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3 Things the Business Roundtable Signatories Can Do Today

Kathleen Miller Perkins November 12, 2019

Count me among those who want to see some immediate action to back up the Business Roundtable’s remarkable announcement on revising their mission.  A short time ago, they issued an open letter stating they are committed to operate for the benefit of all stakeholders, not just shareholders, to enable long-term success. This is not earth-shattering news, despite almost every major news publication and then some writing about it!

Many of us capitalists outside of the Business Roundtable have been operating on this premise for years. And of course we care about our financial success. My company’s 30+ years longevity is evidence! We can have it both ways, make money while also operating as a force for good, when our company cultures support our visions.

If you are a signatory of the Business Roundtable open letter, you can take steps to ensure that your company’s culture positions you to act on your commitments. Based on our many years of research and practical experience in creating these cultures, we offer three steps you can take today.

Step 1: Check on how your employees view you — really!

One of our large, global clients asked us to assist them in determining whether their culture was helping or hindering their very purpose-driven sustainability strategy. They assured us that everyone throughout their company understood top-level leaders’ commitments to sustainability. They asked us to focus on other aspects of the culture. I remember vividly their shock when our assessment revealed employees’ skepticism about the sincerity of their commitments. Employees believed the leaders’ words were empty because their behaviors were not aligned. Consider this comment:

“There is a difference between presenting a clear vision to someone at my level and actually having a clear vision that drives decisions. I know that our leaders talk about their long-term sustainability goals. But I haven’t seen them ever pass up a short-term profit because of their so-called commitments.”

Clearly, employees did not view their leaders as trustworthy. Whether they deserved this reputation is beside the point.

The only way that you as a leader can build a strong culture is to demonstrate your own personal commitments to your stated values and goals. Do not take your assumptions about employees’ perceptions for granted. Seek out objective evidence without delay. While you are at it, ask what your employees would expect to see to be convinced that your words and commitments are sincere.

Remember, your employees are very significant stakeholders and can influence other stakeholders, as well. How employees talk about their company to outsiders is a powerful determinant of a company’s reputation. While people may not always believe what they read in a company’s press releases, they do believe what they hear from the company’s employees.

Step 2: Assess your culture by examining your stories.

Before you chart a course for the culture you need, take stock of the culture you have. Start by asking some simple questions.

First, recall a story about your company that people tell repeatedly over time and across the organization. For example, a client tells the story of how their people responded to the 9/11 crisis and to Hurricane Sandy. They describe how they worked seamlessly together across boundaries. The company considers those who worked tirelessly at great personal sacrifice as heroes. What do these stories tell you about their culture?

Take stock of whether your company’s stories and heroes reflect the culture you need to support your commitments to your stakeholders. Then develop the stories you would like to hear. This is a simple way to envision how to transform your words into behaviors.

Step 3: Clarify how you expect your company values (either old or new) to show up in day-to-day work and decisions.

So often we hear from our client company stakeholders, especially employees, that company values are meaningless because no one really knows how to act on them. Words we use to describe values are often ambiguous. Of course people are likely to disagree about how to interpret them.

So what is the answer? Set behavioral standards. Clearly describe behaviors that you will exhibit and that you expect to see throughout the company as a reflection of the values.

For example, if a stated value is to care for the welfare of your employees, describe how you will hold yourself and your other managers and leaders accountable for doing so.

Our client brought this value to life in his janitorial service organization. The company sponsors and subsidizes a farmers’ market on the company property. In addition to providing healthy fresh food at a nominal cost, the farmers and the company educate employees on cooking and nutrition. More significantly, they raised employees’ wages. And they continue to work within the industry to find a way to increase wages even more.

The Business Roundtable’s revision of its stated mission has excited many of us who have been following this path for years. And we are eager to see what they do next to act on their words. The commitment will require leaders to take concrete actions and to persevere over the long haul. Nevertheless, leaders can get started today by preparing their cultures for the journey.

Equity and Inclusion / Stakeholder Capitalism
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