After Davos: What It Takes to Achieve Real Change

The modern corporation — larger than most governments — is perhaps the best hope we have to solve grand problems. But business can’t do it alone.

NBS Thought Leaders offer guidance on sustainable business models for the 21st century. Here, Judy Samuelson, Executive Director of the Aspen Institute’s Business and Society Program and Net Impact Chair Emeritus, writes that individual action by companies isn’t enough to solve complex problems. Collaborations — like a recent initiative by Alcoa — show a more effective path.

The news drifted in from the World Economic Forum at Davos, where heads of state and heads of industry meet each winter to tackle Grand Challenges. If you believe the press reports, it sounds as if 2012 was slightly tamer than Davos-past. Parties were smaller and egos a bit more in check — but the challenges still loom large. The Agenda spans the very, very big issues: the global economic recovery, climate change, poverty, security, resource scarcity, and “resiliency” (greater capacity to take the hits that continue to pummel global society).

The big spenders at Davos are the corporate elite — or “strategic partners” in Davos-speak — who underwrite the networking and exchange of ideas each year. Among all the talk and good intentions, one knotty problem persists: given the scale of the needs and the complexity of the issues at play, how will large-scale change actually take place?

One thing is clear. The very same business entities that frequent the mountain need to be at the table in designing the solutions. The modern corporation — larger than most governments, talent- and resource- rich — is perhaps the best hope we have to address problems that span nation states and even continents.

Businesses are Taking Action…

Consider some of the business pronouncements and corporate commitments made in recent years. Alcoa has taken on the issue of recycling at scale. MasterCard is tackling barriers to financial “inclusion”and access to financial services for the unbanked. PepsiCo is focused on water and food scarcity. Companies like Microsoft are becoming visible on human rights. Places like Davos allow business to meet potential partners in the form of governments with the mandate to forge alliances and public-private partnerships for broad impact.

Today, a company’s motivation to involve itself in the kinds of problems discussed at Davos only grows: there is opportunity to link a company’s brand with social goals — the kind of goals that resonate with employees, new recruits, the public and those who offer the license to operate and influence industry regulation. Sometimes a commitment can even deliver top line or bottom line results. For Alcoa, recapturing aluminum is consistent with their environmental goals, but it also delivers raw material with tangible value. This is a good thing.

…But Businesses Can’t Go it Alone

But as important and useful as these gatherings are, let’s face reality. An individual corporate brand rarely matches the complexity of the issue at hand. The value ofan examplar should not be underestimated. But on problems as complex as waste recovery, global warming or human trafficking, government action is also critical. This is especially true for the kinds of policies that influence behavior, set market conditions and raise the bar.

However, in an era where the private sector seems like a better bet than government, what more can business do to move from company initiative to systemic change? Here are two avenues to pursue:

Strategy 1: Collaborate with Other Businesses

One approach is to ratchet up business to business partnership — B2B collaboration. Before Alcoa announced its new campaign, it did something remarkable. It invited other business actors, from competitors to suppliers to soft drink manufacturers to retailers, all of whom have a role to play in the recycling of aluminum cans, to commence an action-oriented dialogue.

To do this well, to get your competitors to play along, it cannot be about your own brand. Alcoa’s action goes way beyond the typical public-private partnership. It has the potential to move the beast. Other companies are working to advance B2B collaborations as well, and smart NGOs today, like Business for Social Responsibility, specialize in industry working groups for that reason.

Strategy 2: Get into the Policy Discussion

Second, business leaders need to raise their voice in setting policy that puts the long-term health of society first. Business is the most influential institution we have. We need business to weigh in on policy if we are to reach large-scale change. And a company that works to burnish its reputation in the press, but fails to stand behind relevant policies that can make the most difference, is likely to be exposed as a fraud.