For Businesses

Research shows that they not only benefit people, but businesses too. One of the core values we espouse at Leaderonomics is ‘Giving’ – not only does it help to create an authentic sense of belonging within our social enterprise, but it also drives lots of creative ideas and deepens engagement. I have written previously about leadership giving. Traditionally, the idea of focusing on what might have been described as “soft” values has been viewed as something of a luxury – one that leaders might indulge in once they take care of the ‘real’ hardcore business of performance, results and the bottom line. However, in recent years, research has shown that treating people like early industrial factory workers (i.e. automatons paid to do a job) has a detrimental effect on performance. People feel disengaged and demoralised by leaders who neglect their employees’ well-being – the best they can expect to receive is the bare minimum offered through compliance. What’s in it for givers and receivers? A study conducted by researchers at University of California headed by Joseph Chancellor found that, where acts of kindness regularly took place in the workplace, the organisation benefited overall as both receivers and those performing the acts of kindness felt a greater sense of happiness and job satisfaction. Workers from a range of departments at Coca Cola’s Madrid site were told that they were taking part in a happiness study. Once a week for four weeks, they were to report how they were feeling in terms of mood and life satisfaction, and their experience of positive and negative behaviours. After the four weeks, the participants reported further measures including happiness as job satisfaction. What the workers didn’t know was that 19 members of the group were tasked by the researchers to be “givers”, and to carry out random acts of kindness (which they were free to choose) for a month. Examples of these small acts were bringing someone a drink or sending a colleague a pleasant, uplifting thank-you message. After the month, the receivers of the random acts reported 10 times more prosocial behaviours in the office compared to workers who received no particular acts of kindness. As a result, they also reported higher levels of happiness. The givers also benefited from the study, more so than the receivers, reporting higher levels of life satisfaction and job satisfaction, and fewer depressive symptoms. It turns out the old adage is true – it is better to give than to receive – which is something most of us would have experienced for ourselves in buying gifts for other people. It’s great to make others feel good, and the research shows that giving brings benefits all-round. Cultivating a culture of giving Another positive finding by the study was that those who received acts of kindness were keen to pay them forward, engaging in three times more prosocial behaviours than did workers who received no special attention. Remarkably, the acts of kindness were not a result of obligation – receivers paid their kindness forward to people other than the original givers, which suggests that employees in general are eager to participate in a culture of giving within an organisation that encourages generosity. Giving, then, turns out to be much more than a “soft” value – it offers real, tangible benefits to both givers and receivers, and enhances the culture of an organisation as a result. While this might seem as an obvious state of play, the study really acts as a reminder to leaders (and to each of us individually) of the importance of giving, and that we should make more of an effort to help each other in any way that we can, however small the act of kindness. There are many ways to give. I have written previously that even connecting people is giving. The key to fostering a culture of giving is to ensure that it’s cultivated naturally, rather than a culture that’s enforced. When we give out of a sense of obligation, we’re not really giving at all, but rather returning the favour, which feels more like a debt repaid on both sides. It starts from the top As always, leaders can take the initiative and set the example of the kind of culture they want to see within their organisation. By engaging regularly in behaviours such as praise and recognition, lending a helping hand, and encouraging others to let them know how things are going, leaders can set the tone for an environment that’s geared towards lifting people up through acts of kindness. The vital ingredient here is consistency in practising the behaviours we’d like to see shaping our organisation for the better. Giving freely to others is a great way to foster unity and boost morale and engagement. It’s also a fantastic way to help organisations grow and to be a thriving example of the difference they endeavour to make to their people, customers, shareholders, and the communities. Ultimately, leaders should view the quality of giving as the ‘real’ business that, in the end, is what truly helps to drive performance, results and the bottom line.

Recently, I was challenged to change the way I view charity. Dan Pallotta’s TED2013 video on “The way we think about charity is dead wrong” can take credit for this. “Three hundred and fifty employees lost their jobs because they were labelled as overheads; this is what happens when we confuse morality with frugality,” says Pallotta who founded the AIDS Rides. AIDS Rides is a series of long-distance fundraising cycling journeys for HIV/AIDS research and breast cancer three-day walks which netted millions but later shattered after a spate of bad press criticising the management of the organisation. The real issue lies within the fact that everything we have been taught to think about charity should be rethought. In particular, the single yardstick generally used to measure the worthiness of a charity – how much money goes directly towards the people it seeks to help and how much is used to cover overheads– is dangerously limiting. Ergo, the ‘best’ charities are those with the lowest overheads. However, the reality is that social impact can never be quantified through a simple input-output calculation. Our own perspective on giving and the non-profit sector are worryingly undermining the causes we love, when this focus may actually impede charities from making a real impact. The Misconception Typically, the world applauds companies that give generously to philanthropic initiatives and we idolise the social entrepreneurs who set out to address our world’s most pressing issues. Yet people raise their eyebrows at the mention of a corporate behemoth that seeks profit while doing good. These efforts immediately become bright red flags for scepticism: Can a consumer goods MNC really teach us how to reduce waste? How can a company that has historically sourced cocoa at the hands of child labour transform into a leader in developing rural farming communities? Does anybody really trust the fast food chain’s “healthy options menu”? The debate about business and social responsibility is really a false dichotomy. It assumes an either/or position that doesn’t exist. Business can be both profitable and socially responsible. The old, worn-out false argument is that the only purpose of a business is to create value for its shareholders, and that profit maximisation and social responsibility are mutually exclusive. They aren’t. What is Shared Value? Michael Porter, famed Harvard business strategist, surmised that profitable business is the only infinite means for creating societal value, and the most powerful force for addressing the most critical challenges we face. Porter has coined the term “shared value” to define a concept by which companies become more competitive while simultaneously alleviating social problems in communities where they operate. “Shared value is about tackling societal problems with a capitalist business model. When we can get the activity into the capitalism bucket, we create magic because we can scale!” he says. Creating Shared Value In the past, corporate investment in community and environmental initiatives were often seen as “obligations” or simply philanthropy: added costs that had to be borne to minimise operational risks and protect reputation. Creating Shared Value redefines many of these obligations as opportunities to strengthen the business long-term – adding value for both shareholders and stakeholders. Creating Shared Value begins with the understanding that for our business to prosper over the long-term, the communities we serve must also prosper. Contrary to traditional thinking, businesses can create competitive advantage and shareholder value through actions that substantially address a social or environmental challenge. Shared Value as a Differentiation Historically, companies interacted with society through philanthropy. What started as simple donations to good causes evolved to strategic investment of a business’s greater resources and core competencies to address social or environmental issues – what many call CSR. Porter describes corporate philanthropy and CSR as fundamental building blocks for shared value but “shared value is different because it has the magical property of scalability”. The greatest distinction between shared value and CSR is that shared value is not on the margin of what companies do, but at the centre. It is important to understand these distinctions, because doing so enables us to consider more intelligently the ways businesses can create value for society. It’s also important to recognise that shared value should not be adopted in the place of CSR, but as a complement. Take the example of Nestlé, the corporate pioneer of the shared value revolution which now invests 80% of its resources towards creating shared value, but without taking away from the historic 20% invested in CSR programmes. Shining examples How does this look in practice? It starts with reimagining a needs-based mission statement. Consider Nestlé’s evolution from a F&B to a nutrition and wellness company. We’ve all watched Nike victoriously transcend the apparel and footwear industry to become the face of individual empowerment over personal health and wellness. Another impressive example is GE’s highly-profitable efforts at addressing environmental issues and challenges in healthcare. Ecomagination and Healthymagination have each generated new products and revenue streams while engaging stakeholders and bolstering capacity for cutting-edge innovation. But shared value isn’t just about pursuing new business opportunities. It is about partnership collaborations across sectors to tackle local issues. Cisco offers a great example of the potential for shared value in rallying cross-sector approaches to tackling social challenges like education and job placement for underserved populations. Through its Networking Academy, Cisco partners with schools, government agencies, non-profit, and other organisations in regions from Brazil to South Africa, leveraging its cloud technology expertise towards providing education and career readiness for students considering high-demand IT careers. That’s not all. Cisco works with Futures Inc, a talent management software company, to facilitate job opportunities for underserved students and army veterans and through their programme. Fifty per cent of them received a job offer within 48 hours. Shared Value for Businesses Like the examples above, companies should be in the forefront in bringing business and society back together. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mindset in which societal issues are at the periphery, not the core. The solution lies in the principle of shared value. Businesses must reconnect company success and economic value with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. We believe that it can give rise to the next major transformation of business thinking. However, our recognition of the transformative power of shared value is still in its genesis. Realising it will require leaders and managers to develop new skills and knowledge – such as a deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/non-profit boundaries. Being Generous with Dreams The change has to start from somewhere and as Pallotta best sums it, “It is time to change the way we think about changing the world.” Having a tunnel vision of being fixated on costs spent on charity distracts us from what the real cause of changing the world is all about. Our generation does not want to know how spendthrift we are on social causes but instead, how generous we are in creating impact “doing good”. It has to first start off with the paradigm shift in the way we think and how we approach “social responsibility”. So, instead of asking the next non-profit its investment cost, let us ask about the scale of their dreams, the resources they need and how we can partner to realise them. By having that kind of generosity of thought and not forcing organisations to lower their horizons for keeping their overheads low, then we can talk about scale and potential for real change. Partnership collaborations with non-profits to tackle social issues is the first step. With companies stepping in to lend strength and create shared value, then the non-profits can play a bigger role in making an impact for all who are in great need of it. We can then say that we took part in growing the capacity of changing the world and reinvented the way in changing things.

‘Are you someone else’s budget?’ Having worked in the corporate world for over two decades, I have come to realise that at the end of the day, it is not the numbers but the human factors that you will be remembered for. T Thomas (also known as TT), former chairman of Hindustan Unilever Limited (HUL, then Hindustan Lever Ltd) passed away on March 2 at the age of 90. I joined Unilever around the same time TT retired from Unilever. Although I have not had the privilege of meeting him in person, I have heard many stories about him from my (former) colleagues. TT was also the first non-European to join the Global Unilever Board and Malaysia was under his watch as well. ‘You are my budget!’ TT is best remembered as Mother Teresa’s budget. TT first met Mother Teresa in December 1974. At that time, Mother Teresa was well known in India, but not as widely known outside India. As a businessman, he thought he could extend some financial help and asked her, “Mother, do you have any kind of budget for all these projects you are carrying out?” She said to him: “You are my budget – I ask people like you who come to see me for help and that’s how we receive things.” Putting words into action This first meeting subsequently led to the establishment by HUL in 1976–1977 of Asha Daan, at Byculla in Mumbai, a home for the sick and abandoned. TT consulted Indian ad filmmaker Alyque Padamsee, the then chief of Lintas (the acronym for Lever International Advertising Services), who had always shown an interest in good causes. Alyque produced a long list of Sanskrit and Hindi-based names which meant love, hope, faith, charity, and so on. After discussion, Mother Teresa and TT chose “Asha” (Hope) and “Daan” (Gift) — and so the name Asha Daan, or “The Gift of Hope”, was born. Gifts of hope HUL transformed its warehouse on Sankli Street into a home. It took them six months to repair the roof and floors, to connect the water drains and the water supply, install toilets and kitchens with gas stoves, partitions and obtain beds and linen and all the other things necessary for a home. It was declared open on Jan 8, 1977 by Mother Teresa. It is a home that serves differently-abled, unwell and destitute people of all races. The objective of HUL in supporting Asha Daan was and continues to be to share the organisation’s prosperity in supporting the Mother’s mission of serving the “poorest of the poor”. Paying it forward Asha Daan has been set up on a 72,500-square feet plot belonging to HUL, in the heart of Mumbai city. While the sisters manage the Home, HUL bears the capital and revenue expenses for maintenance, upkeep and security of the premises. The spouses of some of the Unilever managers help look after the children and pack medicines. The destitute and the HIV-positive are provided with food, shelter and medication for the last few days of their lives. The needs of the abandoned and challenged children are also met through special sessions of basic skills, physiotherapy and, whenever possible, corrective surgery. At any point of time, it takes care of over 300 infants, destitute men and women, and HIV-positive patients. Leadership legacy This was a significant high point in TT’s lifetime and is an inspiring story of doing well by doing good is good business. God bless TT’s work and legacy! What about you ? How are you doing good through your business?