The 2008 financial crash ushered in a decade of profound suspicion about the role of business in society, even to some leading politicians seriously questioning the capitalist system. But, despite the doubters, it is business, rather than governments or NGOs, that is best placed to address our many global challenges, albeit collaboratively.
Winston Churchill observed that, “the inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” It is clear today, that for business to maintain its legitimacy, it needs to place greater emphasis on alleviating society’s miseries and ensuring blessings are more fairly spread around the world.
Over the past decade, HEC Paris has been a leader in moving business towards a socially responsible model and has also led very strongly in the areas of digital transformation and sustainable development.
This year, in association with the LSE (London School of Economics), HEC Paris is launching a unique executive program, Leadership 2030: Navigating the Contradictions, Tensions and Opportunities, which will delve deep into the myriad challenges facing the next generation of business leaders and crucially explore the most appropriate practical solutions.
Contemporary challenges addressed will include: climate change, social inequality, technological disruption, ecological values, ethical imperatives, liberalization, regulation, and more.
Join Leadership 2030: Navigating the Contradictions, Tensions and Opportunities to be a leader in socially responsible business
Module 1 ENVISIONING THE FUTURE: 1-5 July 2019 in London
Module 2 CREATING A SUSTAINABLE WORLD: 30 Sept - 4 Oct in Paris
Format: 10 days of in-class study │ Location: London and Paris
Leadership 2030 will bring together industry practitioners and cross-disciplinary faculty, from HEC and LSE, to examine the forces that promise to shape decision-making in the years to come. Participants will seek to understand the leadership needed to address the contradictions of profitability versus sustainability and to make business an engine for change to the quality of life and for the well-being of the planet
“The genesis of Leadership 2030 can be found in The HEC Centre for Society and Organizations (SnO),” says Professor Rodolphe Durand, the program’s strategic advisor and the Academic Director of SnO. “In the aftermath of the financial crisis, several colleagues here at HEC Paris were feeling, not directly responsible, but co-responsible for what happened…. because the people who invested in sub-primes and all the other financial vehicles had been trained in business schools…. we created SnO as a research centre just to move the story forward.”
Today this movement for social and business impact is a vibrant community of academics and business people with a mandate to think (research), teach (executive programs) and act (outreach to entrepreneurs and start-ups).
SnO benefits from involving, not just a few specialist professors, but experts from all business disciplines (finance, strategy, legal, marketing, operations, HRM, etc.) and major companies, such as Danone, Sodexo, Veolia, Renault, and Schneider Electric, that are at the forefront in thinking about the tensions between profit and sustainability, about the future of work, and about the needs of society.
“Having been involved with companies that have anticipated and found resolution to some of these tensions…. that's why we can now offer this Leadership 2030 program,” says Durand. “The question we are trying to answer is how do businesses build and maintain legitimacy with different domains across the value chain, in the share they take, the way they behave as executives and the values that they embody within the organization vis-a-vis collaborators, clients, and stakeholders.”
The business case for sustainability has become much more powerful
Durand points to Danone as a company, “that represents very well, a way to manage the different tensions and the capacity of an organization to deal with different stakeholder demands.” A good example of a company that has faced the issue of business in society, Danone is on track to become a certified B-Corp – one that binds itself to goals that benefit society and employees in addition to shareholders – by 2030. It is the largest company to have publicly stated such a goal, and its North American subsidiary is already the largest B-Corp, among more than 2,600 in the world.
Asked to what extent HEC Paris’s many client companies see addressing future business in society challenges as a major priority, Christelle Bitouzet, an Affiliate Professor at HEC Paris, says, “If you look at the requests we received for executive education, I would say that half of them are around this topic; how to reinvent the model for the future. How to address the new need, how to build the scenarios, how to change the mindset of my executive committee, or my teams, to make sure that they live in the future and not in the past.”
It's no longer just the concern of the CSR team; it's a top leadership concern
The interest is not just from large corporations. According to Durand, “these issues can be a fantastic leverage for differentiation for SMEs and start-ups.” There are numerous market niches that SMEs can exploit in answering social demands and companies of all types and sizes that ignore the technological, environmental and social challenges we face will are likely to be left behind. “If they anticipate them, as some proactive SMEs do, they can actually benefit from them.”
Nor is the desire for socially responsible business just coming from Europe. Despite President Trump’s tweets and plans to leave the Paris Agreement, U.S. corporations continue to step in, with well over a thousand CEOs signing a manifesto saying they will do their best to abide by the Agreement and will continue to fight climate change.
"The business case for sustainability has become much more powerful,” says Durand. If this is the case, the question then arises: how well are companies doing in managing the transition from current business models, focusing on short-term profitability, to addressing long-term challenges and long-term sustainability?
“How well? Not so well,” says Durand, “That's why this program exists, to help companies think these issues through. Some of them have ‘shadow boards’ – the next generation of future leaders – dealing with the same issues as the board, but offering very different solutions. Others just create ad hoc groups, project groups on certain issues that are transversal.” What is certain is that merely leaving social business issues to an isolated CSR director in a division belonging to the finance department and largely just responsible for investor relationships is no longer enough.
As Bitouzet puts it, “It's no longer just the concern of the CSR team; it's a top leadership concern. Our objective here with the program is to encourage senior leaders to think ‘I must absolutely work on what is going to be my future, the future of my company, with what trends, with what global understanding’ and get them to ask ‘how do I push all my functions and all my teams towards the goals that I'm going to design with them?’"
Companies are making considerable efforts to face the challenge of social business and to meet the core aim of the SnO: ‘to build a socially oriented mentality for business leaders – environmentally and socially as well as financially’. However, the transition is difficult, particularly for listed companies, where the power lies in the hands of the CFO, when the CEO himself or herself often comes from a finance background, and when investor relationships can trump other priorities.
“This is not an easy path to travel,” says Bitouzet, “but as soon as you're able to prove that there is value created by what you're doing, it works much better. The choice of what you're going to do first and how to build the right pilot unit or experience, showing that it's adding value and earning back money, makes the transition happen much quicker.”
Corporate reporting and how reports are presented becomes very important in this. “It becomes fundamental these days,” says Bitouzet. Reports that communicate not just financial data but how an organization's strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term, and how they affect wider society can not only communicate to external stakeholders but can be used inside of the company to manage strategy implementation. “It's a way to prioritise and to make sure that you're going to address the right issues, not only for the company, but also for the global stakeholders in your ecosystem,” she says.
The Leadership 2030 program will open with a first week in London, where it will leverage the expertise of the LSE Management department, to examine the social, technological and economic trends that will continue to emerge and shape what the future may look like. A second week will follow at HEC in Paris, with faculty from its Centre for Society and Organizations (S&O) providing guidelines on how participants can contribute to the creation of a more sustainable world. Instruction will combine traditional seminars with workshops, case studies, and site visits with participants invited to address their own personal and professional challenges through peer sharing.
With the collaboration between LSE, a global leader in social science, and HEC Paris, a school at the forefront of progressive leadership development, this program represents an unparalleled opportunity for senior and future senior leaders to delve deeply into the challenges that will face business and society in the coming decade, and crucially to develop their own personal visions for navigating them.
“Understanding the tensions that weigh heavily on your business will help you free yourself from them, turn them into opportunities, and turn yourself in a greater leader,” says Durand.