A Blueprint for Better Business (BBB) is seeking to change modern capitalism as we know it by helping businesses to find purpose beyond the obsession with shareholder profits. By David W. Smith
To work in the financial sector in the years following the economic crisis of 2008 was to be automatically dismissed as greedy, selfish and unethical. And those were the politest labels. Many people lumped bankers together as ‘criminals’. But behind the scenes there were conscientious individuals with a passionate desire to win back trust. In 2012, they set out to respond to the anger. The charity they started, the Blueprint for Better Business (BBB), is an advisory group working with 15 major British businesses to date, and many SMEs, to help them find purpose beyond mere financial gain. Although BBB operates quietly in the background, its ambition is nothing less than to change the nature of modern capitalism.
The impetus for BBB began in 2012 when public opinion about bankers reached rock bottom. A survey by Which? revealed 71 per cent of British people thought banks were just as corrupt as before the crisis began. BBB’s founding members all worked in the financial sector, but considered themselves ethical people. They included Loughlin Hickey, formerly of accountancy firm KPMG, Brian Griffiths, vice chairman of Goldman Sachs, and Ben Andradi, who was in private equity.
Feeling they had to look outside business to understand the wider social context in which business operates, they sought advice from religious leaders, philosophers and academics. “They felt the breakdown in trust had gone far enough,” said Blueprint’s CEO Charles Wookey. “It wasn’t just banking. We’d had other business scandals, including the BP Deep Horizon oil disaster and the GSK corruption scandal. Business as a whole was in the dock and the depth of cynicism made it hard for business to do something by itself that wasn’t seen as self-serving.”
At the outset, there was a large Catholic influence. There were discussions with Catholic archbishop Vincent Nichols, about the meaning of work and nature of human personality. And two Catholic sisters, professor Helen Alford and sr Catherine Cowley, both high-powered academics studying business ethics, were at the heart of matters. “There was a Catholic influence, but Blueprint is faith-enabled rather than faith-led. We are independent of all faith traditions and we have an interfaith group that includes Hindu, Muslim, Sikh, Rabbi and Buddhist scholars. We are also independent of governments, regulators and businesses.”
Two fundamental observations guided their quest. The first was that businesses had become obsessed with lining shareholders’ pockets at the expense of social purpose. The second was that too many people believed the lie that human nature was fundamentally self-interested. “The group felt the view that the purpose of business is maximising profits for shareholders was culturally conditioned and had arisen in the 1970s with economist Milton Friedman. Prior to that, leaders had defined purpose in terms of producing excellent goods and meeting social problems. Profit was a consequence of that. This narrow view of people as fundamentally self interested was the starting assumption of many economics textbooks and embedded in the mindset of business. Even if it was not spoken about, it was implicit through ‘psychological bias’ and expressed through structures, processes and behaviours,” says Wookey.
In the financial sector, where worth is judged in purely numerical terms, stressed workers reported living divided lives. “They were asking why am I expected to hang up my values with my coat? When people aren’t able to reference the same moral values they use with friends and families, people live a divided life and there is a loss of discretionary effort. They feel they are being controlled by a very hierarchical system.”
Academic research backed up the philosophical insight that human beings yearn for two things above all – high- quality relationships and meaningful work. “We are more other-centred than we tend to think. Most of us recognise that in ourselves, but research shows we assume other people are more self-centred. It’s a form of cultural myopia,” Wookey says. It took nine months to condense the group’s insights on to one side of A4 paper. BBB then held a conference in September 2012 at which three international business leaders spoke – Unilever CEO Paul Polman, McKinsey MD Dominic Barton, and Vodafone CEO Vittorio Colao. “We debated the framework and, at the end, Paul Polman offered to use Unilever as a test bed for the next stage.”
THE FIVE PRINCIPLES
A steering group was created to formulate a set of principles. The diverse panel included professor Rebecca Henderson from Harvard Business School, Barbara Stocking, who used to run Oxfam, Andrew Miller, then CEO of The Guardian Media Group, and representatives from business, including Unilever. After a year’s debates they distilled the wisdom into five principles. In summary the principles help businesses find “purpose which delivers long-term sustainable performance”, be “honest and fair with customers and suppliers”, be a “good citizen” and a “responsible and responsive employer” and be “a guardian for future generations”. In promoting its principles, BBB had to think carefully about its role. It opted for a purely charitable function offering free advice. However, it stressed it did not sit in judgement. “We decided we wouldn’t become a kite mark as we didn’t want to be used by companies, or become a PR tool. We’re not a compliance body, a judge, or a quasi-regulator, and we don’t put a list of companies who have adopted our blueprint on our website.”
“But we do hope to shift the dialogue and sense of expectations around business. There is a herd mentality as in all areas of life, but nothing is fixed about capitalism. The market always has a cultural form and there is strong potential to move in a different direction and serve people rather than exploit them.”
At times, the wording of the principles is open to interpretation. In the Good Citizen section, businesses are advised to “pay promptly all tax that is properly due”, but what does this mean exactly? “We are dealing with ethical aspects of tax, rather than legal aspects. But we believe when companies address the question of purpose it influences attitudes to tax. If you define your role as maximising shareholder profit, you have a duty to do everything to minimise liabilities, whereas once it becomes a duty to serve society you can argue you should organise your business structures so that you end up paying a fairer share of tax, giving to the Government what belongs to them.”
An article in The Guardian complained that in distilling the wisdom of religion and philosophy into the language of business, some sophistication had been lost. The article suggested companies might be tempted to replace their corporate social responsibility obligations with the five principles and use them as a cover for unethical practices. “We all know CSR can be a displacement activity and disconnected from the rest of the business. In the same week Volkswagen’s emissions’ scandal broke, they were top of the Dow Jones Sustainability Index. But Blueprint is not something bolted on to the rest of the business. We are inviting businesses to completely integrate the way they think about sustainability and social activity into their core business so it’s not an optional extra on Friday afternoons.”
As a charity, BBB offers two-day courses at cost and charges no fee for consultancy work. It doesn’t mind other consultancies employing its framework as long as they conform to the principles themselves. The BBB creates forums to bring CEOs together and convenes round tables to discuss social issues, such as mental health, slavery and human trafficking. To date, BBB is working with 15 of the largest UK-based companies and many smaller ones.
The five principles apply equally to the state sector. The scandal at Stafford Hospital Trust in the late 2000s was an example of how misplacing purpose can have disastrous consequences. Between 400 and 1,200 patients died as a result of poor care over a four-year period. “An investigation suggested the hospital had begun to believe its purpose was to save money and had forgotten it was there to save lives. Again, it all goes back to purpose,” says Wookey.
Find out more: blueprintforbusiness.org
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