Author: Malcolm Preston, Global Sustainability Leader
I’m in a really privileged position to work with some great business leaders and it’s interesting to consider their legacy. ‘Legacy’ seems such an old-fashioned word - somewhat detached and not really relevant for today’s business world. But you just have to look at the actions of Bill Gates, CEO of Microsoft, or Paul Polman, CEO of Unilever, and the legacy they’re creating is clear. Both men have a vision and are determined to make a positive difference in their lifetimes. Their approaches are very different – one uses his earnings from the business as a force for good, the other uses the business itself to drive responsible business behaviour. But both are clearly driving visible change and will likely be remembered favourably for their contribution.
When I talk to business leaders about legacy, many say they want to be able to look their own children in the eye and have a reasonable response when challenged with, “what did you do with your position and your power?” I often wonder whether the personal nature of family mealtime conversations like these has more power and resonance than any stakeholder pressure. Take the very current example of the Ebola crisis: if I were leading a company in the healthcare, life sciences R&D or even medical equipment industries, I’d want a very good answer when my kids ask what I’m doing to help those suffering. Being held personally accountable plays a strong part in driving legacy, but it needs to be articulated and embedded into business strategy to shape the business – it can’t stay personal.
In PwC’s 17th Annual Global CEO Survey, 40% of CEOs said that the one thing they wanted to be remembered for, as CEO of their enterprise, was creating ‘social value’ or ‘value for others’. Over the years, this hasn’t changed – the response was the same in 2007. On the one hand, it’s reassuring to see it’s remained stable; I would have expected to see this figure plummet during the financial crisis as CEOs focused on business survival. But, to be honest, I was actually pretty disappointed to see just how low it was in the first place.
Business can’t exist without society. Society provides the employees, the suppliers and the buyers for business to function and be effective. And society lives not just with the benefits business generates, but the negative outcomes too, like pollution, deforestation, water stress etc. So it’s extraordinary that 60% of CEOs would appear to view it as a one way relationship, putting profits before people, and personal gain ahead of creating positive value for the society they serve. Am I being too harsh? Perhaps it’s because CEOs were asked to name just ‘one thing’ that they wanted to be remembered for. But certainly the connection between society and business isn't coming across as strongly as I would have liked to have seen.
I believe business is a significant contributor to many of the problems now faced by humankind and that a responsible approach to business is the way forward. I’m honoured to have been invited to attend the Rockefeller Foundation’s Bellagio Centre to participate in a Shared Value Initiative workshop where we’ll be looking at the future of shared value measurement. If a few leading organisations start reporting against key metrics for social and business value, while proving it adds value to the business, others will likely sit up and say, “If it’s giving you competitive advantage, we should be doing the same.”
I see a real benefit in this - in having an industry standard measurement framework that allows information to be generated for management decisions and company comparison, covering social as well as business impacts. This is my long-term quest—if I go to my grave and it’s happened, I’ll be a happy man! As for whether it’s possible or not, I desperately hope it is.
At PwC, we’re working towards this with Total Impact Measurement & Management (TIMM), and I look forward to a continued dialogue with the Shared Value Initiative and other stakeholders to advance the global vision. I hope my legacy will be to have inspired and enabled others to do business in a better way, that’s embedding responsible growth into strategy. I want to be able to look my kids in the eye and say, “I did my best”. And my team at work know it, too.
For more information, read my full article entitled, “What motivates your CEO over the long term: Shareholder or social value?”
Malcolm Preston is Global Sustainability Leader for PwC, and leads a team of some 700 sustainability and climate change experts. Malcolm has a view on all aspects of sustainability from climate change to reporting, to supply chains to international development, and specialises in Total Impact Measurement & Management. Read more.