By John Mulhall A positive and proactive professional on Twitter networking with like minded professionals in technology and business.
Sustainable Capitalism… Defining Business through a longer lens
In 2011, Sustainable Capitalism was coined as a term by Al Gore and David Blood in “A Manifesto for Sustainable Capitalism”. When we think of Sustainable Capitalism, it’s not hard to allow our minds to wander to a hippy like convention of eco friendly nature lovers that are anti-business purveyors of doom! In effect, nothing could be further from the truth. Al Gore and David Blood decided to quantify the growing movement of businesses whom for some time saw the damage that outdated classical management practices were doing to their businesses, their employees, the environment and society in general. These businesses were not content with the shortened company life cycle mentality where pure profit over sustainability ruled every major business decision. This insight impacted their management practices and the resulting business processes that defined the company as a whole. They wanted to move past the industrialist mentality. The intent was to within their own company walls consign the industrialist/classical model to history by replacing it with a longer term view that invested in a more comprehensive future even at the expense of a quick buck over the shorter term.
Wind power had a great day this week when, on Sunday, Scotland produced enough to power itself for an entire day! https://t.co/cXOigqdjlz
— Al Gore (@algore) August 12, 2016
David and Al describe the intent of Sustainable Capitalism by quoting Gen. Omar Bradley when he said “It is time to steer by the stars, and not by the lights of each passing ship.” The “manifesto” initially aired in 2011 was a capture of an attitude, which reflected on so many businesses whom had stepped above and beyond in their internal structures, strategy approaches and priorities for everyday business life. For example, I heard nearly a decade prior to the manifesto whilst at UPS that management had interest and concern in getting environmentally friendly cars that were fuel efficient and safe whilst saving on cost and delivering value to the community that UPS served. This approach was not isolated within the organisation. The UPS way not only cared for environment, it cared for employees through driver safety programmes and internal promotion policies to name but a few initiatives. The idea was to deliver a sustainable approach to business through its employees rather than on top of them. The result is one of the highest qualitative networks in freight and logistics, both then and now. The “UPS way” has evolved organically to demonstrate that not only has it a sustainable approach to business, it’s also the right thing to do making it as profitable as it is socially responsible. Attitude and approach ended up defining the company’s intent, strategy and daily implementation making UPS a good corporate citizen.
The concept of a socially inclusive and responsible business model is as revolutionary as it is contentious for those who believe in classical management practice along with hierarchical to market company cultures underpinning their businesses and industry(s). Such culture clashes have happened through the years but none were so dramatically pronounced as the events, which propelled Market Basket, a successful supermarket chain in the US into a national news story of the day! The battle of the billionaire cousins at this supermarket chain had begun. This family owned business saw these cousins locked in a titanic struggle for control of the business and its culture, which was build around the clan concepts of management-employee harmony, collaborative leadership, professional responsibility and social inclusion. The sustainable approach led by Market Basket CEO Arthur T. Demoulas was one where the company was driven by shrewd business practices minimising waste and contributing to society through a genuine family first shopping experience. Underpinned by consultative leadership practices and a clan company culture, this shrewd yet caring CEO managed to double the profit margin of the chain whilst engaging his extended employee family to success after success. The results attracted bigger business interest and a big buck payout for shareholders who would sell. This led to a boardroom revolt against Arthur T. who resisted the buyout approach. The revolt was led by his cousin Arthur S. Demoulas who did not share his CEO’s vision and wanted to cash in on his success. He got Arthur T. fired but never truly appreciated what his CEO had created, which explains why he never saw the reaction of the employee family of Arthur T. coming. Walkouts, mass resignations and a relentless protests by employees brought the Boston based chain to a financial crises, which was resolved when employee demands were met. Their single demand “Give us back our CEO” saw Arthur T. reinstated who in turn bought out his cousin Arthur S. With his extended employee family, Arthur T. restored his generational business called Market Basket to it’s former glory.
When you make a commitment, you build hope. When you keep it, you build trust.
— Arthur T. Demoulas (@ArthurTDemoulas) August 13, 2014
So, if Sustainable Capitalism is about social inclusion on a somewhat different platform to industrialist era Capitalism that we all know and in varying degrees accept, why should business owners of all sizes along with employees think about adopting Capitalism v2.0 for a sustainable future?
— Market Basket (@moreforURdollar) August 19, 2015
Business Longevity – Businesses built to last like UPS think of engaged employees as value creators, not cost centers. If one wishes to build a business that will last, then finding out about sustainable business practices is the first step. It should be followed by finding people who by character share such vision, which helps make recurring team efforts recurring team successes.
Company Culture – In companies where employee skills are number 1 (e.g. Software), sustainably successful companies build a consistent set of leadership practices that formally and informally engage employees at line level in bigger picture strategy and direction decisions. This over time makes clan and adhocracy cultures very productive environments for thinking employees where disruption from vertical “silo” structures and office politics are minimised. This at a minimum allows employee focus on greater good issues enriching employee satisfaction and deepening brand loyalty to good leaders.
Long Game – Companies can too often post policy statements that are top down declarations of love for society, employee and the customer but never actually mean it. Changing inaction to coherent action will enable a people factor, where the lines of customer, manager, employee and wider society are brought closer together through social, charitable, industry specific and societal programmes by a company that takes the values behind their selection of these programmes and incorporates them into their own management decisions, business processes and leadership practices. This over time augments company culture to a more sustainable footing repositioning a company and its capabilities in the market place.
There is no doubt that the prevalence of the industrialist mentality in business will persist into the future! That said, when a movement of like minded business owners and employees who believe in a sustainable future for capitalism find their place with each other, the resulting block will form a powerful counterweight in the business world of tomorrow! It will balance a better world that everybody can find a place to work in, which for the sustainable capitalist will be also be a place of belief, a place where they feel like they belong!
About the author: John Mulhall has over 12 years in business leadership and management experience covering five different industry sectors around the globe. He is also a community manager, blogger and currently a transitioning student to software. To read more from John on sustainable capitalism related articles, see here
Business Insider on Arthur T. Demoulas
Al Gore and David Blood on the Sustainable Capitalism Manifesto