Sections

Freedom, Purpose, And The Opportunity To Achieve Success

Rohan Light

In discussing freedom and opportunity within an organization, Nilofer Merchant wrote, in the forward of Dan Pontefract’s 2016 book The Purpose Effect:

“When people know the purpose of an organization, they don’t need to check in or get permission to take the next step; they can just do it. When the organization is demonstrating purpose, the likelihood of employees going above and beyond the call of duty greatly increases. When organizations stand for something, it brings coherence to everything and a real advantage to what they offer.”

The purpose of good business

If a good business has purpose, what is the purpose of a good business?

It’s not to make money. There has been enough work done on the poverty of the shareholder approach to management that we can accept that path as a dead end. Even the general idea of making money or generating wealth is insufficient to understanding purpose in general and the purpose of business in particular. We’ve had a clear view of this since Aristotle wrote the Nichomachean Ethics in the 4th Century BC:

Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.”

If wealth is not the good that the good business seeks, why does the “bottom line” remain the preeminent goal of business? People have advanced many explanations, but the simplest may be that the bottom line can be counted. What can be counted is easier to understand and therefore to manage.

Profit and purpose

It would be going too far to claim we can live on purpose alone. Money doesn’t serve as a proxy for purpose. Whenever we survey the wreckage of the business world, financial mismanagement is a common factor. This tells us that money is important… just not all-important. Peter Drucker touched on this in his 1973 book Management: Tasks, Responsibilities and Practices:

“To attain any of the [business] objectives entails high risks. It requires effort, and that means cost. Profit is, therefore, needed to pay for attainment of the objectives of the business. Profit is a condition of survival. It is the cost of the future, the cost of staying in business.”

So profit is a condition of staying in business, which means staying in pursuit of business’s purpose. What helps us make sense of the purpose of a good business? The people who take part in the organization’s activities and the society that provides a place for the business. In other words, a business doesn’t exist in isolation from society. The purpose of good business can only be found by trying to understand the role of people within a society.

Responsible enterprise

I wrote a manifesto of six articles to help me understand the purpose of business, or “responsible enterprise,” as I called it. Article V:

“Responsible enterprise brings together people’s need for aspirational achievement and society’s need for productive contribution. Responsible business takes people’s and society’s needs and transforms them into opportunities.”

Our need for aspirational achievement is the thread that links our various experiences in life. Business management is no different. And we encounter this aspirational need the most when it comes to hiring. How we hire determines how well we are able to take society’s needs and transform them into individual opportunity. Which raises the question, how effective is our track record in hiring?

Hiring and opportunity

That’s an interesting question. Robert D. Hare wrote in his 2006 book, Snakes in Suits, how contemporary management culture provides the opportunity for psychopaths to find a niche. He noted that because the hiring process is subjective, psychopaths are able to bring their primary tools of lies and charm to good effect. And we shouldn’t for a minute think that defective hiring mechanisms will only be found in the likes of disgraced firms like Goldman Sachs. The Silicon Valley hero entrepreneur culture is equally open to abuse.

Both environments have in common our broader tendency to elevate the social status of certain roles, professions, or industries. We form an idea in our mind that these positions are of great value, and in an effort to be the best we can be, create competition for them. For some of us, competition provides an opportunity to show the best of who we can be. But for others, the race to the professional top becomes a race to the moral bottom. The way we view people, their places in organizations and the place of organizations in society contributes to many of the troubling outcomes we can observe.

Disabled opportunity

But this article isn’t about the obvious challenges we create for ourselves in our hiring practices. If we should hire with aspiration and opportunity in mind, we should hire with the opportunities people have to bring their aspirations to bear in pursuit of purposeful business. This becomes an issue of deprivation. There is no more deprived group of people in the world than those with disabilities, mental, physical, and social.

I used the word psychopath earlier to make a point about culture, but psychopathy is not a psychiatric diagnosis. There is a “burn the witch” association to the word. Mental disability in general is widespread, nuanced, and easily stigmatized. We do ourselves a great disservice in our search for purposeful business to think only in terms of people with education, experience, and perfect teeth. If the task of purposeful business is to link the aspirations of people together, then we must also pay attention to relative deprivation  of opportunity and its corollary, neglect. As Amartya Sen wrote in his 2009 book, The Idea of Justice,

“People with physical or mental disability are not only among the most deprived human beings in the world, they are also, frequently enough, the most neglected… The magnitude of the global problem of disability in the world is truly gigantic. More than 600 million people – about one in ten human beings – live with some form of significant disability… The impairment of income-earning ability, which can be called the ‘earning handicap,’ tends to be reinforced and much magnified in its effect by ‘the conversion handicap;’ the difficulty in converting incomes and resources into good living, precisely because of disability.”

Harnessing aspirations

opportunity

The purpose of good business is to harness people’s aspirations and direct those aspirations toward meaningful opportunity. To those ends we owe it to ourselves to take a closer look at how we include or exclude people from our ranks. Not everyone can be made in image of the hero leader.

We can’t all tick the boxes that indicate a good fit. We can’t all grow a good hipster beard, write witty Twitterisms, or make sagacious points in front of a giant screen. But we do all have aspirations and we do all have something to contribute. We deserve the opportunity to do so. Some of us, by a twist of fate, have had less opportunity to contribute and have come further in our quest to do so.

For more insight on how to tap a diverse workforce to foster purposeful business, see The CMO Personality Vs. The C-Suite Personality.

Comments

Future Cities: Jobs And Social Capital

Brian Lee-Archer

If work isn’t the cornerstone of our society, then why is there so much focus on the jobs of the future and the impact of the digital economy?

Labor mobility is a characteristic of a modern thriving economy. Jobs might attract people to a community, but livability makes them stay. Bill Clinton’s famous slogan from the 1992 U.S. presidential election, “It’s the economy, stupid,” is a poignant reminder that sustainability within our communities is contingent on a level of economic activity.

Jobs and livability go hand-in-hand. Economic activity within a community underpins investment in social capital-related initiatives. Strong social capital is a stabilizer to the negative effects of economic cycles. Improving livability and economic activity can trigger a virtuous circle effect leading to sustainable communities.

On the other side of the coin, if economic activity slows and jobs disappear, investment in livability may decline and put community sustainability at risk. Communities often have limited capacity to influence the macroeconomic issues that determine labor markets and attract jobs.

However, they have a level of control over livability factors such as open space, public safety, and recreational activities.

In periods of economic slowdown, the focus on social capital-related initiatives contributes to resilience, thereby increasing capacity to influence economic activity.

The new economy is putting a spotlight on the concept of tradable and non-tradable jobs, as Enrico Moretti explains in his book, The New Geography of Jobs. A tradable job creates goods or services that can be exported to other regions—for example, knowledge or manufacturing jobs.

Non-tradable jobs are usually local jobs that support people in tradable jobs—for example, retail, health services, and education. According to Moretti, “A healthy traded sector benefits the local economy directly, as it generates well-paid jobs, and indirectly, as it creates additional jobs in the non-traded sector.”

At the macro level, attracting traditional tradable industries such as manufacturing is beyond the reach of many communities. While communities may offer incentives to attract investment, it comes with risk.

However, the new economy provides opportunities to attract or upskill to a new class of tradable jobs at a lower investment risk – the knowledge workers. Knowledge workers have higher average incomes, are mobile and well-educated, and have a life perspective beyond the community they live in. Knowledge workers create the potential to leverage existing social capital assets of the community to enable innovation, leading to new jobs with higher levels of job satisfaction.

Increasing the pool of knowledge workers within a community lifts demand for local services in the non-tradeable sector – the multiplier effect.

By virtue of their mobility, knowledge workers have the opportunity to exercise choice in where they live. Communities can leverage livability factors to retain newly upskilled workers and attract new knowledge workers.

A three-year study (2010-12) conducted by Gallup and the Knight Foundation of 26 communities across the United States, The Knight Soul of the Community, examined the factors that bond residents to their communities and the role of community attachment in an area’s economic growth and well-being.

This study revealed three dominant factors: aesthetics, openness, and social offerings.

Kick-starting a virtuous circle of growth in employment and livability is contingent upon a rich source of data and the capability to turn data into information for business insight.

Information informs community leaders in making targeted investment decisions addressing social capital factors proven to have a positive impact on tradable job prospects.

Community leaders face a unique challenge: The levers they have most control over are not necessarily the most direct in terms of creating jobs. However, the livability levers they do control can have a significant impact on creating the environmental conditions for innovation among knowledge workers.

The economic value created will empower communities to invest further in social capital initiatives.

For more on how technology drives social capital, see Smart Investments Create Smart Cities.

This article was originally published on InnovationAus.com.

Comments

Brian Lee-Archer

About Brian Lee-Archer

Brian Lee-Archer is director of the SAP Institute for Digital Government Global (SIDG). Launched in 2015, SIDG is a global think tank that aims to create value for government by leveraging digital capability to meet the needs of citizens and consumers of government services. In collaboration with government agencies, universities and partner organizations, SIDG facilitates innovation through digital technology for deeper policy insight and improved service delivery.

Removing Bias From Digitization Brings Economic Opportunity For All

Shelly Dutton

Conventional wisdom tells us that all of us encounter change. Some people fully embrace it as a new beginning and use it to create something positive or even life-changing. Others fight it along the way. And a vast majority accept the change – but only on their terms.

No matter where you fall, it is increasingly difficult to ignore how various faction of our global society views change.

Populist movements are emerging all over the world, fueled by populations that are not economically uplifted by the opportunities of the digital economy. And one look at news headlines over the last decade justifies such sentiments. For example, many companies are focused on simplifying and shortening supply chains. Automation is making production location and outsourcing decisions no longer dependent on labor costs. The possibilities of 3D printing could potentially decrease the need to ship goods across long distances.

In a recent interview with Handelsblatt Global, Bill McDermott, CEO of SAP, acknowledged that more must be done to show how everyone – of any level of education, industry, and demographic – can fit in a world of globalization and digitization.

“Governments can no longer ignore them,” he observed. “Countries need to consider how to usher a large chunk of the workforce into a modern economy.”

Even though businesses are investing in technology to automate tasks that were formerly carried out by workers, McDermott believes that some jobs can never be improved by a machine or robot. However, political and business leaders still need to do more to alleviate fears of job loss and an unemployable future.

“Clearly, we are going need new forms of training and education, and companies can play an important role in that process,” McDermott shared.

Employees have a right to understand how technology will power a progression present work situation to a future of opportunity, promise, and prosperity. Businesses have an obligation to impart knowledge and guidance to their employees and a clear, sustainable, and achievable road map of their digital strategy. Ultimately, leadership teams need to side with their workforce and do everything in their power to help ensure their success.

Once the executive team and its employees of all levels and responsibilities are engaged in the business’ digital direction, the future is full of immense potential. McDermott uses his own workforce as an example of the possibilities, “We have 22,000 brilliant developers, the greatest in the world. We just needed to unleash their potential and set them on the topics that matter most. We don’t need to buy any small startup to reach our goals.”

For the entire interview with Bill McDermott, read the Handelsblatt Global article, “Computers Don’t Have a Bias.”

Comments

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


Comments

Tags:

To Get Past Blockchain Hype, We Must Think Differently

Susan Galer

Blockchain hype is reaching fever pitch, making it the perfect time to separate market noise from valid signals. As part of my ongoing conversations about blockchain, I reached out to several experts to find out where companies should consider going from here. Raimund Gross, Solution Architect and Futurist at SAP, acknowledged the challenges of understanding and applying such a complex leading-edge technology as blockchain.

“The people who really get it today are those able to put the hype in perspective with what’s realistically doable in the near future, and what’s unlikely to become a reality any time soon, if ever,” Gross said. “You need to commit the resources and find the right partners to lay the groundwork for success.”

Gross told me one of the biggest problems with blockchain – besides the unproven technology itself – was the mindset shift it demands. “Many people aren’t thinking about decentralized architectures with peer-to-peer networks and mash-ups, which is what blockchain is all about. People struggle because often discussions end up with a centralized approach based on past constructs. It will take training and experience to think decentrally.”

Here are several more perspectives on blockchain beyond the screaming headlines.

How blockchain disrupts insurance, banking

Blockchain has the potential to dramatically disrupt industries because the distributed ledger embeds automatic trust across processes. This changes the role of longstanding intermediaries like insurance companies and banks, essentially restructuring business models for entire industries.

“With the distributed ledger, all of the trusted intelligence related to insuring the risk resides in the cloud, providing everyone with access to the same information,” said Nadine Hoffmann, global solution manager for Innovation at SAP Financial Services. “Payment is automatically triggered when the agreed-upon risk scenario occurs. There are limitations given regulations, but blockchain can open up new services opportunities for established insurers, fintech startups, and even consumer-to-consumer offerings.”

Banks face a similar digitalized transformation. Long built on layers of steps to mitigate risk, blockchain offers the banking industry a network of built-in trust to improve efficiencies along with the customer experience in areas such as cross-border payments, trade settlements for assets, and other contractual and payment processes. What used to take days or even months could be completed in hours.

Finance departments evolve

Another group keenly watching blockchain developments are CFOs. Just as Uber and Airbnb have disrupted transportation and hospitality, blockchain has the potential to change not only the finance department — everything from audits and customs documentation to letters of credit and trade finance – but also the entire company.

“The distributed ledger’s capabilities can automate processes in shared service centers, allowing accountants and other employees in finance to speed up record keeping including proof of payment supporting investigations,” said Georg Koester, senior developer, LoB Finance at the Innovation Center Potsdam. “This lowers costs for the company and improves the customer experience.”

Koester said that embedding blockchain capabilities in software company-wide will also have a tremendous impact on product development, lean supply chain management, and other critical areas of the company.

While financial services dominate blockchain conversations right now, Gross named utilities, healthcare, public sector, real estate, and pretty much any industry as prime candidates for blockchain disruption. “Blockchain is specific to certain business scenarios in any industry,” said Gross. “Every organization can benefit from trust and transparency that mitigates risk and optimizes processes.”

Get started today! Run Live with SAP for Banking. Blast past the hype by attending the SAP Next-Gen Boot Camp on Blockchain in Financial Services and Public Sector event being held April 26-27 in Regensdorf, Switzerland.

Follow me on Twitter, SCN Business Trends, or Facebook. Read all of my Forbes articles here.

Comments