activate motivation beyond money and status, argues Charles Wookey from Blueprint for Better Business.

Last month we arranged a viewing of The Divide, a feature length documentary about inequality. In the panel discussion that followed many of the questions were to Rochelle Monte, a careworker from Newcastle who appears in the film.  Although she struggled to make ends meet on the living wage,  a key issue for her was time.  She resented relentless efficiency demands to fit in more domicillary care visits which had squeezed out any real human interaction. And yet as the film showed,  for the housebound elderly people she visited it was precisely her human presence and warmth they valued most, and what for Rochelle had previously made such a low paid job nonetheless rewarding.

The ‘divided life’ into which Rochelle was being pushed by public funding cutbacks, leaving much of her humanity unexpressed, is a striking aspect of what still disconnects many businesses and society.  A recent survey reported that only 23% of those working for global corporations were fully engaged with their work.  Many people still feel that they have to leave part of themselves at the door on the way into the office, and this year’s Banking Standards Board report highlights that 1 in 8 people in the financial sector still feel that “flexing ethical standards”  is needed to progress.

We are currently seeing a good deal of soul searching about how to repair the relationship between business and society. With the active engagement of the current government understandably much of the political focus is on how best to deal with egregious examples of bad practice, and neuralgic issues such as executive pay.  The search for policy solutions is a natural response, and there are a number of sensible and important regulatory changes which can help.

Yet the “divided life” points to a deeper aspect to the current malaise which lies beyond policy, though law and regulation send signals which help shape it.  It is the dominant cultural mindset of what business is for, and what view business takes of what motivates people.  The idea that the purpose of business is to maximise shareholder value, and that people are best assumed to be self-interested and motivated by money and status are still hugely powerful social constructs.  But that is all they are.

Another person featured in The Divide is Sir Alan Budd, famous for being Mrs Thatcher’s chief economic adviser.  He too attended the recent showing and was quizzed about his experience and the growth in inequality since the 1980s.  Looking back he could see how things had not worked out, and he was passionate about the need today for people to question and escape the dominant mindset. He said “economics is not like physics, in that its laws can be changed. What economists have so far failed to do, is to question the assumptions which underlie the system”.

Part of the mindset shift which we and others see an urgent need for is in a different understanding of business purpose, where profit is the condition and outcome, but not the purpose. As John Kay put it at our 2015 conference “profit is like breathing, without it you die but it’s not why you get up in the morning”.  The purpose is the joint worthwhile endeavour which brings people together, and which they feel moved to want to be part of and contribute to.

But living out such a purpose depends on activating motivation beyond self-interest.  This is what can help heal the divided life.  It is true that we will tend to behave in a purely self-interested way in situations of fear and control. But the evidence from positive psychology, behavioural economics, neuroscience, and the wisdom traditions of faith and philosophy is that we are, as people, hard-wired to be in relationships with others and to seek meaning.  In his excellent book Payoff,  the psychologist Dan Ariely writes:

“instead of relying only on money as an incentive, we need to expand our scope and examine other motivational forces – ones that provide a greater sense of meaning and connection to work. As people feel connected, challenged and engaged; as they feel more trusted and autonomous; and as they get more recognition for their efforts, the total amount of motivation, joy, and output for everyone grows much larger”.

The business case for making this shift is powerful. Yet the transformation is not easy to achieve. It demands a sustained change in mindset and behaviour, rooted in a purpose that serves society.  It requires a consciousness of the ways a business can enable  – or disable –  intrinsic motivation through its processes and structures.   It is at the core of what is needed, beyond any regulatory change, if we are to help heal the real divide between business and society and at the same time build more productive and successful businesses.

 

Charles Wookey is the CEO of A Blueprint for Better Business. Blueprint, a registered charity,  is a catalyst for change in business. We help businesses realise their true long-term potential: to serve society, respect people, rediscover their purpose, and thereby earn a fair and sustainable return for investors

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