“How the hell is institute B going to work?”
Corporations exist to deliver profits to shareholders, right? Every business text book in every business school in the world tells us this. Corporations have provided to society the food you eat, the vacations you take, and the smart phones you use to avoid speaking to people when lining up for your $5 coffee – which you buy from a corporation.
So where is all of this backlash coming from against corporations?
There is enough evidence out there to support claims that corporations, left to their own devices, forsake scruples to deliver profits to shareholders. We read about short cuts that lead to oil spills, overworked and overtired employees that cost societies trillions of dollars in fatigue related accidents, cheap toys that cause sickness in children, poorly built schools that collapse, greed in the executive suites – on and on and on – resulting in the idea that corporations are bad.
institute B is a stand for something different. We operate under the premise that since people are mostly good and corporations are just groups of people, corporations are mostly good.
Instead, we are making a stand that the mandate of business must change. At institute B we are changing the definition of business. Corporations exist to add societal value and deliver profits to shareholders. One does not forsake the other. Our businesses are committed to integrating societal benefit into their corporate strategy, not as a token after thought.
Yet when we engage with the finance community and old school business people, we are met with mockery, disdain, skepticism, and cynicism. “Societal value is the good you do after you take your profits,” we are told. “Do not waste my money on adding societal value, that is my job,” they would say.
Why do we think we will change the mandate of businesses globally? Because we are making a business case for adding societal benefit in our eight partner companies. We will show that by making a concerted effort to create abundance throughout your supply chains you will actually deliver bigger financial results than only focusing on profits.
This is not green-washing and marketing. This is a fundamental shift in how businesses operate.
What is societal value? It could be supporting efficiency improvements in your suppliers’ factories. It could be generous compensation incentives for employees. It could be entrenched charitable contributions to your communities on a transactional basis.
We have already seen evidence of customer acquisition because of our philosophy and generosity. The more we deliver abundance in our every day business affairs, the better our relationships will be with suppliers, employees and customers.
Keep reading. As our companies grow and develop, we will share many lessons of success and failure in our pursuit of changing the mandate of business.
Written by: Darrell Kopke, Skool Principal
In the spirit of the holiday season, I sum up my support for iB’s commitment to change the old business paradigm to a values-driven mandate with a great big, shinny, Jewish Halleluiah!
Most corporations, even those peddling sustainable products lack the integrity and patience required to commit to values-driven business methods. Hence the mess our planet is in.
Our global economy and the disillusion of our social fabric are directly correlated to doing bottom line business and treating people and the planet as afterthoughts. The model is broken and can’t be patched up.
We need a paradigm shift, a new model. And iB’s got it. It so happens that it pays to be good! “A meta-analysis between corporate social and financial performance” done in 2007 by Margolis, Elfenbein and Walsh clearly shows positive financial correlations when companies adopt a value-driven business model.
http://stakeholder.bu.edu/Docs/Walsh,%20Jim%20Does%20It%20Pay%20to%20Be%20Good.pdf
Embedding our values in our business may mean forgoing short-term profits for the sake of greater prosperity over the long haul - I guess that’s why it is called an investment. It also definitely requires patience. It means we have to listen to and treat this little blue world, our employees and our customers justly and with respect - what a concept – and place the impact of our foot print ahead of the mighty yuan. It means living a life of purpose and fulfillment. Thanks for taking this on iB.
PS: If you want more info try “Values-Driven Business: How to Change the World, Make Money, and Have Fun” by Ben Cohen and Mal Warwick
http://www.bkconnection.com/static/Values_Driven_Business_EXCERPT.pdf
Thank YOU for your support, we really appreciate you! And thank you for the book recommendation, it’ll definitely go on our reading list.