A global corporation’s new strategy has broken down my wall of scepticism….
Big business can be a force for social good as well as a generator of economic value. Indeed, arguably, some of our big corporations take a more robust and consistent approach to issues like environmental sustainability and international human rights than many governments. Jon Miller and Lucy Parker championed corporate good deeds in their recent book and talk ‘Everybody’s business’. As they report, the spur for a company’s serious focus on social value is often soul searching following some kind of reputational disaster.
Over the longer term, as Michael Porter and Mark Kramer and many others argue, the most powerful and resilient approach to corporate responsibility is to build it into the core business model (Porter and Kramer call this approach ’shared value’).
Before the credit crunch banks gave away hundreds of millions of pounds in sponsorship and charitable schemes, while at the same time enriching their senior employees by shortchanging both their customers and the global economy, thus providing a classic example of tokenistic corporate responsibility. Various people now working with banks as they seek to salvage their reputation tell me the financial sector still finds it almost impossible to accept there is no future in selling profitable products which are bad for people and society.
Any robust strategy has to recognise and candidly confront the inevitable tensions between profit maximisation and social impact. I recently gave a talk to an energy company whose mission statement asserted its top goal was giving customers a great service. In reality, of course, the company’s goal is to make a profit while – one hopes – giving customers the best service possible. To fail to recognise and face up to that tension creates a barrier to the kind of robust self-examination corporations should welcome and encourage.
This is one reason I was so impressed by the strategic turn taken by the global education corporate Pearson – an initiative led by my former Number Ten colleague Sir Michael Barber and his colleague Saad Rizvi. Pearson has committed to a big goal and to a thoroughgoing long term process of organisational change involved in delivering it. The goal is ‘efficacy’: by the end of the change process every Pearson product and service must have ‘a measurable impact on improving peoples’ lives through learning’.
Unlike the energy company with its vacuous mission, Pearson recognises explicitly the challenge of combining the ultimate aim of efficacy with providing a return to investors. The issue is not so much whether or nor to be self-interested. The strategy is based on a calculation that long term it will be efficacy that matters most and this goal has to drive out short term pressures to design and sell stuff that makes a profit but doesn’t work for learners.
Pearson’s commitment is not simply a vague goal declared by company bosses. A very thorough project – laid out in the report – has been undertaken to develop an efficacy framework and then to roll this out to tens of thousands of staff in every division worldwide.
It is well worth reading Pearson’s own account of their journey, an account whose credibility is enhanced by a recognition that it is far from complete and an invitation to educationalists, the company’s partners and clients to comment on the goal and the process behind it.
There are many challenges ahead, not the least of which is the lack of strong evidence for the efficacy of almost all existing educational interventions, but I genuinely think that what Pearson is trying to do marks a new frontier in responsible corporate strategy. Unlike so much other well-meaning CSR, this is the risk-taking institutional innovation to which businesses should aspire.
I was saying as much to a friend last night who is a senior executive in a company that provides major services to Government and who is – in the face of his own company’s reputational challenges – recognising the need for new ways of doing things.
He was intrigued by the Pearson approach and while he didn’t rule out simply copying it he asked whether his own company might develop an alternative mission to efficacy. My suggestion was trust:-
‘How would it be’ I asked ‘if you committed not to provide a service or product unless you had strong evidence-based and publicly-declared reasons for believing that to do so would enhance trust in your company, the service and the agency paying for the service’?
‘It’s a great idea’ he said ‘but there’s one problem; if we were serious we would have to stop bidding for most Government contracts’.
BTW -in case you are wondering, Pearson is not currently funding the RSA.
I’m in Helsinki to meet with our growing band of Finnish Fellows and to speak tomorrow at a conference they have organised. Rather to my consternation not only am I sharing a platform with some rather senior Finnish figures but the title for my talk seems to be simply ‘good society’. Apart from ‘the meaning of life’ it is harder to imagine a tougher brief for a twenty minute speech. Nevertheless I will have a go and what follows will be a key part of my argument.
Despite globalisation, travel and migration, important differences between countries persist. Cultural traditions, social norms, patterns of inequality, educational attainment and the quality of the public sphere are all examples of differences between countries which are as likely to grow as diminish. Most permanent incomers to new countries keenly adopt the norms and expectations of their new home, often including antipathy to the next round of incomers.
It is therefore relevant and important in every nation to talk about the kind of society its people want to create and sustain. Yet this conversation rarely takes place. Sure, we talk about all kinds of aspects of society and how we might change them but the deeper question of nations as a whole, what makes them work and what we want them to be, rarely gets beyond vague lofty aspirations.
Although countries remain importantly different, most of the developed world is experiencing a combination of declining trust in democratic institutions alongside a rise in political populism. Is this perhaps because the populists, while generally lacking credibility and coherence, speak to this yearning for a national project which binds and inspires people?
There are two interconnected processes which have hollowed out public discourse over societal progress; one ideological and one intellectual.
The first concerns the triumph of left social liberalism and right economic liberalism (the subject of a fascinating extended essay by David Goodhart, Director of Demos).
While left social liberals are clear about specific things that they want to change – discrimination, poor social mobility, for example – they are more uncomfortable with good society talk: Partly this is down to an ambivalence (based on a commendable internationalism) about the whole idea of nations as cultural unifiers; partly because the idea of one person’s or group’s idea of a good society being better than another clashes with a relativist world view; partly because they don’t really have a script – and certainly not a normative script – that enables them to talk about things which are clearly part of most people’s idea of a good society – social norms , family and community bonds, traditions, duties etc.
For true economic liberals, talk of a good society is positively dangerous, providing cover for all kinds of meddling by Government, erroneously implying that it is possible to plan for social progress and ignoring the fact that the route to collective success can be more or less entirely be paved with individual market based choices.
Tied up in the triumph of liberalism is an important intellectual barrier to an exploration of the characteristics of the good society. In the sixties and seventies a schism took place between sociology and economics in which the former largely abandoned the Durkheimian tradition of functionalism (the study of how society works) in favour of a Marxian focus on oppressive power (the study of how society doesn’t work for various subjugated groups). Meanwhile the triumph of the neo-classical school drove economics away from thinking about how to overcome the inherent instabilities and inequities of national economies into the ever more arcane study of the assumed perfect functioning of the free market. Meanwhile, psychology went more micro and political science became more technocratic. Arguably, only anthropology managed to maintain a focus on the functions and disfunctions of societies and cultures as a whole.
So what is to be done? First, mainstream politicians need to find coherent and inspiring ways of talking about the good society and the good citizens and institutions which will be needed to grow it. Here I strongly agree with Roberto Unger that progressives must move beyond a privileging of greater economic equality as the only thing that matters. Instead the starting point must be a commitment to a society in which people can live the fullest lives of which they are capable (of course, this begs a thousand questions, but they are the right questions to be asking). Sure, it is hard to see how we could make progress without tackling inequality, but when it comes not only to the good society but what most people really care about, it is a means, not an end.
Second, I favour a neo-functionalist way of analysing society. I have outlined my favoured version of this - cultural theory – in many blogs and lectures. To this view stable societies tend towards a complex functional balance of hierarchical, solidaristic and individualistic forces. However, the optimum balance is rarely achieved and, even when it is, is always at risk of destabilisation. This is because these three sources of power (of authority, of the group and of the individual) are inherently in tension, but also because contextual factors differentially strengthen and weaken the three forces.
The most obvious example of this latter process can be seen in the decline of hierarchical authority in the developed world (here is Moises Naim talking about his book ‘The End of Power’). This decline is the consequence of various trends such as population mobility, affluence, higher levels of education and the shift of technology from being primarily a resource for authority (only big organisations could afford main frames) to becoming one which is a tool for new forms of individualism.
Which brings us full circle. Unless you are an anarchist, your good society is likely to be overseen by responsible and respected sources of authority. In the twenty-first century that kind of authority has to be very different to old closed elites. It has to nurture solidaristic feeling by articulating a powerful and binding mission of the good society while seeking to maximise the degree to which individuals and groups can themselves adapt and build toward that mission.
Thus one of the ways in which putative social leaders might start on the road towards a good society is to have the courage to start talking imaginatively and concretely about what that good society might comprise.
In his e-book anti-hero, Richard Wilson describes the malign characteristics of the heroic leader as over-confidence, a lack of empathy, inflexibility and being unable to recognise uncertainty. Conversely, the benign characteristics of the anti-heroic leader are being empathic, humble, self-aware, flexible and comfortable with uncertainty.
There is some tilting at windmills here. I suspect even Fred the Shred would have denied neatly fitting the former list or totally rejected the latter, but I also have a semantic quibble: Surely, to exercise the qualities Richard extols under the growing day to day pressures of organisational leadership is itself heroic? We might particularly think this having explored something rarely acknowledged, that leadership is inherently tinged with pathos.
The very pursuit of high office has elements of delusion and futility. Lacan plangently described falling in love as ‘giving something you don’t have to someone who doesn’t exist’. Our ambitions and the objects of our desire are displacements of our instinctive desires. The claim of leadership may be dishonest. We say it is to make the world better but it is really an attempt to make us feel better. While the fulfilment of that ambition is futile as we are likely to find the desire that drove us remains unfulfiled. Whisper it quietly to the young and ambitious, but they will probably one day abandon leadership not because they are satiated but because they are defeated or exhausted.
And when we give up the struggle how quickly the waters close over our heads. The one thing of which most leaders can be sure is that a few weeks after their leaving party their successor will be announcing plans for a root and branch strategic review with a mind to achieving transformational change in what the new leader sees by implication as an outdated and creaking institution. If you want to feel the full force of the transience of status try visiting somewhere you used to be a leader a few years after you’ve left it. New staff won’t know who you are and old ones will try to hide their embarrassment at the fact that it has long become a recognised fact that your reign was mediocre at best.
Finally, heroic leaders often remain unsung. We live in a short term world with a shrinking attention span and little or no respect for the recent past and those who inhabited it. Yet, a large part of good leadership is about laying down long term foundations and addressing weaknesses and risks before they turn into problems. Some of the best and bravest decisions any leader makes may remain virtually unknown until years later when a successor – who may be of little merit – gets the credit for a long since made investment. This may have been more bearable in a slower moving, more deferential world with a more settled and self-assured leadership class but when blame and reputational disaster can move so fast, it is hard to expect leaders to await their reward in heaven. In my view Richard definitely left one leadership virtue off his list – stoicism.
None of this is to say that I would advise against the ambition to lead. It would after all be pretty hypocritical to do so. Love may be ‘the hysterical illusion we are no longer alone in the world’ (Lacan again) but it also makes life joyful and motivates great acts of courage and compassion. Leadership may be self-deceiving and futile but it also solves problems, drives progress and can release our most noble capabilities. To understand the tragedy of leadership is not to abandon it. As the stoics argued, resignation – particularly resignation we have chosen to adopt – can be a source of wisdom and comfort.
On Monday I had the honour of interviewing the great writer and practicing psychoanalyst Adam Phillips. Near the end (I won’t say when because you ought to watch the whole thing) an audience member asked about coaching for leaders. Phillips wanted to know what the purpose of the coaching was seen to be; merely to make the boss a better profit maker perhaps?
I am a supporter of leadership coaching. Partly for the reasons I have given, leaders need a safe place in which they can stop leading, unburden and be human. But coaching, like analysis, should not promise, or perhaps even offer, to provide instrumental success. Coaching may make us wiser in part because it makes us sadder (I have heard analysis described as ‘replacing hysterical neuroses with everyday melancholy’). Equally, and this possibility should perhaps be explicit from the outset, it might inspire us to find somewhere a little less exhausting to displace our insatiable desires.
Text messaging and social media have become an increasingly common part of customer service. Here are two contrasting examples:
New parents can sign up to any number of information services from the NHS, the third sector or private companies. One common service is a text that coincides with the infant getting older, initially weekly and then monthly. The texts can be very reassuring telling parents what they are likely to expect at any precise age: for example, reassuring the parent of a 16 month old that it is perfectly normal for a toddler to veer between being completely charming and utterly inexplicably furious.
At the recent Fairbanking awards held at the RSA many of the accounts that were highly rated, including the first ever to receive five stars, had systems for texting people warning people of the danger of going overdrawn and encouraging them to save. The best accounts seem to increase substantially the propensity of customers to save for ‘rainy day’ items like holidays, houses or weddings.
The significance of the second example lies in the possibility that it offers a way out of the free banking problem. As Adair Turner argued last year, the problem with banks offering free current accounts to customers in credit is that it is not the basis for a viable retail business model. For this reason, the banks have to find other ways of making money which they have consistently done by misleading offers, dodgy fees and dodgier products. For years bank leaders have admitted off the record it is almost impossible to find a virtuous way of making money out of customers as long as free banking (which is unusual in other countries) persists. When asked why they don’t simply start charging, the banks freely admit that they don’t trust their rivals not to swoop down and opportunistically steal their customers.
But if, through texting and other means, banks offer an effective and personalised information and support service we may find a way out of this deeply damaging dead end. Income on accounts in credit can be made in two ways – either through a differential on the interest rate earned by the bank and paid to the customer or through a service charge. To win a Fairbanking seal of approval accounts like the RBS/NatWest Instant Saver with Savings Goals have to show both that they offer interest rates broadly in line with the market average and that they don’t use the old trick of offering bonus rates at the beginning which quickly taper off once the customer has been hooked.
More broadly, there is little doubt digital and social media based customer service will grow and grow, but a game changer could come if we start to select and judge these services by their behavioural efficacy. So, for example, an important part of deciding which gym to join might be the digital customer engagement service it provides; by combining behavioural psychology with personal data and algorithmic learning these services might soon start (if they haven’t already) to provide more than just useful information; they will promise – like the Nat West bank account – to help you personally meet your goals.
As customers we can then judge the service by that same criterion: Did the nudging from the gym make me go more often? There may, of course, be other criteria we apply. ‘Go to the gym NOW you lazy git’ may work as a message but I might also find it offensive. However, the technology should quickly be able to work out what kind of messages you respond to well – especially when it gets easier to trawl data and combine information from different products to develop a fuller picture of our motivational character. It is already the case that platforms like Google and Amazon seem to know our tastes better than we do.
Hopes for this new world of relational services should be tempered by some reservations. Raised expectations must work both ways. If I am regularly getting personalised text messages it would be unforgivable for the service provider to then worsen the deal I am getting without alerting me. As the exploitation of information imbalances and customer inertia have been an integral part of the business plan of banks and energy companies for decades, this is a major challenge and one I suspect most these companies don’t yet fully appreciate.
Also, perhaps the behavioural impact will be less than we hope. What works is not necessarily what sells. The impact on saving levels of the NatWest account described above has impressed behavioural economists but it may be a one off or may not last. After all, globally billions of pounds are spent on diets that don’t work and self-help books that only make us more miserable. One reason diets fail (apart from the dubious motives of those who promote them) is that we are living in an obesogenic society. Individual nudging can be useful but it needs to be part of a strategy that includes wider public education and engagement, shifts in social norms and sometimes state regulation.
While relational services in the public and private sectors hold the prospect of helping us live bigger, better lives we should never forget that major and sustained behavioural shifts are inherently social phenomena.
I was flattered to be asked to give a speech at Southampton Solent University this morning, at their Vision for 2020 Conference. Southampton is close to my heart as I was at university there so I was delighted to accept.
In a slight departure from the norm (for me), I’ve done a full text, which has gone to local RSA Fellows and the local press. The core idea is that the institutions, businesses and communities of Southampton make fifty commitments to improve the city to coincide next year with its fiftieth birthday as a chartered city.
If you ‘re interested, you can read it here: Speech to Southampton Solent University October 2013. It would be fantastic to have thoughts from Southampton Fellows (thanks to those who have sent me emails – I’ve had some really helpful comments).
After the speech the audience will be discussing the idea so I’ll add some reflections later.