Business and its critics often end up talking past each other. That’s one of the reasons Leaders’ Quest was founded 13 years ago – to bridge the gap between leaders in different sectors.
Jon Miller and Lucy Parker’s brilliant new book Everybody’s Business is another important attempt to bridge that gap. They tackle the cynicism that often surrounds the role of business in the world head on, arguing that the corporate sphere is part of the solution, not the problem.
They present a series of stories about how some of the most recognisable brands in the world – from Coca-Cola and Nike to GSK and Rolls-Royce – are working to combine profit with positive social and environmental impact.
These stories all share a number of themes.
The book starts with a classic example of what at Leaders’ Quest (borrowing from the eminent INSEAD professor Subi Rangan) we would call ‘Business 3.0’.
Coca-Cola’s ‘Project Nurture’ works with 50,000 smallholder farmers in Kenya and Uganda, who provide fruit for Coke’s growing juice business (Minute Maid is its most famous brand in this area). The project helps create sustainable livelihoods for the farming communities, by improving their productivity and offering a reliable market for their produce.
But it also solves a pressing business challenge for Coke: with more consumers seeking healthier lifestyles, sales of its world-famous sugary soda drinks have been in decline since 2005. In response to this, Coke aims to triple the size of its juice business by 2020. To do so, it needs a reliable supply of good quality fruit, which is where ‘Project Nurture’ comes in.
This is not a book about corporate philanthropy. It’s about businesses having a positive social and environmental impact by acting as businesses. And it’s about how they respond to rapidly changing circumstances to ensure their own long-term survival and growth.
As Unilever’s Chief Marketing Officer and Head of Sustainability, Keith Weed, puts it:
“Some people challenge what we’re doing. Some say, ‘What’s the business case for sustainability?’ I’d love to see the business case for the alternative.”
In many instances, the companies that Jon and Lucy write about have a degree of influence in billions of people’s daily lives that most governments and NGOs could only dream of. Seeing big business as a vehicle for driving positive change solves the problem of how to deliver solutions at scale.
But, none of these businesses are changing the world on their own. To deliver ‘Project Nurture’ Coca-Cola is working with an NGO called TechnoServe. Training 50,000 farmers in basic business skills and agricultural techniques doesn’t exactly play to Coke’s strengths. But that’s where TechnoServe comes in. It’s a highly effective intermediary between the farmers and the global corporation, providing tremendous value to both.
Similarly, the global pharma giant GSK is working with NGO partners to help deliver improved access to vital medicines for millions of people in the developing world. In 2009 CEO Andrew Witty announced a cap on the price of GSK’s patented medicines in developing countries at 25% of the developed world price. This was widely applauded as a bold move in the right direction. But it was only the first step.
It soon became apparent that this reduced price wasn’t always being passed on to the end-user who needed it most. So the team at GSK realised that they needed to look much more closely at the supply chains that carried their drugs from the production line to the pharmacy shelf. Above all, this meant working with NGOs on the frontline of delivering healthcare for those most in need. So partnerships were forged with the likes of Save the Children, AMREF, CARE International and One Family Health.
Duncan Learmouth (a Leaders’ Quest alumnus) heads up GSK’s developing markets unit. In the book he explains the rationale behind these cross-sector partnerships like this:
“What NGOs bring is an insight into the base of the pyramid, the marginalised populations; what their needs are and how to get to them. That’s an understanding we just don’t have in the business… The thing big business brings to the party is a kind of rigour; the power of incentives and the capability to operationalise in a disciplined way.”
And it’s not just more collaboration between businesses and NGOs that is driving positive change. GSK’s decision to open up its intellectual property to academia and companies it would once have viewed simply as competitors has been another key breakthrough. A more open and collaborative approach to innovation is generating true shared value for the company and for society.
What makes the GSK story so compelling is how far the company has come on its journey. Just over a decade ago, GSK was at the centre of one of the most damaging scandals in corporate history. At the height of the African HIV/AIDS epidemic, GSK, along with much of the rest of the pharma industry, decided to sue Nelson Mandela’s South African government. The reason: unable to afford the anti-retrovirals developed by GSK and co, South Africa had started making its own generic versions of the drugs. This struck at the core of the pharma companies’ business model, which revolved around developing and then protecting their intellectual property.
Unsurprisingly the law suit was a public relations disaster. But it was the wake-up call GSK needed and has been a driving force behind the company’s efforts to transform their business model ever since.
It’s stories like these that make the book so optimistic and uplifting. Fundamentally it’s a challenge to everyone – both inside and outside business – to never give up hope.
Often, at the outset, transforming the business model can seem too hard and the more comfortable option for those on the inside is to stick their heads in the sand. Meanwhile, for the activists on the outside, it’s often easier to criticise than to get your hands (and sometimes your reputation) dirty by engaging openly with corporates.
But Jon and Lucy have amassed an inspiring array of stories of companies who have chosen to take the harder path. Stories of leaders who have stood on the brink of the unknown and said ‘let’s go forward’.
Unilever’s Keith Weed sums up the case for hopefulness in the face of uncertainty better than most:
“Three years ago it was impossible to source 3 per cent of the world’s palm oil sustainably. Absolutely impossible… Last year we did it – several years ahead of plan. But that’s what business is about – setting an objective, setting off on a path, learning along the way and adjusting the business to hit the target.”