Mallen Baker says that compromise is an essential art in business

Mallen Baker says that compromise is an essential art in businessHere in the UK, we have a coalition government for the first time in 70 years. The Liberal Democrats, who want a form of proportional representation that would deliver a coalition far more often than elections currently produce, have suddenly found themselves as part of just such an outcome.

And this means you compromise. You get some of what you want, and the other side gets some of what they want.

Some of the Lib Dems’ activists – but not many – have left the party in disgust, but the current coalition was always the logic of its position.

It is a reminder of just how difficult the reality of compromise can be for many people.

If you have a values-driven business that has a global presence, you will already be familiar with this. If you face difficult dilemmas and want to achieve the best social outcomes, you will be familiar with it as well.

And if you deal with certain campaign groups that are more interested in scoring points than in changing behaviours, you will recognise the activists’ mindset above.

Take, for example, a number of companies that own subsidiaries in different parts of the world. The UK arm may be (and often is) a leader in social responsibility. It may be widely acknowledged as such. But it also owns companies in Russia, China or Kenya. Its companies there are simply not able to match the standards of the UK firm.

Why not? Because the customers don’t see the value of ethical products, and won’t pay a premium. Because the supply chains are so poorly developed, it is difficult enough to get sources of materials that are legal, never mind Fairtrade, or FSC accredited. Because the firms were acquired recently, and start from so far back, and have leaders that don’t get the message.

The best solution? Create minimum standards for all of your companies, and then identify a route map for them to move forward from where they begin – recognising that they begin in different places. You may not be able to have all your businesses operating to the same absolute standards, but you can aspire to have them all hitting the same relative standards.

Broad leadership

That is to say – if you are the sustainability leader in one market, you should aim to be that in all your markets. Accepting that means different things in practice, but the direction of travel is the same.

It is the logical position for a global group that takes sustainability seriously, and wants to lead the pack not follow the pack.

Some people, of course, will cry hypocrisy. Fact of life. They will say any evidence of difference is tantamount to greenwash – now one of the most misused terms in the English language.

Then there are the businesses that have to resolve dilemmas that some people think are really easy. Unfortunately, different groups of people come to totally different conclusions about what that easy resolution actually is.

Child labour is one. You know your customers will be disgusted with any suggestion that there is child labour in your supply chain. But at the same time, you also know that simply pulling support from factories where it is present may lead to worse outcomes for the children concerned.

There is a pragmatic solution to this, if you’re prepared to put some community investment into ensuring that children in those areas get access to schooling. But they still leave you open to a charge of tolerating some degree of child labour.

And for many people in your home market it is a simple equation. Child labour is wrong. Every time. Or, if you are Google: censorship is wrong. Every time.

The logic of stakeholder engagement for businesses is that compromise is possible, and often the most desirable solution.

But you need to distinguish between the stakeholders that are interested in merely sloganeering, and those that actually want to influence real world outcomes for the better.

The ones that are not serious are those that write reports full of rhetoric, short on fact verification, and failing in any dialogue with the target of the report to give them the chance to respond to allegations made.

The ones that are serious engage. Why? Because they are focused on behaviours that need to change, not on companies they want to hurt and defeat.

Companies should focus on the serious change agents – and accept that in so doing both parties are likely to end up in the arena for compromise.

And remember, compromise is hard. Expect it to hurt.

Mallen Baker is founder of Business Respect.
mallen.baker@businessrespect.net
www.businessrespect.net