Corporations are (Their) People

Responsibility Offers Opportunity

Several decades ago, corporations tended to stay out of politics. This wasn’t so much a matter of apathy as it was the product of a worldview summarized by Milton Friedman when he said, “The social responsibility of a business is to increase profits.” The campaign to push businesses to divest from Apartheid South Africa is an exception that proves the rule. While protests against the regime had really begun in the late ‘60s, it wasn’t until the mid-80s that major international banks fully succumbed to public pressure.

Four years after author Aaron Hurst announced the arrival of the “Purpose Economy”, much has changed. The majority of consumers want companies to be vocal about social issues. In a consumer capitalist society, we don’t just vote at the ballot box. We vote with our dollars and labor, too. As a result, business leaders have sometimes moved rapidly to take public positions that can influence policy, like Salesforce’s public rebuff of a discriminatory law in Indiana in 2015 or Patagonia’s campaigns about environmental policy. Corporations are now people, and people have opinions.

In a recent example of responsiveness, Starbucks closed 8,000 stores to hold training workshops about racial bias following an incident at one of their stores. Despite years of substantial investment in training that would help employees diffuse conflict, the company saw that there was more work to be done. Cynics might wave off such efforts as mere PR firefighting, but the consultants they hired for the training framed it differently: “The formational identity of Starbucks is centered around the creation of the ‘third place’…a public space where all are welcome and people can share the Starbucks experience.” This wasn’t just about the bad press from one incident; it was the realization that the company was not living up to its cherished values, and needed to take corrective action.

Yet, before we congratulate ourselves for our commitment to corporate responsibility, we should reflect on other, less-trumpeted changes to the relationship between business and society. The impact of the 2008 crisis still reverberates through much of America. Though the recession was technically over by mid-2009, it has taken workers ten years to recover—and some never will. Combined with a decades-long trend toward lighter benefits packages, the preference for independent contractors, and the continued struggles of retirement plans, this has called the social contract into question.

Workers are responding to this climate by demanding more social responsibility from their employers. Millennials and their successors will make up the majority of the workforce by 2020, and they expect a degree of moral alignment with the practices of their employers. For example, in a recent survey, 89 percent of Millennial employees said they want their employer to provide hands-on opportunities around environmental responsibility. Two thirds would take a pay cut to work for a firm that’s more socially responsible.

Of course, it’s easy to be in favor of social responsibility in the abstract. It gets more complicated when an organization starts making specific policy choices. Just ask WeWork, a research partner of PLASTARC’s that recently made headlines. Citing the environmental impact of meat production, they announced they would no longer serve meat at company events or reimburse employees for meat ordered on the job. Carnivorous clients and employees would not be barred from the premises, but would have to buy burgers on their own dime.

Public reactions ran the gamut from praise to castigation. Some lauded the company for taking a stand on a global issue of critical importance, highlighting WeWork’s claim that the move will save “…an estimated 16.7 billion gallons of water, 445.1 million pounds of CO2 emissions, and over 15 million animals by 2023.” Others criticized the decision as an impractical intrusion into the lives of employees, a publicity stunt, or even tyranny. What many critics miss is that this change looks less like a top-down edict than a reflection of the culture of their clients and employees. As a founder myself, I spend a lot of time thinking about how to provide a workplace that reflects the values of my team (which happens to include many vegetarians).

WeWork isn’t really breaking new ground, as a recent piece in Reason pointed out: “Over the years, a variety of companies have implemented policies banning alcohol, soda, microwave popcorn, and even snacks from some or all premises. Many large employers participate in Meatless Mondays, including Subway, Chipotle, Sodexo and Aramark.” These last two firms, which together employ over half of a million people, operate corporate cafeterias around the globe. They are not consumer-facing brands, so it’s harder to argue they’re doing it to be hip.

We at PLASTARC have seen firsthand how a history of activism can create success for a company. When PLASTARC was advising Unilever on change management a few years ago, they were in the midst of launching two new product lines geared to the growing vegan market: Ben & Jerry’s non-dairy ice cream and Hellmann’s vegan mayonnaise. The ice cream was a smash hit, while the mayo debuted with less fanfare. Both were quality products made by the same parent company. Why did the public react so differently?

Ben & Jerry’s had already spent years cultivating a reputation as an ethical company. They pledged to use 100 percent renewable energy, even though it might increase short-term costs. They started promoting LGBT equality in the late ‘80s, and have taken public positions on racial justice and campaign finance reform. They also paved the way for the B Corporation movement they would later join. This long history of advocacy generated a loyal following amongst the customers that would appreciate this new product. To borrow an apt turn of phrase, culture ate strategy for lunch—or maybe, in this case, dessert.

For its part, the architecture and design community has served the need for value expression through building certifications. The first generation of these, including LEED, focused on the environmental impact of buildings themselves. In recent years, this has been followed with certifications that also address the working conditions and well-being of the people within, like FitWel. It’s not hard to imagine a next step that includes a broader perspective; perhaps building standards like these and B Corporation Certification could overlap to create spaces for socially-conscious businesses. This could be especially helpful for startups, who often want to be good global citizens but may lack the resources to support their own robust social responsibility efforts.

Every now and then, we might find that we disagree with a given company policy or political stance. Individual and corporate choice can be used in service of ends that are either ‘good’ or ‘bad’. The intriguing challenge before us is to listen to the people we work and do business with and to try to represent their values in all their complexity. People who design, build, and manage workplaces may not have thought of themselves as moral, political, or philosophical actors in the past, but the physical environment is where the rubber meets the road. This process may sometimes be messy, but this is an exciting time to be in a field that can have a direct impact. Done well, it can strengthen the relationship between employee, employer, and customer. Through policy and thoughtful design, we can build workplaces and cultures that allow us to do well and do good. 

All images courtesy of PLASTARC