This is the third installment of reflections and impressions from the meetings of the WBCSD's Future Leaders Team (FLT) in India, with Sonia Medina (EcoSecurities) and Pramod Arikal (Allianz Group) reporting back on behalf of the FLT.
Wow, when we thought that the week couldn’t get any better, it did. Today we had the opportunity to practice our stakeholder engagement skills with a dialogue on sustainable development and inclusive business. The challenge is clear: we need to enable sustainable livelihoods for the 9 billion people that will be in this world in 2050, within the limits of one planet. The challenge is enormous – bringing people together is always a good start.
WBCSD with Infosys and other networks invited over fifty participants from diverse backgrounds, ranging from MBA students at the Indian Institute of Management in Bangalore, to NGO representatives and business professionals. The result was incredible. It was quite fitting that the venue was the JRD Tata Hall at the Infosys campus. JRD Tata was a former chairman of the Tata Group, perhaps the most respected and admired business house in India. Over 50 participants in 5 groups debated three questions. The first question was “What are inclusive business practices and what are the roles and responsibilities of business, government and civil society in development?” In response, one participant paraphrased JRD Tata, saying, “Any company’s success depends on how they engage with the community and sustain the community around it for long term success.” In one of our earlier blogs we asked if some of the business case studies we see are indeed inclusive business or simply interesting innovations. This was an opportunity to test that assumption. There was a broad consensus among the participants that inclusive businesses need to go above and beyond simple innovations in selling or buying from the poor. Inclusive businesses, according to the group, ought to demonstrate other characteristics like optimizing the use of resources, building environmental awareness, improving access, respecting human rights and international treaties, adapting to demographic shifts and promoting these values among all the stakeholders. An inclusive business should also ensure that training, capacity building and skill development is provided to people especially women who have proven to transfer this knowledge and empower a new generation. Other examples could involve working with social entrepreneurs, educating consumers, and engaging with universities among others. The panelists agreed that an inclusive business ensures that people at the base of the pyramid have access to the market, thereby engaging in the value chain and helping uplift themselves out of poverty. The participants felt that civil society and the media also have a responsibility to support inclusive businesses, particularly by influencing consumers. Names of Indian companies like Indian Tobacco Company (ITC) who built a remarkable electronic market place for farmers, Tata and Infosys cropped up at various points in the discussion as well. One participant remarked that the “values” of Infosys were well-known before it became a business success. This made us realize the importance of instilling values within a company, not as a retrofit but in the DNA of an organization from day zero. It is however debatable whether the business case or profitability of the enterprise should be seen in conventional terms as Return of Capital Employed (ROCE) or operating profit. Some participants argued that a company following inclusive business will earn “Respectability Capital” which will in turn reduce its cost of capital. SEEVA (which is an adaptation of the word for service in Hindi – Seva) – Social, Economic, Environmental Value Added, which was proposed by one of the participants, is perhaps a new model to consider. However, participants cautioned companies about falling into the trap of patronizing communities that may not want our “help.” Do people in the community want to become IT whizkids? Will they be happier and better off after our “inclusive business” intervention? Are we liberating them from the “crutches” of poverty and forcing them into the “crutches” of a large corporation? These are pertinent questions. A true inclusive business will ensure that those included will be happier, better off, not dependent on the business alone, and provide people with options and the freedom of choice, for them as well as for future generations. The second question was “How do we accelerate change? What are the key opportunities and challenges in achieving inclusive business practices?” The answers were straightforward. “Proactive behavior is critical to increasing value, supporting growth and thereby bringing about change” said one of the participants. And where does the proactive change come from? The answers ranged from legislation, tighter regulation, stricter compliance, media activism and, of course, voluntary action by companies and/or industry bodies. The discussions then shifted to questions we are all familiar with….why don’t companies or industry bodies change proactively? Why don’t the governments legislate? It was evident that current cost structures and shareholder value creation model were barriers, real or imaginary, in achieving these goals. One could go on and on but instead we’d like to leave you with some examples raised through our discussions which provide insight into some of the key ingredients for companies pursuing inclusive business: Shell Foundation has developed a cooking stove for low-income families which also reduces indoor air pollution. When it failed the first, second and third time, the foundation put together a real management team combining people from R&D, sales and design from different businesses and finally got the model right. The product is now on the market and Shell is taking the innovation to other geographies. ABB combined with Rajasthan government and the local people designed a power system used and maintained by the people. It is clear that inclusive business requires commitment and participation. This leads us to the third question of the afternoon “What does leadership look like in the future? What other skills are needed? Where and how can they be developed? How can the next generation best prepare themselves?” This provoked great debate as participants started discussing if the command and control leadership was the right one or whether a more collaborative leadership is needed in the future. While that debate was not completely settled, it was clear that the future business leader has to not only listen to shareholders, the board, the customers and the employees; he/she will also need to listen to the society and engage with the communities where they operate and influence. “Inclusive leadership”, as someone put it. The future leader will not know all of the answers but will depend on diverse expertise within or outside the team to deliver solutions. The present economic crisis and the effects of climate change, geopolitical risks and the clash of cultures, indicate that we are at a tipping point. Participants singled out business schools for churning out graduates only interested in the bottom line and the MBAs in the panel (present students and practicing professionals) opined that it was high time that sustainability topics became part of the mainstream pedagogy (maybe a Masters in Sustainability) and a Sustainability Quotient a factor used by future employers. This approach is already being seen by many leaders today and names like Barack Obama, N R Narayanamurthy, Bill Gates, Al Gore, Mohammed Yunus, Bono, George Clooney and even Warren Buffet came up. We believe that this was a huge learning experience and at the end of the dialogue, though we had more questions than answers, we were energized for more debate going forward. We thank all the participants and the panelists for an inspiring evening. Tomorrow we get off the Infosys campus and visit a local school, a small scale industry and get a taste of another India...some say “the real India”!
We were impressed with participants’ responses to our push for solutions, coming up with some innovative ideas such as: setting up a green fund, establishing positive tax incentives, promoting consumer education, franchising models for job creation, efficient tracking of funds allocated by government, and engaging universities and academia to prepare future generations with case studies on sustainable business.
Disclaimer: The opinions shared in this blog entry are personal perspectives from the Future Leaders Team and do not express the opinions of the WBCSD or its member companies.
Background on the WBCSD Future Leaders Team
The WBCSD’s Future Leaders Team (FLT) is designed to enable future business leaders to become effective ambassadors for sustainable development through experiential learning, knowledge creation and the building of networks and skills.
The FLT 2009, launched in March 2009, is working closely with the WBCSD Development Focus Area to explore ways to drive positive change and influence development outcomes by looking for more inclusive business models that create new revenue streams while serving the needs of low-income communities. The first four months (March-June) were spent doing an individual project to measure and understand the way business contributes to development using the WBCSD Measuring Impact Framework. The second four months (July-October) will be spent preparing to advocate a future leaders’ business perspective on the role of business in development at the WBCSD’s Council Meeting in Washington DC in October.
The FLT is spending this week on Infosys’ campus in Bangalore, India, for their second of three meetings to reflect on the individual Measuring Impact projects, participate in a one day training workshop on stakeholder dialogue, run a future leaders dialogue, visit an inclusive business project and plan the second phase of the project. Throughout the week, the FLTs will be joined by experts from business and non-business who will share their perspectives on the role of business in development and the leadership skills needed to build a sustainable future in India and around the globe.
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