L-R: John Helliwell, fellow, Canadian Institute for Advanced Research, UBC; Frank S. Borowicz, QC, Board of Trade governor; Daniel F. Muzyka , Board of Trade governor and dean of the Sauder School of Business, UBC; Darcy Rezac, managing director and chief engagement officer, The Vancouver Board of Trade, and chief executive, Rix Center; Ali Dastmalchian, dean of the Faculty of Business, University of Victoria. All contributed to the concept of the Rix Center with Don Rix. Photo: T. Hadley
By Darcy Rezac, Daniel F. Muzkya & Ali Dasmalchian
Sounding Board, March/April 2009
Corporate management wisdom – particularly in challenging economic times – can sometimes be more science and less heart. Driven by the quarterly demands of Wall Street, financial considerations often take precedence in shaping corporate governance standards and business practices.
Yes, corporate profit is fundamental and necessary for success in business, but by itself it is not sufficient for the enterprise to be successful or sustainable. Employees, customers and neighbours expect and generally accept the imperative of making satisfactory returns for shareholders. But today, they expect more. They expect the enterprise to have a purpose beyond profit. They expect the corporation to focus on customers and be positively engaged in the community. This means being a good corporate citizen, contributing to the greater good.
The common boardroom refrain from the last century, “The shareholder is king!” is increasingly giving way to a new ethos of corporate citizenship that recognizes the importance of positive engagement with a number of important stakeholders in order to guarantee sustained returns for shareholders. These days, particularly with the wired and wireless power of the Internet, customers, employees, the community, government, media and the planet all have an interest in our business. This is true, whether we like it or not.
Corporations that engage the hearts and minds of individuals, inside and outside the business, are in it for the long haul. They know that success as a sustainable enterprise is enhanced. In fact, it depends on it. This is what engaged leadership is all about. While it focuses, quite properly, inside the enterprise and the work tasks at hand, engaged leadership does not stop there. It not only helps to bolster employees’ commitment to and involvement in their work, it also facilitates their connection to others in the community. Done well, the product is: Employee, enterprise and community well-being – a powerful recipe for sustainable success.
Daniel Goleman, author of Social Intelligence, and Robert Putnam, who wrote the book Bowling Alone, cite research that documents the positive impact of social connectedness. People who are positively engaged with others generally live longer, have better mental and physical health, and report higher levels of happiness and well-being. The University of British Columbia’s John Helliwell, a leading scholar on the science of well-being, reports that those who connect and bridge to the broader community can achieve a sense of purpose, which is both energizing and uplifting. This encourages higher trust and engagement, and greater satisfaction with life. It turns out that a children’s song made famous by Raffi, “The more we get together, the happier we’ll be,” is true. In fact, at his talks on the new science of well-being and happiness, Helliwell gets his audiences to sing along!
How does the corporation benefit from this? Firstly, studies show that positively engaged employees have higher productivity and lower rates of absenteeism. According to a recent study from Imagine Canada!, Manulife, for example, reports employee retention is three times higher when employees are engaged in the community.
Nineteenth-century French philosopher Alexis de Tocqueville called citizenship, “self-interest, rightly understood.” Its hallmark characteristics include: trust, purpose, mutual and generalized reciprocity, community-mindedness, connectedness, leadership, social capital, passion, empathy, ethics, and responsibility. It is how libraries get built, crime goes down, community investments happen, and prosperity is created and distributed. It is how businesses and communities succeed and are sustained, together.
As individuals and organizations, we need to realize more than the narrow economic success counted in this quarter’s earnings reports. For success to be sustainable, strong social groups are required within our companies and between our companies and the societies in which we live. The irony is that financial success is possible in the short-run through a singular focus on economic variables; but long-run corporate success is the result of engaging people broadly, both inside the business and out, emotionally and socially as well as economically.
Corporate citizenship is about engaged leadership. And engaged leadership can be viewed as a matrix which operates in three dimensions; leadership (the skills to get things done through others), connectorship (positive networking and social intelligence skills to connect with others) combined with a network with depth, breadth and reach.
Success in life and business depends on the interconnectedness of financial and human capital. A successful enterprise must have the capacity to lead and connect with a host of networks, both internally and externally to create value. It is the value that flows from positively engaged leadership that will define success as a sustainable business enterprise, and for the community in which it operates.
Copyright 1999-2009 The Vancouver Board of Trade.
