Profits of Transition

“Chaos is the primal state of pure energy

for every true new beginning.”

– William Bridges

|Photo by James Cridland|http://www.flickr.com/photos/jamescridland/3947254236|

To say that these are uncertain times would be stating the obvious.  And yet I’ve found myself uttering this increasingly to the organizations and initiatives with whom I am working, often met by a temporary sigh (ambiguity loves company, or at least momentary normalization). This uncertainty was perhaps best captured by a client who recently said, “We went into transition in 2007 and never came out!”  At IISC and our partner organization, Interaction Associates, we’ve also been feeling the strain of this extended global “groan zone” in which we find ourselves.  And amidst the angst there are some exciting conversations happening on both sides of the Interaction house that I (no longer so secretly) am hoping will tear down some walls.  William Bridges, in his classic book Managing Transitions, talks about the work of transition as not simply being about “getting through intact” but about emerging different and better.  I am convinced that this is a call to rethink some of the sectoral divisions we have established that are not serving us well.  Surely we can do and be better, as is suggested by the re-posted Guardian Sustainable Business blog post that follows.  Interaction Brothers and Sisters, readers from all sectors, prophets of profit, what are your thoughts about Jo Confino’s words below and how might we create “a framework for more harmonious balance”  to take us the next step in our collective evolution?

How to begin balancing good intentions with the need to make money

I have been feeling my way round a moral maze these last few days, seeking to understand better the relationship between being a force for good and making money. Are they incompatible or is it just our dualistic minds that often makes them so?

Both the corporate and not-for-profit sectors are confronting the nature of this relationship head-on, but often coming from opposite directions.

Companies that see their core purpose as maximising profits are being forced to recognise they can no longer ignore their inter-connectedness with both human society and the natural world.

This understanding of their broader responsibilities is at the heart of the corporate sustainability movement, even though for the vast majority of companies it still represents only a thin veneer rather than a moral imperative.

Coming from the opposite direction are those corporate and charitable organisations that seek to fulfill a higher purpose but are increasingly under pressure to be financially sustainable in a world where budgets are being squeezed and competition is increasingly global and fierce.

The Guardian, for which I have worked for nearly 20 years, is owned and supported by the Scott Trust and is primarily concerned with the pursuit of social justice. But it is having to sharpen its commercial instincts in order to become financial sustainable.

Andrew Miller, chief executive of the Guardian’s parent company Guardian Media Group, told me recently that while he applauds the culture because it’s is driven by a common desire to have a positive impact on society, “we still have to make ends meet and work within a commercial framework. How to do that without compromising our values can sometimes be a difficult tightrope to walk.”

CP Scott, the Guardian’s great editor of 57 years, made the point very clearly in his centenary leader column in the paper back in 1921, which still provides the guiding star for the Guardian’s direction.

While recognising that the paper is a business and must pay its way, he made it absolutely clear that money and power often degrade our sense of shared values.

He wrote that the Guardian has “a moral as well as a material existence, and its character and influence are in the main determined by the balance of these two forces. It may make profit or power its first object, or it may conceive itself as fulfilling a higher and more exacting function.”

Cafédirect is another company I’ve met with recently that is having to redefine the balance between its values and economic realities.

The passion of those who work at the Fairtrade hot drinks company is palpable. That’s not altogether surprising since the business was created to counter the greed of western companies that often resulted in poverty for the farmers who were supplying them.

Cafédirect recently won a Guardian Sustainable Business Award in recognition of the fact that over the past five years it has ploughed more than half its profits back into the businesses of its grower partners, blazing a trail for reinvestment in the communities it trades with and giving its growers a say in how the business is run.

But despite all this good work, Cafédirect is being severely squeezed by supermarket competitors whose main passion is altogether different – growing market share by jumping on the Fairtrade bandwagon and meeting the minimum requirements of the certification scheme.

Cafédirect is therefore having to rethink its strategy and become more commercially focused in order to prevent itself going into long-term decline.

One company that appears to have found a reasonable balance between profit and purpose is Arup, the independent global firm of designers, planners, engineers, consultants and technical specialists.

I was invited to give a talk at the company on the subject of business transformation a few days ago and did some prep ahead of my visit. I had heard many positive things about the company and was interested in what lay behind its reputation.

In similar fashion to CP Scott’s leader column, Arup’s founder Sir Ove Arup left behind a “key speech” in 1970, which is required reading for each person who joins the company and is the foundation of its principles.

Sir Ove wrote of finding the balance between being a humane organisation, providing social usefulness, via straight and honourable dealings, while providing reasonable prosperity to its members.

What is made absolutely clear is that this prosperity should not be the main aim of the company: “We should rather look at it as an essential prerequisite for even the partial fulfillment of any of our aims. For it is an aim which, if over-emphasised, easily gets out of hand and becomes very dangerous for our harmony, unity and very existence.

“Moreover, if money is made the main aim – if we are more greedy than is reasonable – it will accentuate the natural conflict about how the profit should be distributed between our members – the partners and staff or the different grades of staff. The trouble with money is that it is a dividing force, not a uniting force … If we let it divide us, we are sunk as an organisation – at least as a force for good.”

So how do we as individuals and corporations find a framework for a harmonious balance?

Dr Tom Crompton, change strategist at WWF-UK, gives some valuable clues in his work on values that highlight how our minds work dualistically. All individuals blend a mixture of extrinsic goals – their desire for social status or financial success, which is based on ego and individuation, and intrinsic goals: their connection to family, friends, wider humanity and the natural world. The key point of understanding is that these values suppress each other: the stronger someone’s extrinsic aspirations, the weaker his or her intrinsic goals.

So companies or individuals that strongly value financial success have less empathy, stronger manipulative tendencies, a stronger attraction to hierarchy and inequality, stronger prejudices towards strangers and less concern about human rights and the environment.

Conversely, those who have a strong sense of self-acceptance have more empathy and a greater concern about human rights, social justice and the environment.

George Monbiot, writing in the Guardian on Crompton’s work, argued that people with strong intrinsic values must cease to be embarrassed by them: “We should argue for the policies we want not on the grounds of expediency but on the grounds that they are empathetic and kind; and against others on the grounds that they are selfish and cruel. In asserting our values we become the change we want to see.”

I think he is half right. The answer is not to discriminate between our extrinsic and intrinsic values by seeing one as bad and the other as good, for that serves only to set one part of our mind against the other.

A better way forward is for each individual or company to deeply understand their motivations and prejudices as well as what lies behind them. By going through that honest process we come to the recognition that it is only by unifying our internal conflicts that we can start to truly believe in a positive future in the world around us.