Can Big Business Be the Solution, or Is It Just the Problem?

Apr 21 2014, 4:28pm CDT | by

This article is by Saj-Nicole Joni, chief executive of Cambridge International Group. The Right Fight, by Saj-Nicole Joni and Damon Beyer, is available in book, ebook and audio formats.

Whether it’s oil spills, sweatshop horrors, tax evasion, engineered financial bubbles, or outright fraud, corporate malfeasance has recently taken a huge toll on the standing of business in society.

At the same time, large companies make it possible for the normal activities of everyday life to occur with ease and reliability—sending an email, feeding our families, charging our mobile phones, traveling, taking medication, paying a bill, having a shower, watching a movie, enjoying a beer.

Can we really believe businesses will use their global capabilities to fix the world—or are the stories of corporate contributions to society just window dressing and feel-good P.R.? I recently met to discuss this with Jon Miller and Lucy Parker, the coauthors of Everybody’s Business: The Unlikely Story of How Big Business Can Fix the World.

Saj-nicole: Big corporations are intense concentrations of the resources, skills, and expertise that the world needs to solve our most pressing challenges. But many believe that big businesses are actually the root of many of these challenges, not the way out of them. What makes you believe otherwise?

Lucy: Big businesses have been at the root of many problems. The list of crimes and misdemeanors is there for all to see. The trouble is, that’s the only story most people ever hear about big business.

Jon: But when you think about it, there isn’t a single big problem in the world today that big business can’t help find solutions to, hether that’s global water security, fighting poverty, energy efficiency, the future of health care, or women’s empowerment. These are all issues that businesses are tackling today.

Saj-nicole: To many, that all sounds like good corporate propaganda. Is it really more than that?

Lucy: Let’s take the problem of water scarcity. Forecasts show worldwide demand for water outstripping expected supply by 40% within 20 years. In our book we highlight a number of companies tackling this, including PepsiCo, SABMiller, and Unilever. They start making their operations more water efficient. Then they move outside the business to wider society.

Jon: PepsiCo needs lots of water to make its product, and Pepsi operates in many water-stressed parts of the world. When Indra Nooyi took the helm as CEO in 2006, she quickly got it. She remembered her childhood in India, where the family had had to fill buckets of water every morning. Today her strategy seeks to ensure that PepsiCo’s long-term profitable growth is intrinsically linked with social and environmental objectives.

Lucy: Nooyi made a commitment that PepsiCo would reduce water use in its operations across the globe. Once committed, the company innovated a series of breakthroughs that accomplished these water reduction targets several years ahead of schedule. And PepsiCo understood that it had to do more. It also had to help local communities. So, for example, in the area surrounding its bottling plant in Aurangabad, India, PepsiCo worked with community and municipal officials to build dams, dig wells, and create water-harvesting initiatives, all of which added up to a billion liters of clean, usable water, recharged into the local water supply.

Jon: A symbolic testament to the magnitude of PepsiCo’s achievements occurred in 2012: Sseven years after the Stockholm Water Prize (considered the Nobel Prize for water security) went to an Indian activist who had campaigned against Pepsi’s practices, that same prize was awarded to Pepsi. The business has become a credible source of innovation and expertise on the massively challenging societal issue of water scarcity.

Saj-nicole: Why does a business do that? What’s the motivation?

Jon: First, they must have license from society to operate, and they know they don’t operate in a vacuum. And second, they create important opportunities for long-term growth when they invest in local needs. And it’s not just PepsiCo. There are businesses working on cheap water purification technology and solar-powered desalination plants. Even the banks are getting involved. HSBC has launched a $100 million program with World Wildlife Fund  and other partners to tackle water risk, and Standard Chartered has committed $1 billion of financial services to water-related projects.

Saj-nicole: As I work with leaders across the globe, it is clear to me that the conventional view of big businesses as impenetrable fortresses run by command and control is obsolete. Because of the exponential leap in inclusive connection, there’s no longer a bright line between what’s inside a company and what’s outside it. Does this imply that businesses must become part of the solutions to society’s biggest challenges, instead of being part of the problems?

Jon: Yes. Increased connection means that companies are more deeply embedded in the environments in which they operate than ever before. They are like clouds of connections—to suppliers, networks, customers, and governments spread all over the world. Given these networks of networks, businesses can no longer be unitary entities. The surface area connecting them to society at large is much broader, the webs of interaction and sharing are much more intimate.

Lucy: This presents huge opportunities. Big businesses are uniquely positioned because of their webs of complex global connections. Their headquarters are already connected with small-holder farmers in Africa, software wizards in India, and design teams that span multiple continents. As a corporate leader, your access to these webs of connection makes it possible for you to have big impact./>/>

Saj-nicole: As a corporate leader, what questions should I be asking? Where do I get started?

Jon: First, “What are the issues where my business is inherently, integrally, part of a big challenge that needs solving?” Identify the issues where you can have the greatest impact because of what your business does.

Lucy: Second, forget the business needs, and ask, “What do I personally think about the particular issue?” Once you’ve answered that question, look back into the business and ask, “How can we really help?”

Jon: Third, “Do I really want to do this?” Because it will be hard. It’s long-term. You will have to be imaginative. You will have to do a lot of detailed work.

Saj-nicole: Fundamentally, this is about redefining long-held assumptions and working to turn entire industries upside-down. That requires staying power and tough-mindedness. And it takes every part of you—head, heart, and guts. What makes people want to do it?

Jon: That’s actually what the best business people are really good at. They love tackling tough problems. When people inside a business start to understand the positive impact they can have, the work becomes contagious, inspiring, and, ultimately, unstoppable.

Lucy: Start now. Ask yourself those three questions. And then, act. When we all do this together, it’s amazing what we can accomplish.

 
 

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