In this issue:
Values Re-Discovered by Business
I had a chuckle when Gunther Weil sent me the article by Harvard Business School professor Rosabeth Moss Kanter titled, "The Strategic Value of Values: A New Guidance System". I was left wondering how values had suddenly become a New Guidance System. After all, values have been guiding human behaviour since humans came into existence. Initial reaction aside, her article makes some excellent and very valid points:
- Any company can say they have values, but the values need to be embedded in business practice to make them credible.
- Genuine values-based-organizations [VBOs} go beyond lists of values posted on walls and websites by using their codified set of values and principles as a strategic guidance system. They gain business advantages from actions they take based on the societal responsibility these statements imply.
- Companies of with new or renewed values and principles which they have consciously embedded in all their business processes, not only speak to high standards of conduct but also stretch those enterprises beyond their own formal boundaries to include their extended family of customers, suppliers, distributors, business partners, financial stakeholders, and the rest of society.
- VBOs gain both a moral compass and an entire guidance system.
Kanter says, many people are focused on the global economic crisis, yet there's also a global crisis of business. In her new book, SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good, Kanter argues that the model of capitalism which worked so well to raise the fortunes of millions of people last century appears to have hit a wall, "In its place must arise a new model of the company, one that serves society as well as rewarding shareholders and employees."
Saul in, The Collapse of Globalism and the Re-invention of the World, predicted in 2005 that the current economic crisis was coming and was an inevitable consequence of the current economic system's disconnect between trade growth and growth in wealth. He points out that, while there's been a spectacular growth in trade over the past decade, there has been only modest growth in wealth, and for many, wealth has declined. Saul asks, "Is it possible that an over-obsession with trade -- with the movement of goods and parts of goods -- distracts us from the creation wealth? Is it possible that trade taken out of a sensible economic and social equilibrium actually depresses wealth creation?
"Is it possible that a sizable portion of our growth in trade relates not to a revival of capitalism, but to a decline into consumerism? Note how many of of the leading modern economic historians equate consumerism not with wealth creation and social growth, but with inflation and the decline of citizenship. Why? Because there is a constant surplus of goods that relate neither to structural investment nor to a concept of economic value, let alone to societal value. This in turn makes makes nonsense of the ideas of competition, comparative advantage and supply and demand.
"Measuring success by gross domestic product is a dubious approach to life. But if you do, you discover that GDP growth per head over the last three decades has been quite modest -- less than half that of the pre-Globalization quarter century. It has been particularly subdued in Western democracies, disastrous in both Latin America and Africa, and remarkable in large parts of Asia.
"Trade -- with or without capital markets -- is meant to serve the economy. It is not a purpose. It is a service. If it does not serve, it may become a counter productive distraction. It may even become an unusual form of inflation, one that we are not used to identifying, let alone measuring. And so we act as if something is happening that is not happening."
"Klaus Schwab, the founder of the annual CEO gathering at Davos in Switzerland and a predictable echo of what the mainstream is thinking, now warns of 'fragility' and of Globalization leading to 'the first really synchronized world recession and the risks of economic implosion.' These days Alfred Eckes is quoting Keynes in the 1930s: 'The age of economic internationalism was not particularly successful in avoiding war.' Eckes's interpretation of Keynes is that 'free trade, combined with capital mobility, was more likely to provoke war than to keep peace.'
"Meanwhile, a growing number of highly respected figures speaking outside of the Western democracies are turning their backs on theoretically scientific interpretations of global success such as trade statistics and cumulative GDPs. What they see are real people whose actual standard of living apparently must drop in order for them to appear to rise in Western-style statistics. How can that be? For example, these people may have been living a life beyond such measurements -- perhaps rural lives. They are therefore technically existing on zero income. Then they move to a desperate urban slum where dirty water, sewage and alienation are the norm. But in such a place, even a dollar's worth of income can be measured. And so Western measurement systems say they have taken a step forward and upward."
Marylyn Waring, in her film, Who's Counting? made similar observations. She gives an example where the system of Western economics counts as more valuable the work of an American military officer who earns $40,000 per year just to stand ready to push a button to launch a missile to destroy an attacking missile (which may never happen), than the work of a housewife to stays home to raise children--her work is not counted in the economic system so has no value.
It's time we constructed a society where what we do matters more that what we earn. Where growth in wealth is synonymous with growth in the number of people reporting an increase in wellbeing.
References
Kanter, R. 2009, SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good, Crown Business, New York.
Saul, J. R. 2005, The Collapse of Globalism and the Reinvention of the World, Penguin Books, Australia.
Waring, M. 1995, Who's Counting? Marilyn Waring on Sex, Lies and Global Economics, National Film Board of Canada. http://www.onf-nfb.gc.ca/eng/collection/film/?id=32736
Coming Events
- Karynne Courts of ValuesConnection is running one of her renowned Visionary Leadership Programs (VLP) soon for Club Managers Australia (CMA), as always public are welcome.
- Karynne is also running an AVI Accreditation workshop later this year.
For more details on both events, please visit: http://www.minessence.net/courses/events_schedule.aspx
What's New
- So many organizations now depend on the AVI and it's support site MissionControl being available 24/7, that we've set up mirror websites in the UK.
- More articles have been added to our articles page and some broken links have been repaired: http://www.minessence.net/articles/Articles.aspx
- Value Mentors in conjunction the Minessence Group, have developed our first PDF format multi-page group report. Also, we are currently re-working the PC based values alignment report so it can be web-based.