Progressive Business Models: Creating Sustainable and Pro-Social Enterprise, a recently published book endeavors no less than to define and demonstrate by several business case studies what progressive business truly means. These cases prove that it is possible to be profitable and prosperous and at the same time ecologically sustainable, future respecting, and prosocial. The book was edited by Dr Eleanor O’Higgins, professor of University College of Dublin and London School of Economics and by Dr Laszlo Zsolnai, professor of Corvinus University of Budapest. We asked Dr O’Higgins about the creation, objectives and contents of this book.
What did inspire you to write this book? Why did you find it important?
Well, I think there were a couple of influences. Both Laszlo and I are interested in sustainability and corporate social responsibility, also in new ways of corporations behaving in a prosocial way. As I had written some case studies before, Laszlo got the idea that we should collaborate. Partly because of our special interest in the topic of sustainability, but also because of our ambition to look at particular cases. Our ambition was to comprise a book of cases that are exemplars for new business models for the future. Laszlo himself is very prolific in terms of publishing, he takes a lot of initiatives, he likes to run with new ideas. So, it was his idea to do a book about it. Once he proposed his idea, I thought it was a great one, worth working on. We both have contacts in different countries who are also interested in these issues. These are contacts from companies or contacts who would know of companies that are creating new ways of doing business that we call progressive. So, we contacted our various friends and authors to ask if they have any ideas, and if they would like to participate.
What were your selection criteria regarding authors and cases?
There was a core of people that both Laszlo and I know. Because like Corvinus, UCD is in the CEMS group of management schools and we have an interfaculty group for business ethics, many of our authors came from this group. They are people whom we know, whom we have known over several years. They were natural first people for us. Then we had other contacts beyond this group. For instance, I had a colleague in the United States with whom I did some work together in the past. He would be a friend of the CEO of Unilever, a very progressive company, so that worked out well. Also, sometimes people in the group were too busy to write the case, but they referred a colleague.
The first chapter of the book focuses on the definition of progressive business. What is it in a nutshell?
Let me quote from the book. ‘Progressive business is understood as ecologically sustainable, future respecting, and prosocial enterprise.’ What we call ecologically sustainable, is sort of obvious: we mean the physical and ecological Earth system that should be sustainable. Future respecting means that we want our Earth to continue in similar ways, so we want the notion of sustainability and future go together. Prosocial means that we, human beings, live in society and we want to serve the enrichment of societies. So, these are companies that uphold those three principles. The first principle says that business activities may not harm nature or allow others to come to harm. The second principle says that business activities must respect the freedom of future generations. And the third one says that business activities must serve the wellbeing of people. One would hope that the three principles are consistent with each other and that they should be served in a way that they do not conflict with each other. That is, you hope that by sustaining nature at the same time you are not harming society and vice versa.
Is it connected to the triple bottom line concept of CSR and responsible corporate governance?
Only very vaguely connected. CSR is often seen as something tacked on to a business. It is a program you have, but it is not fundamental to your business. In our book, we delineate new business models, new ways of doing business, so that the whole way the activity system or the business model that the company uses is totally integrated with those three principles. Again, it is a different way of doing business altogether. So, while CSR seems to be a voluntary option, this is part and parcel of the everyday business of the company. And the company is totally involved. I am not saying that CSR is bad, but it is not great, it seems to be but an optional extra.
Could the good practices in these case studies be transferred to other businesses? Could these be used by corporate leaders to recreate their business model?
I would say that our cases are all very different. They are different in the ways of being progressive. It is not a one-size-fits-all model. For example, our Spanish case, which I like very much, is a major insurance company. It established a foundation to try to integrate people who are disabled into the workforce. They had people who were disabled to work for them and they discovered that these people made a great contribution, so, in fact, they were not doing them a favor. They did the work. In fact, they were almost more enthusiastic and appreciative of what they were doing than able-bodied employees. It worked out so well that it became a training center and they were able to train more and more disabled people who went to work for other companies. In a sense, it took off. This is but one example of what a company has done.
Another company, an Austrian one in agriculture, does everything organic and natural. It employs a lot of people. It seeks some sort of harmony with nature. So, it does not operate based on efficiency and productivity, that is, we need to employ the least people for the greatest output. It rather looks at employing a lot of people and thereby using people creatively. So those are two quite different companies I can name. Thus, you will not get an exact template that every single company can follow. But I think that by looking at these cases one would hope that people could be inspired. Business leaders could be inspired to revisit their business and look at some of these principles.
Nonetheless, there are some commonalities even though they are very different cases. Like the notion of sustainability, the notion of frugality in a sense that you do not waste things, you recycle and do not manufacture or make unnecessary things that you do not really need. Another commonality is leadership. That all the companies seemed to have an inspired leader or a leader who was like a missionary about what they were doing. Sometimes leadership moved into future generations of leaders. They might have had an original leader but then they got another leader who took over the reins with the same zeal. So, as I see it, there are no templates, but certain principles that somebody who wants to create a progressive business or transform an existing business into a progressive one can follow.
What kind of impact do you expect for your book?
Well, we do hope that the book will be used in teaching, as case studies lend themselves to it. Also, the way we structured the book: every case and every chapter at the end of it has a series of questions that a class of students or participants can consider. Like what are the lessons that we have learnt from this case. We also expect to be a great pedagogical tool for postgraduate students, and of course, executive education. Now, the book is quite an expensive one. This is one of its drawbacks, I must say, although, the publishers have given discounts on it. Also, the online version is cheaper, and it is possible to buy selected chapters online. In this way, even to buy the first and the last chapters and maybe one or two case studies is possible. We hope that it would be used by students who will later become business leaders or managers or decision makers, and by postgraduate students who are in executive education and currently present in companies. So, ultimately, the purpose of the book would be to disseminate our ideas in companies.
What are you currently working on, what are your latest research topics?
Well, along the lines of this book, I also do some work at the London School of Economics. I do some supervisions of minor research dissertations for master students. One of my master students, who happens to be Canadian like myself originally, had her research on B corporations. It is a movement that mainly started in the United States, but that is now present in the UK and other countries. These are companies that try to create responsible business. And again, which is important that this is the foundation of their business. The B corporations are certified, and B stands for benefit. It is a very similar genre, if you like, to progressive business models. Beyond that, with one of my CEMS colleagues, we are looking at interviewing leaders of progressive businesses as a research project. Further, Laszlo and I are contributing a paper on Future Earth Leadership to the next Transatlantic Business Ethics Conference in November. This paper draws on the concept of progressive business models and how courageous business leaders with novel vision and moral imagination transform their business organizations to stabilize life-conditions on Earth.
Apart from that, I am also doing some work on professional ethics with accountants. We are planning to understand ethics in financial corporations and the kinds of attitudes you get. Since the financial crisis and all the scandals, people in the financial corporations here and in the US must sign a statement about their ethics and compliance with certain ethical standards. We are going to look at to what extent they identify personally with these statements. Do they see it as personal identity to be ethical or is it just a matter of compliance? We are going to use my background as a psychologist, as I can use various special structured interviewing techniques to try to get deeper, in-depth sort of feelings on identification and so on. In similar vein, a colleague in the Finance area in UCD and I are looking at ethical identity of bankers, taking account of the financial crisis 10 years ago, and how badly Ireland was affected by it.