Can Social Technology Help Reinvent Business?

Facing a crisis of corporate meaning, companies and their leaders must pursue a new definition of value.

From Occupy Wall Street to the publication of resignation letters in the New York Times, we cannot ignore the widening “trust gap” between business and society. Increasingly, consumers and citizens are demanding that companies match their actions to their words. Integrity must incorporate the values and principles of stakeholders, including society at large. Our current crises – referring not only to financial ones – are not the result of unforeseen disasters or natural market cycles. They are the result of our behaviour.

The crisis of capitalism is one of character and meaning. Employees now want a purpose beyond profits and consumers are courting the companies they believe are conscientious. The Harvard Business Review is even espousing happiness as a new economic paradigm. Being “in search of excellence” no longer suffices. Now companies and their leaders need to pursue significance.

Achieving this vision requires innovation in two key dimensions of our economy: what we consider to be “value” and the values that guide how we create it. We need a more inclusive definition of value, one that is respectful of the needs of all stakeholders, fully aligned with values and transcends the merely transactional.

The challenge to the broad adoption of such values is that for a long time, notions from the 19th and 20th century were used to measure the success or failure of growth and productivity. We have become adept at managing and measuring “how much”, as in “How much GDP?” or “How much debt?” Today, however, “how much” matters less than “how”: how we think, behave, lead or govern. We need new metrics to help us create the kinds of organizations, societies, institutions, governments and businesses that will mirror our deepest values.

At the macro-economic level, Bhutan’s Gross Happiness Index, as an alternative to the Gross Domestic Product (GDP), has gained many admirers. The French and the UK governments have begun to emulate it. Supra-national organizations and NGOs, such as the New Economics Foundation in the UK, have long been proposing new indicators of economic progress grounded in the belief that we need a more holistic, integrated understanding of the economy, instead of one based purely on financial terms.

At the corporate level, social media and social networks have disrupted traditional paradigms of productivity and organizational behavior, and enabled participatory models of value creation that fully harness human potential. Consequently, the social enterprise of the 21st century will recognize and maximize social capital – in other words: talent, within and without the organization – as its key asset.

This rise of “talentism”, the need for a real understanding of the common human values that connect organizations and individuals is increasingly important. Transparency, inclusivity, inspiration and organizational responsiveness are crucial to nurturing the social fabric of businesses and to facilitating collaboration and the spirit of empathy.

Bolstered by social technology, we have the potential to unleash the humanity inherent in organizations to change the world in positive ways. We have the opportunity to shape modes of behaviour that create competitive advantages and sources of growth in this new era. We can change business from within.

Dov Seidman is the Founder and CEO of LRN, which helps companies foster values-based cultures and inspire principled performance in their operations. He is also the author of the book How. Tim Leberecht is the CMO of frog and publisher of design mind.

This article was original published on the World Economic Forum’s Forum:Blog.

[Image Credit Bigstock.com]

Reinvent Business

About

Reinvent Business challenged creative minds from across design, technology, business and academia to build a more human and truly social enterprise. For two days, 150 change-makers gathered in frog’s San Francisco studio to rapidly ideate, design and build software concepts and prototypes with the potential to transform business from within. By translating abstract values into concrete workplace experiences, the 20 concepts below enable companies and the people within them to unlock their human potential, make better decisions and create a positive impact on our world.

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