Updated: Jan 17
"Businesses are becoming places in which meaning can be created, in which mutuality begins to happen." - Marc Gafni.
What is Business? Is it a meaningless mechanistic entity developed by humans to facilitate the exchange of transactions or a living and breathing culture with its values and history to serve a purpose?
Most of the countries recognize corporates as a person by law. Corporations, like people, can be liable for the contracts they sign; they can own property and borrow money if needed. In some cases, like in the highly debated 2010 Citizen United decision in the US, they can even spend money for political lobbying.
The supporters of corporate personhood call this "legal fiction," where the intent is mainly fictional to ease the legal, contractual processes. However, the critics call that extending corporate personhood provisions can make it easier for wealthy corporations to exploit "normal" people and nature. Either way, in the 21st century, as corporations move towards personhood, we must subject them to values and ethical standards as we would to a normal human being.
A business or a corporation, in simple terms, is a group of individuals coming together to perform a defined purpose. Every business satisfies an unmet demand, and in the process, provides work for people and earns profits.
According to Harvard Business Review, "9 out of 10 people are willing to earn less money to do more meaningful work." Providing meaningful work has become a requirement for companies in the 21st century to attract and retain customers and talented employees.
What demand it should meet and how the demand should be met distinguishes one company from another and provides the meaning of their existence. Just like humans, the way a business acts in society is the reflection of its Self.
What demand should a business meet?
Bertrand Russell said, "All human activity is prompted by a desire."
Businesses traditionally have been set to create and satisfy the desires, generating profits in the process. Someone wants something, and some else provides it, generating profits that can eventually fulfill the provider's desires. The cycle continues, and the money circulates, fueling the engine of desires.
The engine was further fueled from the18th century onwards as the industrial revolution leveraging science and technology progress substantially increased the supplies. Edward Bernays, the nephew of Freud, played a crucial role in 20th century America to increase the demand by kindling our irrational Selfself's desires.
When smoking became all about freedom, we smoked, and there were always enough cigarettes. In the last couple of centuries, we perfected the game of demand and supply and even based our economies on the same model.
The question, "what is the impact of our desires?" was neither asked by us nor cared by business to explain. The consumerism perpetuated from the advertisement and entertainment was enough to keep us busy. By the end of the 20th century, our Self became so intertwined with the businesses that we even find it difficult to distinguish whether what we want is really what we want or have been programmed to want this.
In the 21st century, we realize the limits of this unlimited demand. Our existence through climate change is under threat. The non-human species are going extinct, and our inner Self has lost its meaning to consumerism leading to widespread depression and anxiety. Now we might be seeing some truth in Buddha's proclamation that "desire is a root of all suffering."
Some desires are also the greed of the need. We need food, water, clothing, transport, and housing, but how much and at what costs? If we humans can put consciousness to our desires and the sustainability of the product's supply chain, businesses will serve accordingly. The Self of business, in some way, is linked to the Self of consumers. The more we are individually aware of our shadows, desires, and values, the more significant the collective shift. If we want organic or carbon-neutral products, the businesses will shift their supply patterns.
However, it is not a one-way street. The businesses can also create conscious supply so that consumer demand patterns can change, e.g., Patagonia, with its ethos of reusable wear with fair trade practices, is creating a new demand preference. For such cases, the founder's vision is intricately linked to the organization's idea, embedding deep purpose in the story of the company's existence.
However, as companies grow beyond a point, new reality arises. "Many large companies undertake such "search and rescue" initiatives, which reflect an unfortunate truth: As a business matures, it's hard to keep its original spirit alive," write Ranjay Gulati in his HBR article on "the Souls of the Startups."
Mature businesses must become young again and keep the spirit of deep purpose alive to meet the changing demands and connect with their original Self. By integrating original purpose and values with the changing needs of the current times, mature organizations can regain clarity of their reason for existence and impact on the world.
Pepsi, under the leadership of Indya Nooyi, announced the shift from fun-filled products to healthy products. Zurich Insurance, recognizing climate change as a significant risk for insurers, announced a leading role to limit global warming to 1.5 degrees Celcius.
The parameters of how we have conventionally defined successes are changing.
How is the demand being met by business?
One reason the businesses' maturity leads to a decline in the original spirit is how the companies' success is measured. The return to shareholders has been treated as the primary purpose of the corporation in the past decades. In the 1960s, when the concept of corporate social responsibility has started gaining traction, Milton Friedman, a Nobel prize-winning economist, shunned the idea in his 1970 article in New York Times, saying, "the social responsibility of the business is to increase its profits." The corporations celebrated Friedman and continued their one-dimensional unhinged quest for profits.
However, as in the human body, unhinged growth of the cells can cause cancer; the sole, unchecked profit motive has become cancerous to corporations' system. In the one-dimensional scheme, employees are the resources for profit maximization. The customers are kings or queens whose every rational or irrational desire must be met, and social responsibility is green-washed for the branding. Everyone is competing in the same game of ever-growing profits, as Gordon Gekko in the movie "The Wall Street" famously claimed, "Greed, for lack of a better word, is good."
We need to redefine what "good" is in the 21st century. Not just the rules but the game itself has to be changed. We need systems where customers are educated on the proper consumption for their and planetary benefits, where employees and suppliers are treated as co-creators of the vision, and where the purpose of the social responsibility is embedded in the more profound meaning.
Raj Sisodia, in his groundbreaking book "Conscious Capitalism," wrote, "Business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity." We need to re-invoke such a spirit of business.
In the 21st century, when we have collectively realized the finitude of the resources of the planet Earth and the need for individual purpose, the new models and systems are being tested and implemented to determine the most suited method of working together:
Triple bottom line for success: Coined by business writer John Elkington, the triple bottom line concept is gaining traction among the corporations. The companies measure their performance through economic success and social (people incl. employees, suppliers, community) and environmental impact. In the United States, the growing BCorp movement focuses on social and ecological impact through certification and legislation changes.
Self-organization culture: To embed accountability and foster individual creativity, organizations are moving away from hierarchical models towards self-organization. This is reflected in the call for Teal organizations (based on the work of Frederic Laloux), where an evolutionary culture based on collective intelligence is developed. The systems of Holocracy are being used to design the organization structures, for example, in Zappos, where rules are designed around work and its purpose rather than titles.
Values-based Collaboration: Stakeholders (incl. employees, customers, distributors, shareholders) form the backbone of an organization. Collaborative partnerships based on values, purpose, and respect, can spread the consciousness throughout the value chains developing solid bonds and results even in vulnerable times.
Even though the new working practices are being tested with mixed results, the wish for the new modes of working is becoming more palpable. There is a general acceptance that the old modalities of working have not put humans and the environment at the center of the decision-making.
As we step in the path of changing organizational ways of working, we need to go beyond buzzwords and replacement systems to enable a change. It starts with each one of us. When we change ourselves, the world around us changes. Gandhi's statement of "be the change you want to see in the world" has more depth than seems at the surface.
Like in humans, the Self of business is constantly evolving. In fact, in his book "Reinventing Organizations," Frederic Laloux linked the evolution of human and social consciousness with the growth of the business culture. Businesses have also been compared with technology, something for humans & made by humans, but having the damaging risks if it becomes our master.
As in the 21st century, the new challenges are demanding revised structures; we must recalibrate the meaning of businesses' existence.
A startup has a different story than a mature company. The Self of a startup is linked to the founder's vision and purpose. The founder should define why they are selling, what they are selling, and what principles they will follow as they grow. Since business is attached to the founder's Self initially, setting up a company is also a founder's soul-searching journey for the founder. The visions of purpose in the Self of the founder become the seed of Self of business in the future when it touches multiple lives.
When the companies grow, the challenge changes. How can we keep the essence of the original Self alive as the leadership changes hands? The answer lies in reconnecting to the meaning of existence, the company's purpose, and the values of aspiration. There have been many cases where the founder has to return to the company when things started going south to realign it with the original purpose , e.g., the return of Starbucks founders Howard Schultz, Tata Sons name-bearer Ratan Tata, and of course, Apple curator Steve Jobs.
Corporate personhood might be a legal gimmick; however, it points us to any business's living nature. In his classic book, "The Images of Organization," Gareth Morgan said, "Let's think about organizations, as if they were organisms." The organisms evolve with time based on the feedback of the system.
In the 21st century, we must call for an inward self-searching journey of the business world to put values, purpose, and ethics in its heart. It is time to rethink, "why are we doing what we are doing?"
MQ Learning works with organizations to ignite their values and recalibrate their purpose. Please check out our offerings at: https://www.mq-learning.com/business
a) Raj Sisodia and John Mackey: Conscious Capitalism (Book)
b) Fred Kofman: Conscious Business (Book)
c) Frederic Laloux: Reinventing Organizations (Book)
d) Gareth Morgan: Images of Organization
e) HBR Article: The Soul of a Startup
g) Movie: The Wall Street