Sisters and brothers of Planet Earth,

We meet here as global citizens, seeking to imbibe a new global consciousness, in all that we think, say or do. We gather to share our experiences, and forge a new leadership ethos. In this noble task, we seek wisdom to shape our vision, momentum to spread the message, and growth in numbers of new corporate adherents.

It helps that we meet in this historic city of Beijing, a land of ancient wisdom, vibrant momentum and impressive growth – a wonderful setting for our quest to align our vision to that of Tashi Kiuchi – the founder of Future500 movement.

New Questions require New Answers

This is not an ordinary meeting. It is not about how to increase corporate profits this year. It is about how you can sustain your profits, tomorrow, and beyond tomorrow.

I wonder if you ever faced this dilemma. “Just when I thought I know all the answers to life’s questions, I find they change the questions.” I also find that the change this time is not cyclic – it is structural. Even the ground realities have changed. What we learnt at school is no longer relevant. What we read in the press is usually one-sided. What we hear from the leaders is generally driven by self-interest groups. What sort of questions are these? Here is a sample:

What is more important – productivity of resources (which are finite, scarce and non-renewable) or productivity of labour (which results in unemployment)?
We condemn religious fundamentalism, but encourage and applaud market fundamentalism, (knowing that the “invisible hand” does not correct the balance; it is busy feeding the rich and the mighty, at the cost of the poor and the helpless).
We promote principles of morality and virtues for individuals – but none for the State and the influential organizations - who manage to flout cardinal rules with impunity.
Global GDP has increased – still the relative poverty also continues to increase.
Why do not we talk of profits with conscience, growth with equity, compatibility with nature, and sharing with the community?

Some of my colleagues here and many others have a view on this. I urge you not to believe what we say. Just join us in this quest and let us help each other discover the new questions and the new answers. The answers cannot simply be researched. The answers have to be experienced by oneself. The best way is to “live” the question, “share” the question, “be concerned” about the question. One day gradually, we may experience the answer.

Five stages in growth of Corporations

Looking back, I discern five stages in the growth of corporations:

(a) Strong Fish eating Weak Fish: For most of the recorded history, all through the agrarian era and early industrial age, this was the law of survival.
(b) Big Fish eating Small Fish: Post World War II spread of technology and capitalism, coupled with free-market economies, led to this phase, lasting till early 1980’s.
(c) Fast Fish eating Slow Fish: Death of Distance, Fall of Berlin Wall and Birth of Internet provided powerful new tools to the agile and the nimble – a phase that lasted till the end of 20th century.
(d) Intelligent Fish eating Dumb Fish: Come 21st century and we witness the dawn of convergence era, when technologies, cultures and people coalesced together to create new amalgams of innovative technologies and a new species of corporate entities.
(e) Realistic Fish eating Unrealistic Fish: This is the new arena for corporate success and survival. Its genesis lies in increased awareness that a corporation has to function in sync with society and the environment. Until now, “caring and sharing” were normally not a part of a boardroom vocabulary – this new mind-set may now become the dividing line between those who “succeed and fail” and others who “succeed and prevail”.

It is laudable that some of the more enlightened corporate leaders have embraced this change. What has brought about this transformation? What is new about the new realism? What characterizes ‘post-modern’ era? Four salient features stand out:

Four Features of Post-modern era

One: Few Entry Barriers: Till recently, monopolies, cartels and super-brands were classic mantras of success. Advent of knowledge economy has changed that. There are virtually few entry barriers in most industries today. While one combats brutal competition from existing players – new ones often walk away with the trophies. The latter tend to flourish, as they are able to imbibe the value-based approach better – since they have no burden of history.

Two: Maximizing Profit no longer the Norm: Traditionally, corporations have followed Milton Friedman’s dictum that maximizing profit is the best way to serve society. The irony is that pursuing that path would henceforth neither lead to sustainable profits, nor serve society’s interests. Corporations should not forget that setting up a public limited company is a privilege the State gives to business, allowing them to keep profits and avoid personal liability. Acting responsibly is the price of that privilege. The Information Society helps to ensure that, by exposing unethical corporate practices.

Three: Rise of Civil Society Movements: Civil Society movements, based on the premise that “another world is possible” – are gathering momentum. There is acceptance that their views on social justice and sustainable development are not aggressive, they just happen to be at dissonance with the interests of entrenched lobbies.

Four: Freedom has limits, it has to be shared: Entrepreneurs often tend to abuse economic power. Swiss Federal Councilor Leuenberger analyzed this well in his address at St Gallen, “You want freedom, that is fine. But you encounter a second angle: my freedom. If you challenge my freedom, you threaten your own. So, you must make a pact with me so that both of us can be free. Paradoxically, you must restrict your freedom in your own interest. If the two of us want freedom, we must also accept a third angle: he she or it.” The third pole could be nature, a person or the State – which would define the borders of our liberty. This acceptance would guarantee liberty for all.

Corporations that acknowledge these contours of the contemporary world will emerge as winners in the 21st century. Business has become a dominant institution in the world today, sometimes even more powerful than the State. As the torch of responsibility is passed on to corporate CEOs, what should we do? What can we do?

Tata Group in India

One of India’s largest industrial conglomerates, Tata Group, embodies these principles in both letter and spirit. Jamsetji Tata, Group’s founder said this over 100 years ago “In a free enterprise, the community is not just another stakeholder in business, but, in fact, is the very purpose of its existence.” Ratan Tata, current Group Chairman echoes the same philosophy, when he says, “The multitude of initiatives the Group has sowed and fostered from its earliest days, in employee relations and good governance, on the environment and with community causes, flows from this well-spring of voluntary, as opposed to obligatory commitment.” The group does so, not to enhance its reputation or to score publicity points, but because it strongly believes so.

Let us not be concerned that we are too small to make a difference. As Mother Teresa said, “We sometimes feel that what we do is just a drop in the ocean, but the ocean would be less because of that missing drop.”

The rationale of Future500 makes it an unusual organization. We don’t expect companies to apply for membership, pay a fee and get enrolled. This is a congregation of companies where the CEO has to ask his inner-self three probing questions:

Is my company fair and just in all its dealings - with all its stakeholders, every time, all the time?
Do we respect the feelings and the needs of the communities and the societies in which we operate, and not generate unfair profits, at their cost?
Are we sensitive to the ecological balance and environmental ethics, and ensure that we err only on the right side?

If CEO’s answer to each of the questions is yes, he is then a part of us. What happens after a company joins us? What do we promise? We promise nothing.

Triple Bottom Line leading to Triple Top Line

Future500 concept has three pillars – profits, social betterment and ecological responsibility. Not one at the cost of others – but all together. In equal measure, with same priority. It is a fascinating journey of thought – as we discover that it is not only possible, but also in our interest, to pursue this triad of objectives – often referred to as the “triple bottom line”.

Those who have embraced this notion usually confide that this leads to a “triple top line” in their personal lives – it gives them joy, peace and satisfaction. Not only for them, but also in the personal lives of all around. They start feeling they are making a difference to the world around, and that is what eventually matters the most.

It is our hope that the leaders of Future500 corporations shall become the transparent lighthouses in the stormy corporate seas of materialism. Hopefully, we shall soon gather critical mass, and become a catalyst to transform our destiny, and make this planet an abode of joy, where each human being is proud to be a citizen of planet earth.

May I conclude with words of Norman Cousins, “The tragedy of life is not death, but what we let inside us die, while we live.”

Copyright: Ravi Chaudhry, Chairman Cemex Consulting Group, India. 2005
ravi.chaudhry@cemexconsulting.com Phone: +91.11.2616 5406