Best-selling author of Prosperity: Better Business Makes the Greater Good, leader of the British Academy’s Future of the Corporation Programme and professor of Management at the University of Oxford, Dr. Colin Mayer discusses how corporate purposes continue to change, how employee clarity on a company’s ‘north star’ can create competitive advantage, why regulation is no substitute for corporate ethics and much more.
Crisis drives change in corporate purpose:
It was Milton Friedman who said that “Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable”. That sums up very well what drives change in this area; it’s driven by crises.
Purpose is about solving problems:
The notion of solving problems is critically important. Any purpose that’s a profitable solution to problems of people and planet is legitimate and desirable.
Maintaining human purposes in Tech is particularly crucial:
This notion of purpose becomes particularly important when one thinks about technological innovations that are in process. The risk is that humans lose control and we lose the humanity that is associated with technologies. We’ll have to place particular emphasis on the purpose of algorithms being written to ensure they reflect what we, as humans, are looking for from our lives.
Regulation is not an alternative to purpose in Tech:
The rate of change in Technology is going up rapidly and there is no possibility whatsoever that regulation can effectively anticipate what’s going to happen. Why? Simply because regulators are never going to be in the position of being as well informed as the companies that are making those technological investments and decisions. If you then say, ok all we’ve got to do is just intensify and enforce regulation better, you’re going to have yesterday’s regulation essentially suffocating technological innovation that is helpful and failing to address technology that is detrimental.
Clarify purpose and empower your team to pursue it:
The key element in terms of successful implementation of purpose is recognising humans as humans with their own purposes. It’s a way of harnessing this tremendous creativity, this sense that everyone wants to have employment where they feel that they have a purpose for what they’re doing. Of course, it is the role of the people at the top to set the purpose or at least help identify what the purpose is and to ensure that the values of that purpose are reflected throughout the organisation. That is critical to being able to devolve decision taking and control because you’re not doing it through a command and control mechanism, you’re doing it through a mechanism of essentially narrative and persuasion.
There’s a link between purpose and organisational trust:
The notion of trust is something that is seriously downplayed in economic and financial analysis, where it’s all about incentives and performance-related outcomes. The notion of trust is one in which, even if one is not observing what the other person is doing, one knows that the other person will do ‘the right thing’; ‘the thing’ that the purpose and the values of the organisation set out and encourage people to do.