I have spoken at a few conferences lately where I’ve noticed entrepreneurs focus completely on the ‘social good’ of their business, as opposed to the ‘old school’ factor of making money.
Now… I’m going to start this piece with a huge caveat. I am a huge advocate for social-enterprise, charity, philanthropy and spend around half my time on those pursuits but that simply wouldn’t have been possible without the successes I’ve had in the ‘for profit’ world which have given me the flexibility and freedom to do that.
Your real corporate social responsibility
I recently had a conversation with Jack Welch, who is one of the world’s most successful CEO’s and someone who I regard as a key business thinker. I asked Jack what his views were on corporate social responsibility, his response? “Your corporate’s social responsibility is to win.”
“After the recession, in the late ‘70s,” Jack explained “I was going around in the early ‘80s with my tin-cup to various companies raising money for United Way, a charitable organisation here in the US. I was the corporate fundraiser for the New York region, and too many company CEOs said, sorry, not this year… things are really tough. You cannot be generous from an empty wagon! This nonsense about giving when you’re broke is ridiculous. When we were winning, our company had over 40,000 mentors, going out in the community mentoring high school students and inner-city kids all over the world. Companies that were losing that couldn’t afford it, had no such efforts… Corporate responsibility, first and foremost, is to win. You can then take those resources from winning and allocate them as you see fit. That’s not a popular statement, but it’s the truth! As you get more and more profitable, you can do more. We were able to give people tonnes of time off to mentor, we were the largest donors inmost every city we operated in. Why? We were winning.”
The unpopular truth
There’s no doubt that young entrepreneurs coming into today’s world are very socially minded, it’s hard not to be when the internet and our media constantly show us- often graphically- the challenges our society faces.
The unpopular truth however is that unless we build successful enterprises that generate wealth? We’re going to struggle to have the lever (cash) with which to make the change you want to see in the world. As one significant philanthropist told me, “it’s fine to want to give it all away, but you have to make it first, and that’s the bit a lot of people seem to miss today…” Even impact investors know this. I was speaking to the CEO of an impact investment fund recently who was quite clear saying that even social businesses need to generate cash-flow, returns and have the same ambition and commercial focus as any other business.
Every successful business I’ve ever come across has been based on a passion; that might be the passion for a particular technology, for a particular market or product, or even a particular interest or skill. The separator of the ‘businesses’ from the ‘successful businesses’ however was their ability to keep that passion, and turn it into something that generated wealth and returns.
The key take-away is to delve deep into what what the passion is that brought you to be an entrepreneur or a leader in the first place, and then figure out how that passion can turn into a sustainable enterprise. Even the world’s largest social-enterprises and charities have to have this commercial mind-set to operate and succeed in a highly competitive environment. This exercise of discovery is often one of the first things I’ll work-on with a CEO I’m coaching, as the results can be profound.
Leading with Purpose
As a business-leader, the passion that created the spark that ignited your career is something you imbue into your entire company culture. The classic case-study of this? Apple! The essence of Steve Jobs’ vision for technology echoes through the actions of every single person in that organisation, even posthumously. This is no accident…
“establishing a culture of truth and trust is absolutely critical to being a great leader,” Jack told me, “and that takes effort and energy every day. You have to ceaselessly reach for truth and trust every day, and you have to be relentless in your pursuit of trust, and show your people that you have their back. That doesn’t mean you are weak, it means you have their back.” He continued, “you have to get under the skin of every employee, becoming a chief meaning officer, giving your team purpose, getting everyone on the same page. You have to make sure your entire team knows where they’re going, how they’re going to get there, and what’s in it for them.”
Jack Welch is someone who’s not a stranger to success – he turned a ‘start-up’ inside GE into a global operation with tens of thousands of employees, and during his tenure, turned GE into a real economic powerhouse. I asked Jack what the key take-away was from his journey making this happen.
“You must surround yourself with great people,” Jack told me, “and as you grow, never forget the generosity gene. You must demonstrate that gene with encouragement, praise, recognition, and cash… Building a great team is what this business game is all about. The team with the best players working together wins.” He continued, “This great team will drive growth, and growth is like an elixir. It’s exciting, it creates more and more growth, and it’s a helluva lot of fun. Business is fun, it’s a game. You’re playing against others, and you want to win!”
And ultimately, that’s what it comes down to. As jack told me, “Winning is good, losing is bad! Do you want to be in the winner’s locker room celebrating or in the losers with your head down and a towel around your neck? If you’re winning, you can give back — to your family, institutions of your choice, and your local communities… If you’re losing, your pockets are empty.