Governments around the world are hitting the reset button on economies and societies. What we do during the pause created by economic ‘hibernation’, and the direction we choose to face when we re-emerge will determine whether we head back out onto the path of self-destruction, or take this unprecedented opportunity to re-imagine the way we show up in the world. Collectively, we must take this time to think.
In the business world, social responsibility is the ethical imperative to make decisions and act in ways that have a positive impact on society. This construct is distinguished from social responsiveness, an organisation’s capacity to adapt to social norms and values and make practical, financially oriented decisions about whether or not to adapt to changes in society. Managers regularly face decisions that require a consideration of social responsibility, in pricing products and services, product quality and safety, resource allocation, use of natural resources, consumption of goods and energy and big-picture decisions such as whether to do business in a country that is seen to violate human rights. The emerging sentiment around social responsibility at the beginning of the COVID-19 induced economic hibernation is that it will no longer be optional for organisations to tradeoff human wellbeing in favour of profit. The World Economic Forum’s COVID Action Platform (2020) refers to the profound changes in global value chains requiring unprecedented collaboration and collective response in recognition of the interdependence of the world’s economies. People around the world are starting to understand just how connected we all are, and how deeply collaborative we will need to be to ascend this historic disruption.
Prior to the COVID-19 outbreak, managers were tackling considerations such as their organisation’s impact on the natural environment, which from an economic standpoint, might have presented a significant dilemma. Widespread recognition of the need for ecologically sustainable management practices had arisen as a result of increasing levels of public and organisational awareness about the damage to the environment caused by the combined effects of capitalism and consumerism. Managers and business leaders have been increasingly expected to have a clear and complete understanding of the cause and effect relationships between organisational actions and environmental outcomes and not only be responsive, but take responsibility for the ecological impact of all company decisions (Senge, Smith, Kruschwitz, Laur and Schley, 2010).
In their 2010 book The Necessary Revolution, Peter Senge and his fellow authors write: tapping and developing the potentials of people and organisations to create the future rather than react to the present rests on two foundations that have always been at the core of our work on organisational learning: visions for the future and an understanding of the present reality (p. 51).
At this point in history, the present reality is still dawning on us. We are only just beginning to see the widespread consequences of the global COVID-19 pandemic. For business leaders and managers this is a time of enormous responsibility, with the added pressure of the need for adaptive innovation and finding a pathway to ongoing viability; but not for profit, to protect people’s jobs and livelihoods. In the past, many organisations had adopted socially responsible and sustainable business practices in reaction to regulatory demands or public pressure (Senge et al., 2010), in the COVID-19 economy it is the only way to ensure the business is ongoing. If you are not ‘necessary’, if your product or service is not deemed ‘essential’, you cannot currently operate in many economies around the world, Australia included. This present reality is creating an opportunity for citizens to de-couple themselves from consumerism and reflect on what is ‘essential’. How many businesses will be collectively deemed as ‘unessential’, and therefore be no longer viable in the new economy? From the perspective of social responsibility and the extent to which your organisation is ‘of service’ to society, does your business deserve to survive the pandemic?
A vision of the future in which your organisation helps to ‘make the world a better place’ was already fast becoming the expectation of many stakeholders; internal, external and shareholders alike (Senge, et al., 2010). Post-hibernation, will the public go back to supporting businesses that produce poor-quality, unessential products? Will citizens refuse to re-populate dense urban areas in order to access essential services and instead, insist on more resilient and locally-responsive de-centralised services? Research has showed, in the past, once an organisation had made a public commitment to respond to societal demands, the public held them to it (Senge, et al., 2010). When it comes to violations of expectations around social responsibility we have numerous avenues for retribution against an organisation that we vigorously exercise, regardless of their size or power. We ‘Tweet’ about it, comment on it on Facebook, join feeds on Reddit, and forward electronic petitions to our friends and family hoping they’ll join us in our fight for social justice.
At this point in history, an organisation’s orientation toward social responsibility can no longer be about compliance or giving in to public pressure, it must be integrated into the organisation’s identity and sense of purpose. The desire to have a positive impact on society must influence workplace culture and be acknowledged as providing a heightened sense of meaning and purpose to the work of employees. Few of us are going to let the government re-introduce fees for childcare without a fight, many will not want to return to office-work and our collective conscious won’t forget the kindness of people who helped homeless others off the street to avoid contracting coronavirus. Healthcare systems will never be the same and our attitudes to education have changed forever.
Leadership and management in the COVID-19 economy aren’t about following rules or procedures. Responsibility and accountability, right now, cannot be about ensuring regulatory compliance or reacting to perceived financial risks. Right now, effective leadership and management is about thinking well, acting ethically and actively helping to shape the day to day reality of employees to enable them to find meaning, and see the interdependence between organisations and society, people and the environment, and the cause and effect relationships between actions and outcomes – stay home to flatten the curve.
In the current context of constant change, volatility, uncertainty, complexity and ambiguity (VUCA), management has to evolve. No longer is it sufficient to simply demand efficiency and effectiveness from employees, your business will not survive. As we experience the digital revolution triggered by the global disruption of the pandemic, we need to look around and discover that management is about facilitating people to be at their best, it is about re-designing cultures for innovation that contributes to the social good and have a positive impact on our social evolution. We have an opportunity to craft a new normal, for something better to emerge from the collective, global suffering we are experiencing. We must take this time to think; how do we intend to show up, when the world re-emerges from hibernation?
To continue your learning on transformation, you might be interested in Activate, our transformation eXcelerator program. Next intake commencing February 2021.
Reshaping Global Value: COVID-19 implications on manufacturing and supply systems (2020). Available online at: https://www.weforum.org/projects/reshaping-global-value
Senge, P. M., Smith, B., Kruschwitz, N., Laur, J., & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. Crown Business.