So Elon Musk, after falling out with President Trump wants to start a new political party.
How far should leaders of business be involved in influencing government? Does a healthy democracy need a strong business voice? Or is this undue interference by the powerful?
A new political party is rarely the answer. As commentator James Crabtree put it
‘The US landscape is littered with start-up parties and third candidates that did not work.’
Of course there is a need for the formal representation of business concerns to government, and in the UK the CBI and the Chambers of Commerce do this well.
Yet there is another sort of business voice that democracy needs to hear. And I worry that this voice is now heard less often.
I’m talking about the voice of enlightened business. This voice transcends the here-and-now. It speaks to government, and educates citizens, about the longer term health of the economy, about the real nature of wealth and the essence of wealth creation, about the potential for business to be a force for good and about how government can enable this to happen.
Here are two examples, one international and one national, of the impact of the enlightened voice of business.
Example 1 – an enlightened business voice at a time of international trade tensions.
In the 1980s, as today, there were acrimonious arguments about unfair trade practices. Plus a growing awareness of the disruptive power of new technology. Japan’s postwar success was near its peak. Manufacturing jobs in Europe and the USA were being lost. Angry words were being spoken. In 1985 Frits Philips, a former President of the consumer electronics company of that name, wrote to some Japanese counterparts.
“As a friend of Japan, I really wanted to tell you that this is how Japan is seen. Japanese people need to know what the image of Japan from outside looks like. Image is sometimes more important than facts. In fact, many of the wars of the past were outbroken by images, not by facts.” He attached an English translation of a Dutch newspaper titled “Deceptive Smile of Japan”.
His chosen channel of communication was an international peace-seeking organisation, now known as Initiatives of Change, which has a long tradition of convening dialogues at its Alpine base in Caux, Switzerland.[i] This led to a meeting between European, US and Japanese business leaders at Caux in 1986. I was at Caux last week, and the first speaker I introduced in our inter-generational dialogue was Japanese business leader Hironori Yano-San. He had been in the room in 1986 and recalled how confrontation gave way to listening.
‘The spirit of historic reconciliation in Caux, seeking common ground to consider the other side’s position, seemed at work, and the momentum gradually developed to consider the future of the global economy. The participants agreed on the direction of not telling the other side what to do, but first correcting its own shortcomings. ‘
Practical results have followed. The Caux Round Table (CRT) was formed. Eight years later CRT published the Caux Principles for Business. This became the model for the Charter of Corporate Behaviour used by the Keidanren (the Japanese equivalent of the CBI) and was the forerunner of the Ten Principles of the UN Global Compact. At Caux we learned from CRT Japan Executive Director Hiroshi Ishida about the extensive human rights supply chain monitoring which he leads for member companies across SE Asia.
Is there a lesson here for the leaders of business today, at a time of mounting trade tariffs, and other international tensions? Where is the enlightened voice that might start such a dialogue and explore new solutions ?
Example 2 – Tomorrow’s Company – the role of business in a changing world.
At exactly the same time as CRT was finalising its business principles, a new dialogue was beginning in the UK. It would have significant consequences for understanding the kind of companies its government should be encouraging. Again the convenor was a respected institution that understood the importance of dialogue and inquiry. This time it was the RSA – the Royal Society for the encouragement of arts, manufactures and commerce. As Programme Director there I was helped to initiate the dialogue with a lecture by its chairman, the late Charles Handy.
The Tomorrow’s Company Inquiry Team of business leaders launched its shared vision of the company of the future in 1995. The Inquiry Team put purpose, values and relationships at the heart of their inclusive approach to sustainable business. The Blair government was elected a year later and soon launched its Company Law Review (CLR). Within a decade the duties of directors were changed to reflect what the authors of the CLR described as an inclusive definition of directors duties. While remaining accountable to shareholders, directors owed their duty to the company and were clearly told that they could not fulfil that duty without having regard to the interests of the long term, stakeholders and environmental considerations.
Three decades later, we once more have a new government, determined to improve the UK’s dismal growth record. It has recently published its Modern Industrial Strategy. Read the executive summary. Look for Purpose, values, relationships – everything that goes to make up the culture of a company and influence the intrinsic motivation and creativity of its people. None are mentioned. What is so surprising is that the government does not – at least in its public utterances – appear to have understood the basic connection which that 1995 report made between well-led, purpose-driven companies with the resulting impacts on employee commitment, productivity and therefore improved growth. It is like publishing an agricultural strategy without having policies to improve the quality of the soil.
Innovation and agility are crucial drivers of productivity. Any business leader will tell you that you that the best companies inspire exceptional degrees of loyalty commitment and inventiveness through their culture. They then select and infect suppliers and business partners with the same attributes. Research suggests that trust, psychological safety, and a sense of belonging, are all key components of this.
We need to spread this understanding through our government, through its industrial strategy, through its public procurement, and through the way we teach the next generation. Technology is always changing. Leadership, values, relationships, culture and quality are constants in the quest for business success. It is time our government heard. Where are the enlightened business voices that will make this case?
Mark Goyder is Founder of Tomorrow’s Company and Senior Advisor to the Board intelligence Think Tank.
[i] Formerly known as Moral Re-armament (MRA)