If the fourth industrial revolution (4IR) has the potential to ring in a new era of social progress and strengthened societies, we need to re-imagine capitalism. The first step towards this is building a conscious company.
This is not merely doing right, it is instilling diversity and inclusion governed by strong ethical leadership.
I was privileged to attend the recent SingularityU South Africa Summit, where a main topic was ways we can future-proof our continent. The focus was on exponential business models and ideas that can catapult Africa beyond the fourth industrial revolution. This rings true for Absa’s purpose, which is to bring possibilities to life by investing and unlocking Africa’s ingenuity and entrepreneurial tenacity.
Our continent consists predominantly of people of schoolgoing age. In this fast-paced, volatile, uncertain, complex and ambiguous world, we should now, more than ever, focus on equipping young people to tackle the continent’s problems head on.
As Valentine, a post-graduate student in mathematical biology in Tom Stoppard’s 1993 play Arcadia, noted: “The future is disorder. A door like this has cracked open five or six times since we got up on our hind legs. It’s the best possible time to be alive; when almost everything you thought you knew, is wrong.”
Something similar is happening today.
The exponential change we’re seeing in the post-digital age is set against a backdrop of disruption and change, and it’s clear that artificial intelligence (AI) will soon be processing and producing faster and more effectively than humans. Our education models should shift to drive the integration of the humanities, creativity and technology with critical thinking skills.
More than ever, the 4IR requires authentic, values-based leadership and learning that stays abreast of the ever-changing world.
I have been following the work of conscious capitalism, looking at how future generations will demand that conscious leaders are at the helm of companies. With the rise of populist politics and a post-truth culture, it is critical that business transforms its models to respond to global challenges. The sustainable development goals set by the United Nations General Assembly in 2015 present an opportunity to do so.
An exercise during the launch of the Business and Sustainable Development Commission, in Davos in January 2016, showed how the goals can unlock $12-trillion in business opportunities, presenting the obvious opportunity of doing well while doing good.
This simple idea has created exciting new opportunities and given many businesses a distinct competitive advantage. Companies such as Unilever, Whole Foods Market, Starbucks and Discovery have shown this. But many people still have the misconception that “doing good” means making less money and that there is always a trade-off between financial return and effect. This is not the case. In fact, this is the only business model that will survive.
At the recent Conscious Leadership and Ethics Summit, hosted by Conscious Companies and the Mail & Guardian, Saul Klein, of the Gustavson School of Business at the University of Victoria, British Columbia, maintained that companies will increasingly come under pressure from consumers if they don’t re-evaluate their leadership and business models. He argues that the market has evolved from a product-based economy primarily, which emphasises functionality, to the service-based economy, which is relational. The next phase is a values-based economy, driving sustainability.
Pure capitalism does not pay enough attention to the effect of business on society and the environment. We have witnessed customers using their purchasing power to protest against companies who do not have sustainable business practices. This has become more pronounced in recent years and the greatest advocacy for a new order is from the youth. Evidently, they will not only use their purchasing power, but will also decide who they will work for based on a company’s value system.
Now more than ever, businesses should look at how to drive conscious leadership practices with clear ethical guidelines. It is worth noting that in 2018, more chief executives were ousted because of ethical lapses than poor financial performance or struggles with a company’s board, according to a recent PwC study.
The notion that corporations must earn their “social licence to operate” and serve stakeholders rather than only shareholders is not new. The “triple bottom line” (social, ecological and financial) is also creating shared value. It’s a concept that implores companies to drive profit with a purpose. Conscious capitalism is business that reflects the potential of business to have a positive effect.
For banks that means using technology purposefully. Silicon Valley has been defined by the ethos “move fast and break things”, but we see the mindset slowly shifting to “move purposefully and fix things”.
Technology has reduced the cost of banking, but the World Bank estimates that as many as 66% of sub-Saharan Africans are unbanked.
The potential on the continent is huge. The disrupter economy offers more choice and value to consumers. For example, cellphones contribute directly to some of the sustainable development goals by providing financial access to individuals and small businesses that were previously excluded.
Globalisation has created growth and development, but only for some. Too often, it has merely fuelled excessive inequality. Instead of using our collective intelligence and basic humanity to resolve poverty and other divisive social issues, we have allowed the gaps to widen.
How the digital revolution will transform the financial sector to benefit the planet and all its people will depend on who drives it and for what purpose. Peter Drucker, regarded as the founder of modern management, made the distinction between efficiency and effectiveness: efficiency is doing things right, effectiveness is doing the right things. What is required is a digital world that will lead to more effective financing: where capital is directed towards sustainable development and includes everyone.
We live in a very different world today, where the longest journey people must make is between their heads and their hearts. Customers — along with employees, partners, and investors — have much higher expectations of businesses. They expect the companies in their lives to be aligned with their values. Building trust in a company is no longer only about how it treats its customers, it’s also about the company’s values and how it contributes to society.
This cannot be achieved without a more conscious approach to capitalism, led by conscious leaders who are driven by service to society, to all the people the business touches and to the planet we all share.
Sazini Mojapelo is head of citizenship and community investments at Absa