In a complex world, the sum of our knowledge is infinitely smaller than the sum of the things we do not know.
The temptation to write what will be, should be, could be the day after COVID-19 is immense in these times of general immobility. One of the most important things we do is to think, imagine and “guess” the future. At least as much as that of rehashing, rewriting and normalizing the past.
Prediction, an Olympic discipline practiced both by the elites shaping our world and by the masses who are addicted to sports betting. “Predicting is guessing” says Nassim Nicholas Taleb (“The black swan”).
What if the main lesson of this health crisis we are going through was above all a lesson in humility? Our systems built on planning and forecasting are failing. Our story is just an endless succession of black swans (World Trade Center attacks, Brexit, election of D. Trump, the Yellow Vests movement, the COVID-19 pandemic, etc.). It would not be so bad if this culture of constant prediction were not the alpha and omega of the decisions we take in the only temporality that prevails: the present.
Once again, the universe, nature and a charming nanoscopic organism interpose with our abstractions, our illusions, our human constructions, our forecasts and for the leaders that we are, with all our business plans.
Let’s think about the day of “now” — Just do it here & now!🎬
Entrepreneurs, leaders, managers, let’s take advantage of this moment to take decisions that will have a positive impact on our society. We are being harassed by signals from the planet and our modern societies seem to have run out of steam with a financial capitalism that, like communism in its time, was stranded on the pitfall of human nature. Common sense and altruism have no ideological label and are not the prerogative of any social category. Common sense should not need a cataclysmic hypothesis to succeed.
Each of us can take decisive steps to have a positive societal impact. The myth of infinite growth and overconsumption is falling apart. The collective consciousness is ready and the expectations of the populations are strong. This is the perfect moment to act in the direction of our deep values (sharing, solidarity, equity, etc.), to bring together as much as possible our economic ambitions and our search for meaning. To keep out leaders and executives who are driven only by greed or social posturing. So many of us wonder about the meaning of our professions, our actions and our companies. Now is the time to act as a fine tactician to adapt our economic patterns in-depth. Let’s turn this ordeal into a creative force immediately.
In specific terms, such an action consists in implementing solid measures aimed at making our companies contribute to societal challenges, up to their fair economic weight.
How? By choosing to integrate CSR (social responsibility) more closely into its economic pattern. Because the quintessence of CSR is a responsibility integrated into the business model. Remember, for each company, this consists of implementing concrete actions to have a positive impact on the environment and society (community, nation, people, etc.), beyond the scope of its social purpose.
Companies must radically transform themselves to respond to a tripartite equation:
- Respond to a market issue
- Respond to an economic viability issue
- Respond to a societal challenge with an equal proportion
The time is no longer for greenwashing and declarations of intent! Because this is a matter of our societal models surviving, it goes hand in hand with the survival of our markets and therefore of our economic patterns. Financial capitalism will destroy our ecosystem until its own market is destroyed. Should we not do everything we can to avoid this pitfall?
Having an impactful assumption of societal responsibility implies having an ethic, a conscience and a moral. The financial industry’s stranglehold on the real economy has made growth at any cost a norm. We must immediately break with this myth and accept to earn less in order to win together and sustainably.
What about taxes, you may say? The subject is not to deal with the tax which does not fall under the competence of the entrepreneur, but of what falls within his immediate field of action because it would seem that despite the tax, the commercial and financial success is very widely accessible. This is a good thing.
If this COVID-19 pandemic is just the invisible part that breaks down the illusiveness of our financialized economies, it may also be the source of a new economic era. A responsible economy era promoted by “legal companies”.
Legal Company: Salutary Evolution of the Legal Entity.
The legal entity is an extension of the vision of its leaders. She complies with it, whatever the challenges. Small and medium enterprises (SMEs) carry this vision within them and therefore have a social responsibility (CSR) whose importance varies according to the nature of the leader/founder. However, when it comes to larger company, the asymmetry between impact and social responsibility grows abysmally. These large groups cumulate all the characteristics that predispose them to societal failure: dilution of the leaders’ individual responsibility, organic distancing between decision and consequence, leaders steeped in the myth of infinite growth, financial market dependence, a chronic debt-culture, a statistical worldview, globalized competition, etc. One of the best (or worst) examples is those concerning the actors of the financial industry. But in their defense, not all of these companies were designed to carry this social responsibility. They are designed to make the maximum profits (predisposition to human greed), and then evaluated on their ability to generate dividends for the hoarders (savings) that we are (valuing greed).
Today, we must think about how to build or transform the legal entity into a legal company. CSR should become the integrated conscience. It is an economic paradigm shift that is more than ever essential to the company’s survival.
For startups, the challenge is to deeply understand this change, its implications and the ability to respond to the tripartite equation mentioned above. Too often still, the founders answer only two of the questions asked. Most frequently with combos: market + economic viability or market + social responsibility.
The most direct way to achieve this is to include social responsibility at the root of the business model and to make economic viability the driving force and provider of social responsibility. In short, each use, action, service consumption, and each growth euro must contribute to a significant proportion of the social and environmental challenges of our time.
In order to achieve this, economic results must be structurally correlated with societal action.
We are not talking about a societal commitment on the margins, a one-time crisis or a totally artificial one, as we most frequently observe. While the intention is often laudable, it is not a matter of deporting responsibility to customers by asking them to contribute directly or by reflecting the cost of this operation in the selling price (invoice rounding, salary rounding, micro-donations, carbon tax, etc.). The consumer’s, customer’s, user’s responsibility (different from that of the citizen) is to chose solutions, products, services, or more broadly companies that act and carry this social responsibility. LCommunication and acculturation issues through the company<->consumer interfaces are therefore central to enable consumers to make the right choices. Know-how and making known must reach their balancing point.
Imagine if Mark Zuckerberg decides there now and unilaterally that Facebook, (Instagram and WhatsApp) will now donate 10% of every Euros, Dollars, Pesos generated by his advertising revenue to public hospitals? Imagine if Alexandre Bompard (CEO of the Carrefour group) decides that his company will pay 1% of the price of each cart each month to the checkout and department teams who are the most precarious and on the front line in the face of the Coronavirus? Imagine if Société Générale’s board of directors decided that for each new client acquired, it would finance its gradual and total withdrawal from all collaboration with the palm oil sector? That Sanofi’s Board of Directors decides that, for each box of Doliprane purchased, x% of the margin should be donated to research against cancer or Alzheimer’s? These are just disconnected examples of economic viability studies but illustrate the intention and the approach.
This responsible company’ s economy makes use and consumption the engines of a better redistribution. Few companies have the social purpose to have a societal impact, but all can make the voluntary choice to have a positive impact nonetheless. It is a form of structural runoff that is implemented to improve the ecological situation, reduce inequalities, meet the needs of the poorest, promote the development of the world’ s poorest countries, relocate jobs, fight against discrimination, promote social inclusion, etc. This is how we can move towards a virtuous economic growth, a growth correlated with sharing.
The exercise is quite different for all the leaders from established companies, small and medium enterprises and especially large industrial and financial groups. Starting from scratch is not easy, but transforming your company’s business model is a completely different matter. Digital transformation of companies is hard. Such a transformation is necessary to survive economically, but it must carry a promise of more growth. Even harder will be the responsible transformation of companies because it carries the short-term promise (only) of controlled decline. Controlled decline in order to better distribute, better engage, better contribute, or even better get out of certain markets completely or gradually from certain markets out of a sense of responsibility (fossil fuel, palm oil, relocation, working conditions, short supply chain, etc.). Social responsibility comes at a cost and all shareholders must accept this if they want to see their investments sustain.
In this pandemic context, where the survival of a large number of companies hangs only by a thread, talking about controlled degrowth may be questionable. COVID-19 is not responsible for our structural deficiencies, our biased thought systems and our economic fragility. It is only the unpredictable x factor that brings them to light and imposes humility on us. May all the founders of startups who wish to change the world take advantage of this moment to rethink their business models and integrate into their ambitious business plans a significant part of redistribution and sharing. May all leaders and executives in search for meaning in their professional life make this moment, with a high emotional charge, an additional source of motivation to imagine and shape the societal impact of their company. That senior officials who are supposed to be at the forefront of the common good, also take the opportunity to rethink their respective administrations and also respond to this tripartite equation. If these organizations are not profit-oriented, they must seek some form of economic viability. Finally, governments create evaluation mechanisms (labels, certifications, etc.) and compensation mechanisms (subsidies, exemptions, public contracts, etc.).
This is not a time for pessimism, or even optimism. But for pragmatism, realism and action. Let’s turn this threat into an opportunity. I don’t know what the next world will be like, but we are assessing today and now what threat we face, what trial our species is going through, and what common sense dictates to all of us creators. This is a good time for change and for ambitious executives to take on governance.
By Jérémi Lepetit — Retreeb’s Co-Founder
Translated from French into English by Julie Lenfant