17 Feb Empathy in Australia: An ambitious conversation for business
An important conversation is happening next week lead by cultural thinker, Roman Krznaric, who will be hosting a panel of inspiring identities including acclaimed QC and Sydney Peace Prize winner Julian Burnside, best selling author Tara Moss, influential leader Dr Susan Carland, award winning sportsman Chris Judd and distinguished artist Deborah Cheetham talking about empathy in Australia.
Here’s where we can also get more insightful about the power of empathy and the way it works to transform corporate culture.
Top business strategist, Dev Patnaik in his book Wired to Care describes the human brain as an apple. His analogy is quite simple — at its center is a hard core — responsible for all the “reptilian” functions which ensure our biological survival — hunger, our sex drive, and even contains the most primitive of all emotions: fear. On the outer core is the neocortex, responsible for our so called higher-level thinking. In mammals like mice, this part is thin but humans it’s up to 80% grey matter, which is what makes us smart.
In between these two regions is the limbic system, which Patnaik describes as the “sweetest part of the apple” which draws together all the parts of the brain to handle emotional information. It’s what is responsible for our capacity for empathy allowing us to communicate and sense emotional cues, which are fundamental to what makes us social and caring. It’s in fact triggered by face to face interaction.
In corporate structures, Patnaik describes how companies are like corporate iguanas, “ethically neutral beasts, focused on self-preservation.” In other words, they can act and think, but can’t feel. Is it any wonder that the legal personhood of a corporation has a mind (directors) and a body (shareholders) but no soul/emotion? In fact, their sole social responsibility in the US at least according to economist Milton Friedman is to maximize profit for its owners (feed the body).
Our entire global economy has been shaped around this single form of human organization. Every single business person is taught to create the conditions of survival of the fittest for the corporate structure with the single measure of progress being financial data. As Patnaik states, when we turn up for work we leave half our brains at the door and we chime into the mantra – “nothing personal, it’s just business.” For many of us, this means we’re existing day to day in a man made structure, which denies a fundamental part of our nature as human beings. No wonder it’s confusing.
In this age of hyperconnectivity, we’re seeing now that business is becoming very personal. We’re seeing the people behind the corporate veil. We’re seeing the CEO as a person through blogs, social media. We’re seeing the very real people who make the products we buy. And in turn we’re seeing the power of the collective and openly heard consumer voice affecting the bottom-line.
The fact is corporations are now a pervasive part of our lives. Today, 59% out of the world’s 150 most powerful economic entities are corporations, not countries. Corporations create the conditions for survival for many.
Craig Davis, former Global CCO of J Walter Thompson sums it up:
“Companies are massively powerful, many of them have more economic muscle than entire countries and exercise massive influence on the world. With that comes a great responsibility to look into the impacts that they are having on communities, cultures and the physical environment. Good, sustainable businesses need to have an eye across all these impacts and be comfortable with the lens of transparency and accountability that technology brings to their stakeholders. Everything’s on the record and there’s nowhere to hide. Comfortable or not, companies have to put themselves in other people’s shoes.”
Is it any wonder, that with the level of corporate transparency that trends such as citizen journalism have demanded in recent times, these powerful structures which govern our lives are now discovering the “limbic” parts of themselves? This is especially the case when companies have the ugly side of their operations brought to light. The challenge for any CEO now more than ever is to ensure that any potential fall out is managed with integrity, authenticity, and preferably a human face.
In engaging with consumers, emotionally and socially directly via social media channels, today’s companies are learning to expect a very human response to their actions. Thalidomide manufacturer Grunenthal’s CEO, Harald Stock, experienced this first-hand. His late apology to mothers of children deformed by the drug Thalodmide after 50 years, was explained as some kind of delayed “silent shock.” Mothers’ reactions to Stock’s “silent shock” excuse was understandably charged. To them, silent shock is when your child is born without limbs, from an unsafe drug, and an apology 50 years too late. Nevertheless, the fact is that Stock was prepared put a human face to claim corporate responsibility. Some would say a step in the right direction, albeit awkwardly.
ENLIGHTENED CORPORATE EMPATHY?
How far does corporate empathy have to go? For corporations to navigate the new forms of social responsibility demanded of them by consumers, regulators, even shareholders, “corporate empathy” must this now expand to include the entire supply chain? From employees on the shop floor, to the upper echelons of management, right through to the workers in the factory making the devices? Ostensibly, it can be argued outsourcing does not mean outsourcing responsibility, nor reserving empathy for the sales team to be applied solely as means of sales conversion.
This is a key issue we investigated with conscious business leaders; Intrepid Travel CEO and conscious capitalism ambassador Geoff Manchester, Carolyn Tate, Slow School of Business Founder; Tom Quinn, Director Future Business Council and Clearpoint Founder Joel Cranshaw in the recent panel discussion entitled: The Evolution of Business at Pausefest 2016.
We wanted to understand if it is indeed possible to have “enlightened corporate empathy” in a globally interconnected world. The next obvious question is how far down the supply chain does corporate empathy extend? The so-called “conflict minerals” for example, which create the electronic gadgets we love have an equally dramatic story of their own. Conflict minerals are those raw materials which are sourced from countries with extremely poor human rights records such as the Democratic Republic of Congo. Although many electronics companies have refused to accept conflict minerals in their manufacturing process, many are also not troubled by the difficulty in identifying which source materials with questionable origins. After all, most consumers are not aware of the story surrounding conflict minerals – so why should the companies care?
Ultimately, this example highlights the inequalities in a complex global economic system – where desperation of failed states such as the Congo, seeking investment in their regions can find themselves aligning with market interests of the more unscrupulous players. This puts more ethical companies advocating for change at a competitive disadvantage. The casualties are sadly the human players at the very bottom of the chain, whose suffering inadvertently underpins the entire global economy.
Perhaps for an “enlightened corporate empathy” to operate at this global scale, there is not just a need for authenticity, but also corporate courage. Big business and governments have to be brave enough to create conditions for a fairer, more sustainable global system, which places human as well as economic well-being at the centre. There are signs of this happening.
Thankyou Group Managing Director and co-founder Daniel Flynn is a shining example. His ‘thankyou’ movement – products sold fund projects on the ground in developing countries for every one sold — has proven to be profitable whilst also improving the lives of many in the developing world. It’s also given the company generous amounts of social capital. One feeding the other.
SHIFT THE CORPORATE FORM
Yet others advocate that “good business” simply isn’t enough and that we need to fundamentally alter the corporate structure itself to embrace this shift in values. If we continue to make ‘bottom line’ the entire measure of corporate empathy, no matter how much we dress up our corporate culture with feel good language, the outcomes will always remain the same.
“Benefit Corporations” (also known as “B Corps“) however, are a new type of corporation, which use the power of business to solve social and environmental problems. B-Corps are very different from a standard companies. They are required to have a corporate purpose to create a material positive impact on society and the environment. They also have an expanded fiduciary duty to require consideration of the interests of workers, community and the environment in their decisions. Finally, they must publicly report annually on overall social and environmental performance against a comprehensive, credible, independent, and transparent third party standard. Could the B corp be sowing the seeds of genuine empathy within the DNA of the corporate structure?
We created the systems, the cultures and the conditions of corporate structures, and we are ultimately responsible for their evolution as individual entities. The success of the B-Corp is a step in the right direction. The challenge of our time is to create “enlightened corporate empathy”. Our survival as a human species may even depend on our ability to thrive as a global tribe.
For now, it starts with a small step called authentic corporate empathy. And perhaps a few good apples can make it happen.
By Anna Reeves, Media Consultant, B Ready Program Director, Filmmaker
JOIN THE CONVERSATION
Empathy In Australia: Wednesday 24 February, 6.30PM
Would you like come we have x2 Free Tickets to give away. Tweet your answer to why empathy, why now? using the following: #empathyinaustralia @CPCounsel