Jamie Mitchell is the founder of All Together and previous CEO of innocent drinks, Daylesford Organics and Tom Dixon.
With business finally changing its ways, trust is rising. Business leaders should double down on this new found respect, and finally work together on a modern vision for our economy and society, and the role that business should play within it.
Trust in business fell off a cliff after the financial crisis of 2008. Many observers predicted, following the crisis, that a new consensus would emerge around capitalism and the role and responsibilities of business. But no such consensus emerged, and in the past decade – despite a noticeable growth in corporate social responsibility and business activism – trust has continued to decline.
Until now.
According to Edelman’s latest Trust Barometer, trust in business rose last year, as people reacted positively to the civic leadership shown by many business leaders in response to the COVID epidemic, from feeding NHS key workers and low income families, to innovating new health technologies and developing vaccines at supersonic speeds.
What marks out this recent bout of civic leadership – what differentiates it from the CSR initiatives of the past decade – is the authenticity with which it was carried out. The businesses who gave back to society last year did so because they genuinely cared. Not to make themselves look good. Or to give their brand a nice shine. Their motivations were real, honest and right. And the public has responded with a reduced scepticism and more positivity towards business.
And this presents a unique opportunity for business and business leaders today. An opportunity, finally, to build a new consensus around the role and responsibilities of business in society.
The rise of Purpose, and the birth of the Modern Corporation
A little over 20 years ago, innocent drinks was founded with an underlying ethos: to create a business the founders could be proud of. They settled on a simple purpose, to “make food good – good for us and good for the planet”. And so they started with their first product, the fruit smoothie.
innocent is a case study in how to do so many things differently, especially in the world of marketing and communication. But, for me, the most important impact of innocent drinks today is the part they played in de-corporatising business. From their focus on culture and values to their emphasis on employee well-being, from their leadership on climate change and sustainability to their 10% of profits that always went to charity.
innocent embedded its ‘good’ purpose in to everything it did. And, along with a handful of other companies, began a new wave of progressive business leadership not seen since the ethical tycoons of the industrial revolution.
Today, a clear purpose is at the heart of every millennial and Gen-Z start-up. And it is central to a broader movement of progressive business, one that has moved beyond mitigating our impact on the world and instead seeks to contribute to the world.
Even big business is getting in on the act. In 2019, Larry Fink, the CEO of the world’s largest asset managers Black Rock, used his annual CEO letter to call on companies to clarify their purpose beyond profit; that same year the Business Roundtable declared that the purpose of business was no longer to maximise profit, but instead to promote an “economy that serves all“; and Sir Ronald Cohen, the bastion of the UK Private Equity and Venture Capital industry, has recently been tub-thumping around the world for reshaping capitalism to drive impact, not profit.
Of course, it’s easy to make these bold declarations. Doing it is hard. Embedding a strong purpose in to your business requires it to be deeply embedded in to strategic plans, as well as governance and finance structures. And you need a wholesale revolution in your corporate culture.
When successful, a strong purpose can transform a business in to a very different kind of corporation – a Modern Corporation (to borrow with pride from my friend, @Irene Sandler). These modern corporations are, quite simply, ones that care: They care about the planet; they care about their communities; they care that they appropriately represent women and ethnic; they care about the wellbeing and agency of their people. And, increasingly, they care about how widely they distribute their power and wealth.
Reimagining capitalism and the role of business in society
COVID has brutally opened everyone’s eyes to the fragility of our world, and to the social inequalities within it. And business has reacted in the most incredible way. Whether solving the ventilator challenge or supporting the NHS – they opened their minds, and their wallets, towards the problems plaguing our communities. And in doing this, business showed society – and itself – that it could contribute and affect great change, and there has been a great awakening of its duty to do so.
As we bounce back from this crisis – as we ‘build back better’ – I would challenge every business leader to ask themselves, “what is the role of business in society?”
We know it’s not the single-minded focus on shareholder capitalism of the last 30 years.
We know it’s not business as usual.
We don’t have time to debate the merits of a Net Zero strategy. We don’t have the right to ignore the systemic injustices in society that are reflected in our own organisations. We can’t refuse agency to our people. And we simply shouldn’t distribute the wealth our businesses create – so much of which can be down to simple good luck – to a tiny minority at the top.
No. The only way to bounce back better is to reimagine capitalism and redesign our organisations to be Modern Corporations – purposeful, caring and progressive, and a genuine force for good.
To apply for support for your business from Jamie or any of the All Together Volunteer Advisors, simply visit www.alltogether.company/apply
