Amazingly, all the McDonald’s restaurants within that devastated area were untouched. They stood as unscathed beacons in the midst of the blackened ruins.
Obviously the question arose: Why would the McDonald’s buildings be left standing when nearly everything around them was destroyed? The responses of local residents carried a common thread: “McDonald’s cares about our community. They support literacy efforts and sports programs. Young people know they can always get a job at ‘Mickey D’s.’ No one would want to destroy something that does so much good for us all.”
McDonald’s sense of social responsibility created societal trust, and that trust produced clearly observable and measurable results.
Every kind of peaceful cooperation among men is primarily based on mutual trust and only secondarily on institutions such as courts of justice and police.
—ALBERT EINSTEIN
FISH DISCOVER WATER LAST
Perhaps you’ve heard the French proverb “Fish discover water last.” But have you ever really thought about what it means?
For fish, water simply is. It’s their environment. It surrounds them. They are so immersed in its presence, they’re unaware of its existence—until it becomes polluted or nonexistent. Then, the immediate and dramatic consequence makes it quickly apparent that quality water is absolutely essential for their well-being. Without it, the fish will die.
In a similar way, we as human beings discover trust last. Trust is an integral part of the fabric of our society. We depend on it. We take it for granted—unless it becomes polluted or destroyed. Then we come to the stark realization that trust may well be as vital to our own well-being as water is to a fish. Without trust, society closes down and will ultimately self-destruct.
[C]ommerce dies the moment, and is sick in the degree in which men cannot trust each other.
—HENRY WARD BEECHER, NINETEENTH-CENTURY AMERICAN AUTHOR
This pervasive nature of trust is why, as I said in the very beginning, it is the one thing that changes everything.
Just consider a small example. When we drive our cars, we trust that other drivers on the road are competent and that they will follow the rules, that they aren’t out to do us harm. But what happens if you live in a society where every time you go out to get in your car, you have to worry about whether the car has been wired with a bomb, or whether other cars on the road might explode or other drivers might purposefully crash into you? Or what happens if—as was the case several years ago in the Washington, D.C., area—you have to worry about a simple act such as getting out of your car at a gas station, fearing that doing so might put you in the scope of a deadly sniper?
It’s hard to even imagine a world without trust. As Thomas Friedman contends in The World Is Flat, trust is essential to a flat or open society. And the principal aim of terrorists is to destroy that trust. It’s to make us fearful of doing the things we do every day. While a flat, open global economy thrives on behaviors such as talking straight, creating transparency, righting wrongs, practicing accountability, keeping commitments, and extending trust, a closed, terroristic society thrives on counterfeits and opposites—on deception, hidden agendas, justifying wrongs, disregarding commitments, blaming others, and trusting none except those in an elite “inner circle.” Even then, trust is fragile and is subject to the whims of those in charge.
To beat back the threat of openness, [terrorists] . . . have, quite deliberately, chosen to attack the very thing that keeps open societies open, innovating, and flattening, and that is trust.
—THOMAS FRIEDMAN
Just think about the taxes imposed in a closed, low-trust society. Then think about all dividends—such as shared knowledge, medical breakthroughs, technological advances, economic partnerships, and cultural exchanges—that are not available to a closed society.
In a high-trust society, there’s more for everyone. We have more options and opportunities. We interact with less friction, resulting in greater speed and lower cost. This is why our opportunity to build a high-trust society is so meaningful. There is nothing we could do that would so dramatically impact not only speed and cost, but also quality of life for everyone on the planet.
THE PRINCIPLE OF CONTRIBUTION
The overriding principle of societal trust is contribution. It’s the intent to create value instead of destroy it, to give back instead of take. And more and more, people are realizing how important contribution—and the causes it inspires—are to a healthy society.
Just consider all that is taking place, from individuals seeking to make a difference in their own sphere of influence, to corporations accepting the responsibility to serve all stakeholders (not just shareholders), to entrepreneurial organizations whose primary purpose is to serve societal ends.
It was exciting a few years ago to see that Time magazine named Bill and Melinda Gates and U2 lead singer Bono, as “Persons of the Year,” not for their talent, skill, innovation or professional success, but rather for the enormous investments they had made in both time and money to improve the health, education, and welfare of impoverished or less fortunate people around the globe. The Gateses had set up the Bill and Melinda Gates Foundation for this purpose, and within two weeks of setting it up, Warren Buffett announced that he would give $37 billion (84 percent of his net worth at the time) to charity, $30.7 billion of which would go to the Gates Foundation. As I mentioned earlier, since then Buffett and the Gateses have established The Giving Pledge to encourage other billionaires to give away most of their wealth in similarly serving worthy purposes in society. As good as Bill Gates’ first act was as founder and CEO of Microsoft, his second act in doing humanitarian good around the world is widely perceived as even better.
Another great contributor to society whom I deeply admire is Buckminster Fuller, inventor and architect of the geodesic dome. One of his protégés, Marshall Thurber, told me that when Fuller would receive his royalty checks (one of which was for $1.2 million), he would pay the bills for his company and then give the rest of the money away. In fact, Thurber said, Fuller would frequently write his checkbook down to zero. Fuller maintained, “If you devote your time and attention to the highest advantage of others, the Universe will support you, always and only in the nick of time.”
Though these are examples of high-profile individuals, the great bulk of contribution that is woven through the fabric of society is made by individuals contributing in communities throughout the world. Thousands of doctors and nurses donate their time and means to perform medical surgeries to correct physical deformities in children and adults in developing countries. Many from all walks of life donate money, time, and other resources to help victims of disasters, such as tsunamis, fires, floods, hurricanes, earthquakes, mudslides, and other calamities worldwide. In local communities, people volunteer their time and energy to further causes such as literacy, health, education, and social welfare, including helping the homeless and victims of spouse and child abuse.
Just think of how diminished our society would be without contributions such as these! And think of the impact contributions such as these have on societal trust!
My purpose in this chapter is not to present an impractical, utopian, or political view of the world. It is simply to focus on the pragmatic benefits that flow and the trust that emerges from the principles of contribution and responsibility at the societal level.
THE PRINCIPLE OF CONTRIBUTION IN BUSINESS
Today more and more businesses, as well as individuals, are recognizing the value of contribution. Many businesses are structured to contribute to others on a regular basis, such as Newman’s Own products (established by actor Paul Newman), which has generated profits in excess of $500 million, 100% of which has been donated to charities. Corporate Responsibility Magazine annually publishes its “100 Best Corporate Citizens,” which recognizes companies that serve all stakeholders with transparency, responsibility and accountability. In 2017, corporate giants such as Intel, Campbell Soup, Cisco and Lockhee
d Martin were all in the top 10. We’ve also seen the rise of social entrepreneurship as a means of bringing about potentially transformative societal change. The Skoll Foundation, whose vision is to “live in a sustainable world of peace and prosperity,” has created the Skoll Award for Social Entrepreneurship (SASE). Several recipients are chosen each year to receive these $1.25 million awards—social entrepreneurs “whose innovations have already had significant, proven impact on some of the world’s most pressing problems.” Through these awards, Skoll invests “directly in the promise of even greater impact at scale.” These awards have now helped to expand the work of some 122 social entrepreneurs and 100 organizations on five continents. While many meaningful contributions still come in the form of the industrial age notion of philanthropy—of earning profits and then donating money to worthwhile causes—the trend today is turning toward the collaborative age paradigm of global citizenship (also called social consciousness, corporate citizenship, corporate social responsibility/CSR, and most recently, conscious capitalism). This approach includes traditional philanthropy, but it also integrates the social and ethical agenda into the very fabric of the business. Doing good is no longer seen as something in addition to business; it is a part of business itself.
There has been a tendency in the business world to confuse citizenship with philanthropy. They’re not the same thing. Enron was a great philanthropist, and clearly, it was not a good corporate citizen. The heart of global citizenship is about ethics and conduct. It begins with the way a company thinks about its role in the world. Does it simply exist to make as much money as possible?
—DEBRA DUNN, STANFORD UNIVERSITY
Many developments have signaled this shift to global citizenship. One such example is the rise of microfinancing, powerfully modeled by Muhammad Yunus, founder of the Grameen Bank in Bangladesh. This bank was set up to make small loans (usually $50 to $200) to poverty-stricken individuals, 96 percent of whom are women, to help them establish themselves and their skills profitably in the market. Yunus began doing this in the 1970s, and his efforts have spread worldwide with such great success that Muhammad Yunus and Grameen Bank were jointly awarded the Nobel Peace Prize for helping to lift tens of millions of people out of poverty. Today, Yunus is widely considered the founder of the microcredit movement. According to eBay founder Pierre Omidyar, microfinance can have the same kind of social impact that eBay has had on society through hundreds of millions of people learning that they can trust complete strangers.
The microfinancing trend is now beginning to expand into micro-franchising, in which social entrepreneurs are providing education and financing to help others create scalable businesses so they can leverage their efforts, hire others, and make meaningful profits.
One example of a business that is inspiring and creating meaningful contributions to society is Call me—a mobile phone carrier that competes with three other significant market players in the small nation of Denmark, with its population of only 5.7 million people. When Hanne Lindblad became CEO of Call me in 2011, she was faced with trying to succeed in an industry driven by a market focus on being a few kroner cheaper than your competitor and coming up with promotions designed to win customers over from other mobile phone providers. The result was widespread customer disloyalty, an annual defection rate of 4–5 customers out of every 10, and a typical advertising budget of more than a billion kroner a year trying to replace lost customers.
Lindblad decided to get off what she called the “vicious hamster wheel” in the industry and come up with a long-term sustainable strategy. She and her team determined that trust would be the fundamental operating principle of the company. “We wanted to become a trusted company,” Lindblad said, “so we decided that culture should be a thing that we focus on, should be our main building block.”
As the “trust strategy” began to play out in the organization, employees became excited and engaged. In addition, employee trust rapidly expanded to create customer trust, which brought great benefits—especially in terms of customer loyalty. Even that, however, was just the beginning. In the spirit of making a difference, Call me moved into building societal trust. Being in the business of verbal communication, employees noticed that civil discourse was decreasing in Denmark. Rather than waiting for someone else to fix this social issue, the company decided to get involved. They began a “Speak Kindly” campaign, producing TV ads that dramatized the Danes tendency to hurt each other by speaking unkindly and contrasting it with language and behavior that was kind. The ads had no mention of price or promotion, and all the roles were played by Call me employees.
The movement then expanded to include a Speak Nicely, It’s Free Film Studios project to encourage students to tell stories to increase civility and kindness. Hundreds of films were created, making this a topic of discussion in classrooms, board rooms, and family rooms. Call me also worked with family camps to give families a set of tools to improve communication, resolve conflicts, and create a better daily life.
Call me’s societal trust deposits earned great dividends that impacted the company’s bottom line. Within a four-year period, their subscriber base grew by 50% in a declining market and Call me became Denmark’s fastest growing mobile brand—without taking the price leader position. In addition, the company was awarded with Brand Index 2015 by Loyalty Group for the most loyal customers and also for best image in the industry. Besides improving their own bottom line, Call me has positively influenced the behavior of a whole nation.
“INTENTIONAL VIRTUE” AND “CONSCIOUS CAPITALISM”
While we enthusiastically applaud these wonderful emerging efforts, we need to understand that the idea of corporate social responsibility is not new. In fact, it was originally the conceptual framework behind the whole idea of the free enterprise system. Adam Smith, the father of free enterprise and author of The Theory of Moral Sentiments and The Wealth of Nations, taught that “intentional virtue” was foundational to a prosperous economy, and that when a critical mass of people competed for their own best interests within the framework of intentional virtue, there was an “unseen hand” that would guide society in a way that would create prosperity and wealth for all.
During the last part of the twentieth century, however, the “intentional virtue” part somehow got left out, and the message was fatally diluted: “If you simply compete in the marketplace, the ‘unseen hand’ will guide the creation of wealth.” This dilution led to a massive violation of the 4 Cores and 13 Behaviors—to greed, materialism, fraud, falsification, duplicity, and skyrocketing low-trust taxes.
Falsification and fraud are highly destructive to free-market capitalism and, more broadly, to the underpinnings of our society . . . our market system depends critically on trust—trust in the word of our colleagues and trust in the word of those with whom we do business.
—ALAN GREENSPAN, FORMER CHAIRMAN, U.S. FEDERAL RESERVE
As a result—as I said in the first chapter of this book—generally today, low trust is everywhere. But here’s the intriguing paradox: In the midst of this pervasive low trust, a backlash response is creating a virtual global renaissance of trust. More and more, people are coming to recognize the cost of low trust and are making efforts to establish and restore trust. It’s the “fish discover water last” syndrome in action; as trust has begun to disappear, we’re finally recognizing how vital it is to our survival.
Some are even making efforts to replace the fundamental materialistic paradigm with the more sustainable paradigm of contribution. The Acton Institute, for example, has taken on the media representation of business as money grabbing and socially irresponsible, and seeks to bridge the chasm of distrust between business and religious leaders by helping them merge values and resources in ways that build society. Paul Dolan, former CEO of Fetzer Vineyards, urges all businesses to commit to the “triple bottom line,” a measure of corporate success that takes into account not only financials but also social and environmental impact.
; GLOBAL CITIZENSHIP: AN ECONOMIC NECESSITY
Forbes magazine’s James Surowiecki has said:
The evolution of capitalism has been in the direction of more trust and transparency, and less self-serving behavior; not coincidentally, this evolution has brought with it greater productivity and economic growth. That evolution, of course, has not taken place because capitalists are naturally good people. Instead, it’s taken place because the benefits of trust—that is, of being trusting and of being trustworthy—are potentially immense and because a successful market system teaches people to recognize those benefits.
In Megatrends 2010, Patricia Aburdene notes the rise of “conscious capitalism” and its direct connection to the bottom line. She points out that during the period between 1984 and 1999, “stakeholder superstars”—companies that excel in relationships with all stakeholders (as opposed to merely shareholders), including investors, customers, employees, suppliers, and communities—outperformed the S&P 500 by 126 percent. Interestingly, six of the seven megatrends Aburdene highlights in her book have to do with the principles of contribution, value, meaning, purpose, and responsibility that are inherent—both individually and organizationally—in the Fifth Wave of Societal Trust.
A study by DePaul University showed that overall financial performance of CR’s 100 Best Corporate Citizens was also “significantly better” than the S&P 500. In fact, financial performance is now one of the criteria of their corporate citizenship. This is becoming an excellent illustration, at the societal level, of how leadership is “getting results in a way that inspires trust” with all stakeholders.
People talk about businesses needing to be responsible as if it’s something new we need to do on top of everything else. But the whole essence of business should be responsibility. My philosophy is “We don’t run companies to earn profits, we earn profits to run companies.” Our companies need meaning and purpose if they’re to fit into the world, or why should they live at all?
The SPEED of Trust: The One Thing that Changes Everything Page 34