January 9, 2022

Altruism is Good for Business

The altruistic company outperforms its competitors by doing well by first focusing on doing good. They succeed by prioritizing taking proper care of all stakeholders in its ecosystem.
A Continuing Focus on Altruism

In the blog post last week, the question was asked: Is altruism good for business?  The early indication from the article is that an altruistic approach has wide-ranging benefits for all companies, which is part of what drives the continued focus on developing a humanist manufacturing framework.  An altruism definition from the previous week is “the unselfish concern for other people – doing things simply out of a desire to help, not because you feel obligated to out of duty, loyalty, or religious reasons.  It involves acting out of concern for the well-being of other people.”

“It's actually more than 700 case studies that show that, especially in times of crisis, we show our best selves. And we get this explosion of altruism and cooperation. This happens again and again after natural disasters, after earthquakes and after floodings.” - Rutger Bregman
Are We in a Time of Crisis?

Those who read this content are likely not personally in crisis. While natural disasters may catch our attention for a news cycle, many continue to go about carrying out lives of comfort if there is no direct harm.  However, those impacted by global issues like water contamination and shortage, violence, poverty, inequality, and inadequate access to food would argue that we are indeed in “a time of crisis.”

Why Should Business Care?

A primary reason to care is that business has been at least a contributor in creating or ignoring many of the negative impacts of the previously shared global issues.  Furthermore, while capitalism has benefited, past practices have caused environmental and social harm, more for some than others.  In some cases, there is a desire to adopt a stakeholder capitalism approach to reverse this trend, but that has been hampered by what research found as three pitfalls:

1. Doing good indiscriminately -  Corporate philanthropy and corporate social responsibility are helpful but often fail to leverage the organization’s core competencies. A shift needs to occur to a “better world” purpose to benefit society.

2. Chasing more than one rabbit – A company will be less successful if they choose to maximize profits with a simultaneous objective of also reducing environmental or social harm.

3. Calculating how to do well by doing good – Companies that desire to focus on social value will fall short when trying to figure out how to do well financially while doing good. Social value is then seen as a means to achieve greater profitability, potentially a marketing campaign rather than an actual mission.

The research studied companies defined as altruistic enterprises. Their result was a tremendous economic success through the unconditional respect of their ecosystem members where concentrating on doing good leads to doing well.  When done effectively, what seems like an afterthought – benefiting the community or the planet while mainly focusing on creating, promoting, and expanding your core business – in the end, makes a significant positive impact on everyone, and that, in a virtuous circle, winds up supporting all your core goals.

The Unexpected Benefits of Altruism

Some organizations engage in philanthropy in pursuit of tax breaks or image building to get something back, a potentially selfish approach.  Altruistic companies are finding that an unselfish approach results in the immeasurable improved value of:

1. Community quality of life – Organizations with a culture of gratitude, mainly working with like-minded entrepreneurs, can drive significant change in their community, economy, and workforce.  The result can be a better place to live and work while building lasting alliances that foster respect and community goodwill for companies that engage as civic-minded partners.

2. Employee cohesiveness that lasts – Employees that see their organization as a force for good are more engaged and motivated.  Working together on projects that benefit others allows employees to work as equals while seeing each other in a different setting and light.  These external collaborations can lead to stronger internal teams reaching higher productivity levels.

3. Entrepreneurial philanthropy -  Models of change are improved when companies look with an entrepreneurial eye toward philanthropy improvement, innovation, and opportunity.

A continuing theme of benefitting as an organization when focusing on improving the lives of their stakeholders. Business has long known that “success breeds success.” It is time to recognize that respect breeds respect, that kindness begets kindness, and that improvement generates improvement, and that all of these things too belong to a more extensive, more affluent, more profound definition of “success.”

Image Credit: Karolina Grabowska from Pexels
Successful Companies that Care

When the COIVID-19 pandemic locked down most of Europe and Asia in mid-March of 2020, Sterimed, located in Paris, France, needed masks for its employees.  Sample masks were acquired from one of its Chinese clients leading to the company receiving more than they needed. Their CEO Thibaut Hyvernat called a dozen of his friends to see who could use the extra available masks.  Hyvernat then learned that Chinese was lifting its export ban, and soon his company was providing masks at cost plus an estimated shipping fee for 20 million new friends.  Swedish bank Handelsbanken during this same period, provided emergency assistance without hesitation to a medical ventilator manufacturer to help with the massive surge in demand for components by processing financial paperwork in seven days instead of the usual two to three weeks.  Les Tissages de Charlieu (LTC) developed high-quality and washable mask material in 24 hours while pivoting their production processes in two days to produce 150,000 masks a day, charging only production and shipping costs.  In a time of crisis, these and other altruistic companies could respond in this manner as they were already doing well by first focusing on doing good.   These contributions were continuing examples of how they approach doing business by first doing good, while outperforming their competition.  

Key Takeaway  

A cart ahead of the horse image came to mind when digesting the necessary shift from focusing on doing well to doing good instead of doing good effectively enough to do well.  It would likely be possible to move the cart ahead with the horse behind, but we can understand that it will be better to reverse the position so that the horse is pulling the cart.  Using the same logic, it makes sense that focusing on positively impacting all organizational stakeholders as the right thing to do also improves the company's opportunity to do well ultimately.

First Step

The TEDx Talk on The Science of Altruism by Dustin Daniels shares three items regarding the benefits of altruism.  The first is that human cooperation leads to longevity and survival.  The second is that financial incentives do not motivate people long-term.  The last is that while hard work and talent are essential, we accomplish far more for others by working for altruistic companies.   We instinctually want to be altruistic but face ongoing inaccurate beliefs, keeping us from doing greater good for others.

My Gratitude

I continue to be grateful for companies like Sterimed, Handelsbanken, and Les Tissages de Charlieu that set the bar for high overall performance.  I see a key for each is their importance on benefitting everyone impacted by their organizations.  Hopefully, more companies will learn the value of this approach as it leads to great results for all members of its ecosystem.

Sneak Peek

Next week's blog will integrate humanist principles into leaders’ roles, shifting to understanding the importance of the humanist commitment to critical thinking.

To learn more about our work or read more blog posts, visit emmanuelstrategicsustainability.com.

Cover Image Credit: Anna Shvets from Pexels

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