Getting Away With It

Once upon a time, an enterprising young businessman bought a large amount of corn and set sail from Alexandria to Rhodes to sell it at a time when corn was particularly expensive in Rhodes due to a shortage brought about by famine. But what if he knew that his wasn’t the only ship on its way to Rhodes, and that just a day behind his ship was a whole fleet of ships with more corn than the people of Rhodes would ever need?

Put your feet in the shoes, or perhaps sandals, of this young businessman. What might you do? Sell the corn at a high price, as the people of Rhodes are desperate? Sell it at a low price, as there’s more corn coming? Or perhaps give it away?

The question is taken from Nassim Nicholas Taleb’s latest book Skin in the Game: Hidden Asymmetries in Daily Life.

Here’s another philosophical gem from Professor Taleb:

“An honest person will never commit criminal acts, but a criminal will readily engage in legal acts.”

It’s a statement that captures the very essence of what is wrong with the way some carry out their business.

Both examples are, of course, about ethics, but what they illustrate to me specifically is the idea of ‘getting away with it’.

Corporate Contradictions

Let’s look at a couple of examples of this in action.

Shell’s website is pretty adamant about its green credentials:

Our core values of honesty, integrity and respect for people – first laid out in the Shell General Business Principles more than 40 years ago – underpin our approach to sustainability. A commitment to contribute to sustainable development was added in 1997. These principles, together with our Code of Conduct, apply to the way we do business and to our conduct with the communities where we operate.

But then let’s compare that to Shell’s CEO comments reported in the Financial Times on 8th December 2020 by writers Anjli Javal and Leslie Hook.

According to the paper:

“Ben van Beurden, Chief Executive, said that oil will continue to be a huge cash generator and the company will expand its gas division. ‘There is going to be a place for our upstream business for many decades to come,’ he told a conference.”

Mr van Beurden has form. A year and a bit earlier, in an article entitled ‘Royal Dutch Shell searches for a purpose beyond oil’, published on 27th September 2019 in the same paper, it was reported that the “single biggest” regret for the Shell boss would be abandoning its oil and gas business prematurely. That, he says starkly, is something Shell “could not live with.”

Here’s another example. This is what McKinsey states on their website:

Our purpose as a firm is to help create positive, enduring change in the world. Our approach to social responsibility includes empowering our people to give back to their communities, operating our firm in ways that are socially responsible and environmentally sustainable, and working with our clients to intentionally address societal challenges.

Now look at what they said back in December 2020 regarding their involvement with Purdue Pharma.

“As we look back at our client service during the opioid crisis, we recognize that we did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid misuse and addiction on millions of families across the country. That is why last year we stopped doing any work on opioid-specific business, anywhere in the world. Our work for Purdue fell short of that standard.”

A couple of examples of companies ‘getting away with it’—saying one thing on their websites but behaving differently when it comes to how they operate.

Where Do You Fit In?

As we decide what kind of future we want to create, I wonder where we all fit in. Professor Taleb’s book establishes that too many people impacting our world don’t have skin in the game. In my book, too many people simply aren’t walking the talk.

Have a look at these four types of business and decide where yours fits.

1. Emperors

These businesses have jumped on the purpose bandwagon. They are not driven to make a difference but are okay talking about it. Their modus operandi is to make declarations and cite meaningless values to support claims of social purpose that aren’t backed up by actions.

2. Champions

These businesses are proactively walking the talk. Doing good is at the core of their business strategy. The structure, plans, actions, and decisions they make are all guided by a Single Organizing Idea (SOI®) against which progress is continually measured, shared, and celebrated.

3. Squatters

These traditional businesses don’t pretend to have a social purpose. Maximization of profit for the satisfaction of their owners or shareholders is their primary goal.

4. Box Tickers

These businesses aim to do just enough by cherry-picking ‘do-good’ projects, tweaking their governance, making ad-hoc contributions, and meeting obligations set by external watchdogs when told to do so.

If you’re anything other than a Champion, it may be time to take a long, hard look in the mirror and ask what sort of business you’re building—and, just as importantly, what sort of society and planet you’re creating.

Time for Change?

If you’re prepared to change, take a look at my new book, the CORE Playbook.

It’s aimed at the millions of business leaders who see what’s happening now and are ready to plot a course that goes far beyond ‘getting away with it.’

Containing over 40 diagrams and detailed step-by-step explanations, the CORE Playbook is the most comprehensive resource available for those who understand that businesses have to change if they are to meet the challenges of the next decade and beyond.

The world needs more Champions. If that sounds like you, we would love to hear from you.

This is the story of how Martin Beyer helped change the direction and purpose of one of Norway’s largest supermarket chains. I met Martin when I was promoting my book CORE with Pure Consulting in Oslo last month.

Quite simply – while working in the supermarket’s bakery department – Martin couldn’t help noticing that every day a lot of not-quite-fresh food, such as loaves of bread, buns and Danish pastries, was thrown away.

This bothered Martin quite a lot. Not just the environmental or even the social implications – but the sheer financial cost of it. It was a bit like throwing money away. Martin discussed it with his colleagues and they agreed. Surely there was a way to be less wasteful?

Heroes and villains

It’s at this point that I’m tempted to compare Martin to ‘Saint Paul’ – aka Paul Polman – who is something of a hero, not just of mine, but of many of us camping within the big sustainability tent.

Polman – as CEO of Unilever – met initial opposition when he tried to persuade Unilever’s board and shareholders that their huge organization could only sustain long-term growth by reducing its environmental footprint while improving its social impact. “The more our products meet social needs and help people live sustainably,” he argued, “the more popular our brands become and the more we will grow.”

Martin Beyer instinctively held the same conviction. To him, selling the not-so-fresh baked goods at a reduced price would meet a social need. Meanwhile throwing away perfectly edible food was a poor use of the planet’s resources, and bad for profits.

Yet when Martin tried to argue his case he ran into obdurate opposition from the supermarket’s management team who continually regurgitated the same old arguments:

1. That selling cheap, older food would cut into the sales of fresh, more expensive food; and therefore the supermarket would lose money.
2. That theirs was a high-end supermarket whose brand would be damaged by the sale of sub-standard products. That definitely wasn’t the purpose of their business.

Getting past the philosophy

Eventually, and with the same courage Paul Polman has exhibited, Martin made his breakthrough by getting the management to set aside the philosophical arguments around the purpose of the business and focus instead on the cold hard cash.

He established that Argument 1 wasn’t actually based on facts, but on untested assumptions. Maybe, just maybe, they could run a trial? Head office finally gave in. And after a three-month test the results were clear:

• The customers who bought fresh food weren’t interested in buying cheaper, less fresh food but they liked the concept and said nice things about it. Sales from this segment didn’t decline.
• Meanwhile a new, more price-oriented customer segment was attracted into the supermarket. They bought the cheaper goods, and while they were there, also, naturally, bought other things. Far from diminishing the brand, the customer base grew, as did sales and profits.

Big oak trees from small acorns grow. The idea of discounting rather than dumping less-fresh products was adopted across the whole supermarket chain. Moreover, the practice of special displays and discounts for about-to-expire products is growing both in Norway and other countries. Similar initiatives are popping up everywhere with increasing frequency.

But here’s my point.

Martin’s organization had a purpose – and a good one at that: to serve its customers and look after its suppliers and shareholders. But funnily enough, for a long time this laudable purpose got in the way of doing a good thing. It actually took eight years for Martin and his colleagues to change the system.

I would argue that if only his organization had had a Single Organizing Idea (SOI®) it would not have taken nearly so long. Because the genius of an SOI is that it mobilises an organization’s purpose. An SOI takes ‘purpose’ and turns ideals into realities straight away. Which is what organizations need if they’re to get on with making the changes that are now urgently required.

In conclusion, thank you to Martin for sharing his story.

Martin Beyer starts a new job soon for the Municipality of Drammen as a Digitization Advisor. Once there he expects to help “change the organization (4.500 employees serving over 60.000 people) to work in new and smarter ways to make the public sector smarter, efficient and better.” I’m sure he will.

Neil Gaught is a strategic advisor and author of CORE: How a Single Organizing Idea can Change Business for Good published by Routledge.