Are businesses stuck in a sticky web?
I met Chris outside Great Saint Mary’s Church in Cambridge. He was sitting on a bench tapping away at his laptop when I hesitantly approached thinking “I’m 98% sure that he’s the same guy I know from the LinkedIn photo“. To my relief, he looked up and greeted me with a warm smile before quickly apologising for being dressed in a formal suit from his morning presentation. Chris Marquis is a business professor at Cambridge University with the official title of Sinyi Professor of Chinese Management. What his job title hides is that his real passion is in how businesses can be a force for good in the world. He’s author of the book Better Business, about how the B Corp movement is changing capitalism and he also publishes an excellent newsletter on Social Innovation.
I happened to be in Cambridge for a couple of days and Chris generously made time to give me a little walking tour of the city. It was a beautiful summers morning as we wandered through the ancient streets, weaving between the enthusiastic young students visiting the city for the university open day.
In between marvelling at the incredible history of Cambridge, we talked about some of the challenges of sustainable business and the extent to which businesses can really solve the big issues that we face in society. We both seem to share an optimism that when businesses are run responsibly, they can make a real contribution to a better society. Likewise, we seemed to share a concern that simply running businesses more responsibly won’t be enough to solve some of the big challenges that we are facing as a society. Any progress is good progress, but even the most progressive businesses struggle to align their operations with the needs of a truly fair and environmentally sustainable future.
We ended our walk at the Judge Business School, housed in a former Georgian hospital building that bizarrely (and perhaps brilliantly) has been converted into what feels like a giant children’s toy with a distinctly 90’s vibe. Chris’ office in the new wing of the building is by contrast, a case study in minimalism, with it’s clean white walls and no possessions other than a simple white desk and a white bookshelf holding some copies of his book.
Before I left, I wanted to ask Chris about one last thing. There is a lot of focus on what businesses can change internally to create a more positive impact, but if we look at the bigger picture, are there factors that limit the positive impact that a business can make?
His response was that “Businesses exist in a web of external actors. These include investors, shareholders and even customers”. He explained how even businesses led by people with the purest intentions and strong convictions can struggle to stay true to their own values when faced with the reality of these external forces.
Businesses may take on investment in order to grow, but later find that the investors’ priorities are not aligned with those of the founders or managers, who have now given away some of their power. Even those without this problem are still operating in a world where they need to sell products in order to survive, and while their products might be more socially and environmentally responsible than their competitors, they struggle to escape the reality that they are still manufacturing and selling things in a consumer society. Other external forces can include shareholders, competitors, supply chains, regulators and even our culture as a society.
I found Chris’ description of this complexity as “a web of external actors” to be a very fitting analogy, conjuring up images of a fly stuck on a spider's web. It highlights the reality that while businesses have freedom to choose how they act, they can only move within the confines of the complex web that surrounds them.
It’s increasingly common for businesses to look more broadly at their external stakeholders to see what impact they are having on the world. This is a core principle of the B Impact Assessment that is used to assess companies for B Corp certification. The assessment looks at how a company considers its impact on its workers, suppliers, communities and the environment. This is an essential step forward in aligning business operations with the needs of society and ensuring that corporations are themselves good citizens. However, the way in which a company can impact the world is shaped and constrained by the way that the world shapes and constrains the business itself. Corporate impact is a two-way relationship between a business and it's many stakeholders.
Chris’ term “external actors“ highlights the fact that these outside entities are not passive, but are acting upon the business and exerting forces on it. In order for any business to maximise its positive impact, it needs to work within the unique context in which it exists. The forces from the external actors in its environment will limit what a business can achieve on its own and at times may even pull it off course.
I believe that as we explore how to align business with the true needs of a fair and sustainable society, we need to openly explore these external forces to identify where we are stuck in the spiders web, and how we might free ourselves.