In a symbolic gesture – reflecting his pledge to extend his hand to nations like Iran who unclench their fist first – President Obama reached out to President Hassan Rouhani in a 15-minute phone call last friday, the first contact at the highest level since the 1979 Iranian Revolution. Then in the same week, the United Nations voted unanimously to support the resolution to disarm Syria of its inventory of chemical weapons. Around the same time, global banking giant, JP Morgan Chase came close to a settlement regarding the bank’s role during the financial crisis five years ago. The settlement, estimated at around US$11 billion, could potentially pave the way for other global financial institutions to come forward and do a similar mea culpa for their role in selling worthless mortgage securities that led to the near collapse of the global financial system. These recent episodes, from politics to business, show how far the world has come: that the actions of any company or nation will come under scrutiny and invite intervention if they do not respect the norms of collaboration and global ethics. The world is increasingly acting as one community; shaped by almost seventy years of dedicated work towards building a united world; led by institutions founded to bring about global action for greater good.
The Structures that facilitate a United World
From the ruins of the Second World War, governments realised the need to have a global institution to help facilitate global action and policy making. The United Nations(UN) was then created for this purpose. Although the structure of decision-making still reflects that of the 19th century – the five permanent members of the Security Council act like an old boys club and has near absolute powers through a veto – the UN has made significant contributions towards shaping mindsets and actions, towards a more united world. Pope Paul VI in his speech to the still young United Nations on 4th Oct 1965, beautifully sums up the important role of the UN when he said: “To the pluralism of States, which can no longer ignore one another, you offer an extremely simple and fruitful form of coexistence. First of all, you recognize and distinguish the one and the other. You do not confer existence upon States, but you qualify each single nation as fit to sit in the orderly assembly of peoples.” This phrase was proven true recently when the UN became the best channel to resolve the Syrian crisis instead of the military campaign – which the US threatened to conduct unilaterally – in order to punish Syria for its use of chemical weapons.
For the business community, global trade has always shaped the nature of commerce. Merchants and tradesmen have traveled across distant lands since ancient times, bringing goods and ideas. Islam and Buddhism for example spread widely in Asia due to the role of merchants who travelled by land and sea to ancient capitals. Companies more than nations are more prepared for a united world as they grew larger and operated in a global fashion. The only major difference in the 21st century is that companies, though global can no longer operate without care for the environment and social responsibility. They can no longer operate in poorer nations to take profit of lower costs of manpower and production without any involvement in their development. They can no longer hide behind the doctrine of shareholders first because it is now about stakeholders too. The internet, as a global communication network has certainly helped global companies understand that they have to be responsible partners in a more united world. A more connected generation of global citizens now consider it their personal mission to persecute companies online if they are found exploiting people and environment for the purpose of profit. Even if these consumers do not necessarily buy products from that particular brand, they will make an effort to voice out their concerns.
In response, the global business community have been on an overdrive in recent decades to be seen as an interested partner for the betterment of the world. Just last weekend in Malaysia – Professor Philip’s Kotler’s initiative -World Marketing Summit(WMS) saw the attendance of almost 600 delegates from around the world. They included many luminaries of the marketing world and other iconic leaders like Dr. Bernard Kouchner, Founder of Doctors Without Borders and Sanjit “Bunker” Roy of Barefoot College . They weren’t there to discuss ideas on how to sell things but rather about how marketing can help to make a better world. Both of us spoke at the inaugural summit in 2012 which was attended by 2,000 delegates and launched with fanfare by the government of Bangladesh. WMS is a wonderful demonstration of how brands are embracing the principles of global ethics and collaboration if they want to be respected as world leaders. The other insight we learned at the summit was: employees of today are in search of meaning and many young talents will prefer an employer whose brand is pro-active in terms of being involved with the community around them.
Emerging consensus on the need for Global Ethics
At different levels from academia to civil society, there is now a lot of literature both online and offline on how nations and companies can act in accordance within the framework of Global Ethics. Although the concept is still evolving and there are a few interpretations, some characteristics have become a reality. Based on Consulus’ work in the region with governments and companies, here are some key principles:
1) The recognition of co-interests
Apple’s commitment to better working conditions and building products that are more sustainable in terms of the environment is a sign that businesses recognize that responding positively to being a responsible stake-holder is good for business. On the political front, Iran’s recent moves to end its isolation came quickly after Myanmar, another country which was considered a pariah state until it ended its own isolation. That governments now clearly see the benefits of being engaged within the global system and believe that it will be fair to them, is a significant shift in mindset. In the past, the fear has always been, if you were to open up, you will lose everything. But China’s evolution as a rising power proves that there is lot to gain if you slowly integrate into the global system. This recognition that we need each other to be better is the best way to sustain the movement towards a united world. Once people feel that they have a role, then the need for conflict becomes less and it will make it easier for the world to deal with more pressing challenges such as the environment, poverty and global diseases.
2) The need for structures that are multilateral in nature
Many people have spoken on the eminent demise of the European Union(EU). But like the United Nations – which has a lot of room for improvement – there is no other mechanism or concept that best enables people to find solutions. Angela Merkel’s recent electoral victory is a vindication of the validity of the EU. She has won on the principle of austerity while at the same time insisting that the EU is still the best mechanism for Europe moving forward. In the business world, global events like the World Economic Forum, Clinton Global Initiative are clear signs that businesses too are increasingly willing to come to these events, prepared with commitments to get involved in solving the world’s challenges. These are no longer talkfests but are becoming structures where solutions are being discussed and then implemented.
3) Building a global identity through mainstream and social media
The independence of media has been an essential pillar in the evolution of the global order. Though in recent years – through mergers and acquisition, – that independence has been in question. It is getting increasingly expensive to maintain a large pool of journalists and then been able to deploy them on the ground to provide insights for the world. This is where social media can play a useful and complementary role. Citizens all over the world from Aleppo to Nairobi are providing real-time coverage of events and playing an increasingly important role as eyewitnesses. Global networks like the BBC and CNN have been quick to partner with locals on the ground and integrate them into their reporting. This means that news is now social and that companies and nations are under even more scrutiny if they report news that do not correspond with the feedback on the ground. This access and immediacy, brought about by platforms like Twitter makes it possible for people to feel the heartbeat of the world. Throughout history, empires have forged a common identity through controlling the media. Now, it is people everywhere that is forging a global identity and forcing governments and companies to fit into this new identity. Sudden pop trends like Gangnam style is an indication of the power of global identity, spread via the combined power of social and mainstream media.
4) The rise of global values
In the process of evolution from the 20th century, a set of global values has begun to emerge and nations and companies are expected to abide by it. The value of collaboration is now seen as the norm and when companies or nations are not seen as being cooperative, they suffer. The unfortunate incident where garment workers were killed due to poor safety standards in Dhaka triggered a world-wide condemnation of the use of low-wage workers for the fashion industry. As a result, the industry had to act swiftly and promise action. Fashion brands who did not sign up to the new pledge were quickly condemned by bloggers and mainstream media.
The other global value is transparency, which is demonstrated through open and active communication. The Chinese government – not very known for this value – recently put the trial of Bo Xilai, the highest government official ever charged since the Cultural Revolution, on TV and online. This was without precedent and was heralded as a step forward for China and it goes to show how global values are quickly making its way to making its presence felt around the world.
The next global value is humility, business and political leaders are now racing ahead to try and demonstrate it. President Obama’s willingness to back down from military campaign and to let President Putin lead is a wonderful display of humility. This is also a value that consumers will resonate with. Business leaders increasingly tout the strength of their team instead of themselves. The move away from individualism towards collective effort will further transform the way we serve and relate to one another.
Preparing for the United World
As the world becomes more integrated from business to politics, companies need to realign themselves to be more ready for this new world. Here are three ways, you can realign to profit from this new world order:
1) A diverse workforce
As more Asian firms operate globally, it is important to be able to groom a diverse workforce. Lenovo’s success as a global PC manufacturer and Tata’s ability to profit from its acquisition of Jaguar and Land Rover, are in part due to their ability to manage a diverse talent pool from both East and West. The advent of concepts like outsourcing and offshoring of work to captive and third party businesses are creating footprints of their production in diverse geographies and cultures.
2) Communicate Values, not just Benefits
Companies that are aligned to the principles of a united world, communicate the global values of unity, transparency and humility. They seek to share experiences of care for the environment and for others. Increasingly companies like Shell and Huawei are sharing stories of their involvement with the community. Professor Philip Kotler highlighted the trend that organizations are shifting from Value-driven Marketing to Values-driven Marketing. Organizations and brands now try to take ownership of being socially conscious towards their customers than being purely driven by benefits.
3) Identify ways to contribute through daily work
Companies of today, no longer see Corporate Social Responsibility (CSR) as a separate programme. They try to integrate that philosophy of doing good into their supply chain or daily work. Chipotle, a US brand known for mexican food is also the largest buyer for organic produce and family-farmed animals in America. They seek to discourage waste that comes with an industrial ranch and advocate a more sustainable way of growing food in the world.
Organizations are now graduating from CSR towards being socially good businesses. We see this emerging in Sri Lanka through the concept of ‘Garments Without Guilt’ which aims to give the seal of conscience that no cheap or child labor was deployed in the supply chain. This is in response to global brands who now desire to project the image of being ‘responsible corporate citizens’. All these are positive signs of a different world, one that will be more united and geared towards the betterment of society.
This article is part of a weekly column called Shaping the World where Lawrence and Shiraz share insights and ideas about building innovative Asian Brands. It is published by one of the leading dailies in Sri Lanka, Ceylon Today.
Lawrence Chong is the CEO of Consulus, an innovation consultancy specializing in helping Asian companies transform their business models to rise up the value chain through business design, organisational development and designing new brand experiences. Consulus’ country representative in Sri Lanka is Shiraz Latiff who is also the CEO/Lead Consultant of Hummingbird International, a regional knowledge house specializing in coaching, consulting & outsourcing through global partnerships & collaborations.