And its increasing relevance in our political and economic circumstance.
“I don’t care!”
That’s how Net1 CEO, Serge
Belamant responded to a question on whether the national budget could
accommodate an increase in their charges for extending the SASSA social security payments. “It’s not my
problem,” he told an eNCA reporter.
Those first three words
not only tarnished his own brand, but added a further blemish to business generally.
They were more harmful than the racial spats and social media furore around
colonialism because they played into the hands of anti-free enterprise rhetoric
where they added another layer of fabricated malevolence to the “white monopoly
capital” bogeyman. In turn they make populist politicians increasingly immune
to the fragile business, fiscal, monetary, and investment environment.
That is the first context: the need for business
leaders at any level to be aware of the extent to which business itself is in
the middle of a deepening populist political divide that has become detached
from logic. Frankly, business should have been outraged. That it was not,
speaks to the second context: which is confusion around purpose.
For decades since the
early 80’s business has adhered to a near exclusive profit purpose in line with
Milton Friedman’s statement that: "There is one and only one social
responsibility of business – to use its resources and engage in
activities designed to increase its profits." Belamant could clearly argue
that he stuck to that guideline. The fact that his main shareholders – Allan Grey at home and the International Finance
Corporation in Washington took issue with him, demonstrates a new business context
reflected in King IV: creating value for all; inclusivity; and stakeholder
cohesion. In the Contribution Accounting Methodology, I argue that even those dimensions are subservient
to one super-ordinate existential purpose: that of serving customers. Here
Belamant breaks a cardinal rule by implying that a customer’s problem is not his
or his company’s. Compounding the irony is that his major shareholder
represents organisations who profess to be guided exclusively by the customers’
needs; in this case social grant recipients.
This gives another
intriguing context, or question. Is there a continuing rift between
shareholders and the executive? Are they caught on opposite sides of the short
term profit maximisation requirement and the longer term sustainability
argument? As long as executives reflect
an agency system with skewed short term incentives, that ambivalence will
remain. It then spills over into forked-tongue messages between executive and
staff and between the company and its customers.
All of the above can be
captured in the most important and overriding context of all: the human moral
compass and the values it reflects. Here we can find a peg to the values fought
for in the French revolution and that informed many a modern constitution,
including our own. The clarion call for: Liberty, equality and fraternity,
inspired many subsequent civil uprisings and rings familiar in South Africa
even today.
Each element can be
unpacked from various perspectives, which is way beyond the confines of this
article. What is the most intriguing is the near exclusive attention given to
the first two tenets – that of liberty and equality – and the third, fraternity,
is seldom discussed or aspired to. It can be described as the forgotten value.
That is most likely because it has been seen in a narrow context of
“brotherhood; solidarity or comrades-in-arms.” It finds further succour in
collective identities such as nations, patriotism, race, teams, families, etc.
But of course it can, and
should be extended to give it far greater validity and relevance. The French,
and other revolutions, would have gained much credibility and aspirational clout
by embracing empathy as a whole, and indeed replacing the word fraternity with
empathy.
The fundamental importance
of empathy to human survival has been argued over centuries. It is self-evident
that without a very large measure of empathy between our fellow creatures,
humanity would simply self-destruct. I have argued the business case for
decades, including in my last two books. The power of caring in business – as a sound business principle and
not merely as P.R. spin – has been virtually ignored as companies hold on to
familiar shareholder value criteria. The exasperating mischief that they then
continue to make, is to argue that caring in business somehow implies
sacrificing profitability. That is such nonsense. It ignores that value-added,
or wealth creation itself, is the outcome of contribution to another –
irrespective of the motive of the contributor.
We are faced with two
business perspectives: one that leans towards profit and survival, and the
other towards service and empathy. One based on a profit/cost understanding and
the other on a Wealth creation/distribution paradigm. A comparative analysis between
the two was done in this Moneyweb article. There is clearly a lack of appreciation of the benevolent
existential underpinning of all transaction. Indeed, counter-intuitively to
that, much effort has been expended on arguing the case for the
self-gain/profit driver as the catalyst for success.
What is missing is
comprehensive research and analysis on a global scale of the calculable harm
that this driver has done – harm that could have been avoided and massive costs
saved by applying empathic, values driven criteria. It certainly could have
saved Net1, Ford, Samsung, Volkswagen, Barclays, and many, many others, much
soul-searching, financial losses and brand tarnishing. (See Fortune magazine scandals of 2016 here.)
The fact that without
empathy or caring for each other, our species would become extinct should
inspire us to pursue it as a value at all levels in our existence.
It should become a national
aspiration. Because it is the ultimate game changer.
