The corporate world under pressure
Our corporate world is increasingly being associated with problems in the economy itself, in the social sphere and in environmental issues. The corporate world itself contributes considerably to this state of affairs – especially companies that operate under the narrow concept of value creation that has come into being over the past decades. This approach is limited to short-term profit maximization for the company – and in the process, important aspects of long-term success remain hidden: long-term customer satisfaction and loyalty, sustainable employee motivation and retention, the preservation of natural resources that are vital to these companies, the performance of suppliers, and the interests and needs of the locations where companies engage in production and sales.If the corporate world wants to regain trust and legitimacy and thus once again create an environment in which it can find long-lasting prosperity, the onus is on it to bring together business and society. The concept of creating shared value, embedded in a meaning- and performance-centered corporate culture opens up a way forward.
My goals, your goals, the company’s goals
Such a meaning- and performance-centered corporate culture starts with a contemporary theory of motivation instead of the concept of humanity presented by the standard theory of economics – that of maximization of self-interest – that still dominates today. For the past 160 years, economic thought and action have been determined by the dogma that the ultimate motive of human action is the direct pursuit of the greatest personal happiness or – in the business world – the pursuit of the greatest utility. According to this hypothesis, if people put this into practice they would be contributing toward the greatest happiness and the greatest utilityof the greatest number.
There is a sneaky problem: this motivation theory is wrong. Ironically, its founder, John Stuart Mill (1806 – 1873), had the good grace to withdraw this hypothesis himself. In his 1873 autobiography he wrote: “Ask yourself whether you are happy, and you cease to be so.” In other words, if you pursue happiness, it will elude you. The utilitarian motivation theory of mainstream economics that is still dominant today does not work – it is a dead end, both for people and for businesses.
What is becoming clear from meaning-centered and positive psychology and a growing number of findings in the field of neurobiology and medecine, is this: that which truly makes us humans what we are, and which therefore most fundamentally motivates us, is our seemingly unquenchable thirst for insight into the meaning of our actions, as well as our need to be appreciated as individuals, as the source of meaning for our existence. That is why we say: if you require people to perform, you have to offer them meaning and recognition in return.
People find meaning in their deeds and actions, when these are not a (self-serving) end in themselves. Meaning is found when people place themselves at the service of others – customers, employees, supervisors, their own children, their partners, etc. – or when they perform tasks that are important for a larger circle of people. In doing so, people feel that they are “good for somebody” or “good for something”, that they are recognized as individuals and have a rightful place in the world.
The more consistent companies are in placing themselves at the service of customers and society (i.e. when they are good for somebody or something, instead of pursuing merely selfish goals, such as short-term profit maximization), the more they expand their employees’ horizon of meaning – and the more they reinforce employee motivation in the process. These employees realize that, through their company, they are doing something positive for customers and society; that they are able to participate in shaping our shared world, both actively and with joint responsibility. The result is that human labor undergoes a fundamental rehumanization and revaluation, and there is a corresponding increase in the company’s performance: The employees’ and the company’s goals are finally one and the same.
Coevolution: economy and society in synergy
The second important aspect of a synergistic balance between the creation of economic and social value is linked to the concept of creating shared value. For companies, shaping their business activity in such a way that they also contribute to the welfare of society at large is not just good for employee motivation – it also makes sound economic sense. Cooperation with educational institutions or offering their own training programs results in skilled staff; an employment policy that regards layoffs only as a last resort and not merely as a means of short-term cost reduction preserves the expertise and loyalty of their employees, and often that of their customers; citizens who are remunerated fairly and have positive expectations for the future are good customers; suppliers who are doing well and have substantial expertise are reliable and deliver high quality products; a wise procurement and location policy reduces transport costs and protects the environment; production, packaging technologies and storage solutions that make efficient use of resources reduce costs and benefit the environment over the long term; a healthy environment is in the interests of customers, employees and their families, as well as being the source of essential, high-quality resources for many businesses. By adopting this approach, many companies find ways to set themselves apart in the market.
A third important aspect is that socially responsible companies enjoy a good reputation and the trust and loyalty of customers, employees, shareholders, media, the public, lenders, government and politicians – all resources that help companies achieve long-lasting prosperity (and that remain inaccessible to self-interested companies).
In the long run, the prosperity of the majority of companies cannot be separated from the wellbeing of society. The free market can and must redefine itself and prosper beyond the primacy of short-term self-interest – in a synergistic balance, creating economic and social value for the benefit of customers, employees, shareholders and society. By being there for each other in a spirit of coevolution i.e. of mutual development, all parties can experience growth. Let us proceed from the point where mankind became truly human: in cooperation and the sharing of our resources, based on meaning, and recognition.
About the author
Heinrich Anker(63) advises and assists private and public companies in the field of corporate culture analysis and development. He is lecturer in business ethics and strategic corporate social responsibility at the University of Applied Sciences in Bern in Switzerland.He studied economics, sociology, and history at the University of Bern, and later humanistic psychology. He has a summa cum laude doctor degree in economic sciences.www.wealthiertogether.com