I
n 1970 the economist and Nobel laureate
Milton Friedman called corporate
social responsibility “hypocritical window
dressing,” saying that businesspeople
inclined toward it “reveal a suicidal impulse.”
How times have changed. Some
executives still take a Friedmanesque view,
but most accept social and civic responsibilities
as indispensable to doing good
business; their enterprises won’t survive if
those responsibilities are ignored.
Keep in mind that capitalism needs
a brain and a soul. Solving today’s burning
issues—social, environmental, political,
and financial—requires bigger goals, new
incentives, and a reconception of what
business really is. It also requires leaders
with moral muscle who are willing to pursue
sustainable goodness and positive impact
despite colossal challenges. Starbucks
CEO Howard Schultz and Unilever CEO Paul
Polman are champions in this movement:
Their long-term missions and pursuits are
models for building companies to last.
Invest in people above all. A company’s
most important assets—mission, reputation,
and people—are not on the balance
sheet. Schultz is deeply invested not only
in Starbucks’s 200,000 partners (employees)
but also in its global coffee bean farmers.
Whether offering stock options and
health coverage to part-time U.S. workers,
hosting “family partner forums” for employees’
parents in Beijing and Shanghai, or
donating cows to coffee farmers in Rwanda,
he sees enlightened decision making as
smart business: Health benefits and parent
engagement build trust among employees;
cows for coffee farmers strengthen loyalty
and productivity. “To be a benevolent organization,
you have to make a lot of profit,”
he told Fortune in 2011. “But if your sole
goal is to maximize profit, you’re on a collision
course with time.”
Live the adage “From those to whom
much is given, much is required.” Starbucks
and Unilever may have a resource
advantage, but they use their brand, visibility,
and scale to blend capitalism with
activism to influence change. Polman tackles
global malnutrition; Schultz addresses
other big-picture issues such as job creation
and political disunion. And people
respond. When Schultz called on major
corporations to halt all political campaign
contributions until the U.S. government
solved the budget deficit, nearly 200 top
executives of major companies signed on.
He’s resolute: “Business leaders cannot be
bystanders.”
Fail and keep learning. While other
CEOs talk about change, Polman is grafting
measurable sustainability onto Unilever’s
DNA. His goals are ambitious: reduce the
greenhouse gas impact of Unilever products
by 50%; source 100% of raw materials
sustainably; help one billion people improve
hygiene. Such transformation is not
without risks: If successful, Polman will be
a role model; but if Unilever falters, critics
will call for his head. He understands that
to address social issues, business must experiment
and innovate.
Schultz and Polman represent a growing
corps of 21st-century leaders who are
demanding bigger, bolder things of business—not
primarily as a moral obligation
(although that’s very important) but as an
imperative for enduring organizational
success. In the next decade we’ll see
others forge their own models, just as
we’ll see the decline of companies that
cannot summon the moral courage demanded
by principled leadership.
Unilever’s goal is to “stay close to society
to guarantee our future.” Polman says that
what he’s doing is “nothing special.” But if
his and Schultz’s actions motivate others to
follow, the impact will be extraordinary