Infologue.com’s Alex Walker on 9th May attended a panel discussion entitled “From Mission to Impact – “The Benefits of Social business” presented by the Cordant Group and The Social Market Foundation think tank. The event, held at Portcullis House opposite the Palace of Westminster in London, played host to thought leaders and MPs in a meeting and panel discussion debating Cordant Group’s determination to evolve as a social enterprise.
The Discussion and Q&A was chaired by BBC broadcaster and Economist Dharshini David who introduced the speakers, comprising: Eleanor Mills, Editorial Director at The Sunday Times; Guy Opperman, MP for Hexham; Phillip Ullmann, Chief Energiser of Cordant Group; Errol Cohen, Partner at French Law Firm Le Plays Avocat; James Kirkup, Director at The Social Market Foundation.
The panel focused on a paper published by The Social Market Foundation authored by Phillip Ullmann, Chief Energiser of Cordant Group. In the discussion, he outlined the three main pillars to creating a ‘social enterprise’ detailed in his paper:
1) Self-Management – One of the key issues we have is hierarchy, which results from complexity. As a result of hierarchy people in business do not feel like they are in control and that is why so many people at work are disillusioned. With a self-management model, you create teams of 10 to 12 who are self-managing, they have total responsibility within the team. They support each other.
The pivotal thing is the way decisions are made, which is profoundly different. It is not by voting, it is not democracy, it is not consensus or decisive accountability. It is called the Advice Process. What this means is anyone within one of these teams can make a decision but has the duty to consult with two groups of people. The first, are the people impacted by the decision. The second, are those who have advice to offer. The advice process means that anyone in the business can make a decision and the Chief Energiser of Cordant has no more power than anyone else.
2) Wholeness – In business we come to work with a mask, in many cases we cannot behave naturally. Business in an atmosphere of hierarchy is similar to school, in that when you are asked a question you give the answer to the question you think the teacher wants. That is the way we behave. It can crush ideas. People come to work full of ideas and face the challenge “No, that’s not the way things are done here.” Respecting people can dramatically improve the wellbeing in the workplace.
3) Social Mission and Purpose – If you focus purely on money there are shortcomings, as money is a means not the ends. Capitalism gives you freedom, but until you have a mission that drives you, there is no forward direction.
In an opening statement to outline his motives for the initiative, Philip Ullmann commented –
“Society is at a tipping point. At the moment, we are in a worldview based on a fear and scarcity. Everything is about competition, but it is a zero-sum game. I win, you lose. That’s the nature of the exchange and fundamentally that is what is happening. We have tried the state up to 1975 and that resulted in inefficiency. Privatisation has been tried since then till now, again that is not working. The social contract is a zero-sum game … where there are winners and losers. We have to use a model of trust and abundance. When we trust people, we get completely different solutions. What that means is we are moving from a contract to a covenant where you have your identity and I have my identity. We work together for the sake of society and for the common good. You have a purpose and can actually live a much more meaningful life, I think that is the kind of change that social business can bring about.”
The first panel contribution came from Guy Opperman MP, who’s background is that he has presided over a number of DTI cases as prosecutor, he discussed the importance of and led the campaign for the Living Wage. He worked to ensure alternatives to the Payday lenders setting up a cooperative bank in Northumberland and is an admirer of the Social Market Foundation as much as the long-standing examples of social businesses like the Timpsons, Lush or the Co-op that have stood the test of time.
Asked by Dharshini David the Chair, to consider the kind of conditions needed to enable a viable social enterprise, Eleanor Mills from the Sunday Times addressed the distinctive behaviours discernible from successful entrepreneurs. She stated that you are not going to get onto the Rich List unless you have some social capital and social purpose that people can buy into. She cited her young team at the Times who look for shared values in their brands of choice. Increasingly, businesses have to be completely conscious of how their employees are recruited and treated. She said the key issue is how do we get companies to adopt the right frameworks for employment and payment?
Errol Cohen – a lawyer from France says that we have only recently enforced the need for governance in businesses to ensure the right treatment of employees. Back in 2008, the issue was not only was this a financial crisis, but it was also a governance crisis. The questions were about who was directing the company, and who was doing something for the company. And because we changed the rules we lost established companies that had been employing people for hundreds of years.
A challenging question from the audience posed the question about how you measure the impact of this social contribution.
In response, Eleanor Mills explained that the Sunday Times recently published an alternative rich list sponsored by Skoda to propose different ways of measuring wealth and measuring economic impact.
Neil Stewart, Former political secretary of the Labour party, posed a new set of questions related to why this restructure was happening. Explaining that he used to run large social enterprises and therefore wanted to challenge the motives of this transformation.
He explained that while he sees the rage against the corruption in finance and management and understands why people are always looking for alternatives to the Limited Company format, you are still left with the issue of how and when you distribute profits.
Quoting Sir Alex Ferguson – “‘one of his famous phrases If you play for a draw you nearly always lose in the last five minutes’ is completely true in business. That’s why we have taxation to redistribute profits. So, the key question is “Why are you restructuring? Are you trying to solve a false problem by restructuring?” I am in favour of pluralism, and while I am sad about the decline of the mutuals, and I am sad about other kinds of socially owned enterprises I am struck that in other countries like France the regional utilities are owned by regional governments there is a democratic element in it, where is all of that in this discussion?
Phillip Ullmann explained his motives and his position for the restructure by detailing a number of his personal beliefs and experiences gained from running Cordant Group, namely what is important:
● To make changes at the bottom, getting them closer to the coal face
● To get business excited about what it can do about health care and education
● Consider there is no need to confiscate money at state level because you have a mechanism that holds the board to account on a social mission
● To think about a world in which companies like Tesco’s and Amazon had a social commitment – then they are held to account by independent audits and an advisory board, not one that is involved in executive management
● To get younger people excited about this, rather than get the state to control this
● We have to decentralise.
Guy Opperman MP responded by saying that he is in support of anything that promotes social mobility. Choice is at stake, every individual can buy a book from a local store, a small business or from Amazon. “120 businesses in my community won a small business award, we already have a Queen’s Award for enterprise we need one for Enlightened business behaviour – it would be a validation for these changes.”
Sian Williams of the East End Charity against poverty Toynbee Hall asked ‘how will this model be better positioned and measured to deliver, not just for profits but also in infrastructure to have a business impact to make a fairer society? What are the frameworks and metrics that show that business is making a profound change?
Phillip Ullmann responded by saying that is required is “a mind-shift change. People look at the world and are told you need lots of money, and lots of power for a meaningful life. You don’t. You can do with a lot less.”
Panel question – About finance – you may have negotiated with your existing shareholders – how do you get there to change our businesses?
Philip Ullman responded by saying we need to start the conversation in various media, in social media to engage stakeholders and debate until you get their commitment and then hold them (management) to account to build trust.
Final comments from the audience included a contribution from Justine Greening MP related to how initiatives like the Social Mobility pledge can make a difference. ‘The social mobility pledge’ asks businesses to do three things:
● Open recruitment
● Working with Schools
● Opening their doors to apprenticeships.
“We tend to look at businesses as a problem rather than what they should be which is the solution, we need to understand how businesses can really change things for the better. Until we have more bolted down ways to measure it is hard for companies to show what they are doing, and it is hard for shareholders to understand the full benefit.”