Some people have a knack for anticipating big changes. Patricia Aburdene is one of those people. The co-author of Megatrends, Re-Inventing the Corporation and Megatrends 2000, she successfully predicted the information economy in the early 80s and today’s networked, technocentric business environment in 1990. Her latest work, the newly released Megatrends 2010, predicts a change of a different sort: a rethinking of the role corporations play in society. According to her, this is particularly true of consumers as they increasingly demand that businesses treat their various stakeholders fairly and make a positive contribution to the communities in which they operate.
Aburdene cites a rise in values-driven consumerism and a greater emphasis on corporate social responsibility in business as evidence that the corporate world is about to undergo a profound transformation. She terms this trend towards a more socially responsible business environment “The Rise of Conscious Capitalism.” In other words a capitalism in which businesses are no longer accepted as amoral profit generators, but are seen as responsible to a wide range of stakeholders: employees, suppliers, consumers and communities.
A 2005 Golin Harris survey lends credence to Aburdene’s predictions. It found that corporate citizenship already has an influence on consumer habits and can even turn some customers into brand champions. A full 40 percent of respondents said they take good corporate citizenship into account when making purchasing decisions.
Interestingly, the study found consumers were most concerned with how an organization treated its employees. Respondents identified 12 key factors that determine a company’s performance as a good corporate citizen, and the vast majority (85 percent) considered how a company treats its employees as the No. 1 factor.
Aburdene is hardly the first person to notice this transformation. Business for Social Responsibility reported the following in 2003: “An increasing number of consumers are taking a company’s corporate social responsibility reputation – including workplace issues – into account when making purchasing decisions. Some consumers are making their viewpoints known through boycotts and other efforts aimed at what they perceive to be a company’s exploitation or abuse of its employees or those of its contractors.”
But it is not only consumers who are demanding businesses clean up their workplaces. Employees are voting with their effort, engagement and cooperation. In 2003, Harvard Business School professor Lynn Sharp Paine published Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance, which details the myriad ways in which ethical practices positively impact a company’s bottom line.
Much of her “ethics pays” argument revolves around issues of workplace effectiveness and productivity. She found that the more ethical companies have higher levels of employee morale and do a better job of sharing knowledge. This is by no means surprising; employees are more willing to expend discretionary effort for a company they believe in and trust to treat them fairly. In short, companies that behave ethically and treat their employees well function better. They are simply more effective and profitable.
Many companies have recognized this shift, particularly among their younger workers. For example, in recent years, more and more organizations have begun providing employees with paid time off to volunteer. This was abundantly evident in the aftermath of Hurricane Katrina, during which companies provided an impressive level of support to the relief efforts in the Gulf. According to an online poll by SHRM, 8 percent of employers polled gave workers paid time off to assist in the relief effort.
If Aburdene’s forecast is correct, and the evidence suggests that it is, this emerging environment is particularly well suited to the progressive organizations we’ve profiled in our Success Stories and the leaders we’ve honored with our Best Bosses recognition program. These organizations will not only benefit from better-run, more efficient operations, they will have a decided advantage over their competitors in the marketplace. Increasingly, there is little difference between doing good and doing well in the business world.