Ethical Performance
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defining the qualities of the coming ‘citizen CEOs’

October 2001

Multinational companies are increasingly being forced to respond to challenges to the way they operate around the globe. EP talks to John Elkington about the measures required to meet these challenges

John Elkington’s foresight is demonstrated by the fact that the consultancy he founded in 1987 was named ‘SustainAbility’ before the concept was as widely current as it is today. The author of several influential books which have helped to define the role of business in its progress towards sustainability, he is also credited with inventing the term ‘triple bottom line.’

In his latest book, The chrysalis economy, Elkington is now warning that even progressive companies may not survive because they will not be able to cope with the scale of the transition to what he describes as the new economy.

Today he seems less patient, more apocalyptic than in the past. But in the wake of the destruction of the World Trade Centre in New York, the world may be more receptive to apocalyptic messages.

Elkington believes that the sustainability agenda will deliver its own huge challenges. ‘The capacity of business leaders to manage the shock will be fundamental’, he says.

The atrocities in the US provide a stark backdrop to his argument, which is concerned with some of the same themes, though on a less extremist level.

Business values and the values of society are clashing, Elkington believes. ‘Different value sets are pushing back, not so much against globalization, but americanization. The capacity of business leaders to articulate the challenge and understand how to deal with it is becoming increasingly important’, he says.

Shell, Nike and Monsanto (Elkington has worked with all three) are the most obvious examples of how this conflict of values can affect companies. But their experiences only hint at the complex issues which businesses will have to address if they are to survive, including climate change, biodiversity, social equity and human rights.

‘We’re going into a 30-year period where a series of constraints starts to operate. The issues facing us now are multi-factor challenges which are much harder to address than before – you can’t just do something like add a catalytic converter’.

Elkington argues that a special breed of chief executive officer is required to meet the challenge of combining value creation with respect for human and social values. He describes this as the ‘citizen CEO’ who will need to:

develop ‘peripheral vision’ in order to understand and manage human, reputational, social and other forms of capital

be sensitive to the company’s impact on society

be able to adapt to emerging values, and not just meet formal regulations

integrate triple-bottom line thinking throughout the business

appreciate diversity.

The book sketches five labours for these Herculean types. Matching the Greek legend, they begin with cleaning the Augean stables, which equates to dealing with the company’s legacy. The citizen CEO must then internalize the sustainability agenda, tame (rather than behead) the multi-headed Hydra of stakeholder groups, and enlighten the ‘underworld’ of the financial markets. The final labour is to refill the cornucopia, creating a business world which serves the earth’s 8-10 billion population in a sustainable fashion.

It is something of an understatement to say these are not easy tasks, and the author does not underestimate the difficulties. ‘Many large companies don’t have the capacity to transform themselves on the scale required. CEOs are too locked into their existing ways or too unimaginative to see what’s going to happen’, he says.

‘Companies find it incredibly difficult to cannibalize existing businesses. New approaches will be enormously disruptive but people get frightened because they see it will knock profits in the short to medium term.

‘The challenge can be met, but there will be a lot of failures.’

If Elkington’s vision is as penetrating now as in the past, it sounds like business can expect to face further difficult challenges in the coming years.

The Chrysalis Economy is published by Capstone, £20 UK, $29.95 US


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