You might ask yourself why someone writing a blog that began by focusing on sustainable manufacturing has spent the last ten weeks writing about humanist commitments. As a reminder, the list of ten is:
During my career, I learned the 5 Whys process. The process is to ask a question about why a problem exists. The first answer may lead to another question. The answer to that question may lead to still another question. The pattern continues until an answer no longer leads to another question. At that point, the root cause becomes apparent, a process that, on average, takes asking "why" five times. For me, the root cause that explains why businesses fail to adopt sustainable manufacturing practices is a lack of proper leadership focus. I have argued that the most successful companies focus on all stakeholders impacted by their businesses, and I suggest now that the most ethical and sustainable companies focus on the human aspect of those stakeholders.
"Our task must be to free ourselves by widening our circle of compassion to embrace all living creatures and the whole of nature and its beauty." - Albert Einstein
I am a big fan of the CBS television series Undercover Boss. High-level executives disguise themselves and take on various lower-level jobs to better understand what is happening within their businesses. The result is generally that the executives find out two things: the first is that things are not going well, with revelations that corner office decisions lead to unintended consequences that negatively impact both the organization and the employees. The second is that many of their employees are struggling at work and in their personal lives since, due to low compensation, they are financially unable to address the challenges they face. Unfortunately, lacking from the show is how executive decisions impact all stakeholders. Thus, the show illustrates how executives fail to widen their circles of compassion even to their own workforces, but it does not even attempt to measure the full impact of what Einstein suggests.
Profit maximization has been a primary historical focus for business leaders, the objective being simply to maximize shareholder wealth with no other considerations. But in 1984, Freeman, now of the University of Virginia Darden School of Business, wrote the book Strategic Management: A Stakeholder Approach. He introduced the concept of "stakeholder theory, which emphasizes the interdependence of society and business and the need for organizations to create value for all who hold a stake in it — not just the shareholders."
A holistic stakeholder perspective is not only a shift from maximizing shareholder value to stakeholder focus but to maximizing stakeholder value. Stakeholder groups include, at a minimum, the customers, employees, government, lenders, local community, owners, society, and suppliers. Others can consist of a board of directors, competitors, distributors, media, mother nature, professional organizations, regulatory agencies, trade associations, unions, the world's ecological community, and certainly not to be forgotten, shareholders. As company owners or high-level executives, it is essential to understand the true impact of our business decisions for all stakeholders, human or otherwise.
Just as the executives in the Undercover Boss series experience first-hand what is happening in their company, that same shift in perspective should carry over to doing the same with all other stakeholders. Industry apparel manufacturers have historically only audited and monitored first-tier suppliers. Patagonia went deeper and found in 2011 that there were multiple instances of worker exploitation, forced labor, and human trafficking at lower-level suppliers in their supply chain. As a founder and accredited member of the Fair Labor Association, it was unacceptable. While publicity was embarrassing to this "well-heeled outdoor adventure brand," they responded by decreasing their number of first-tier suppliers, strengthening their social responsibility office, and contracting with Verité to increase the number of audits at all levels of their supply chain. On discovering these deplorable human practices, Patagonia might have ignored the issues or focused primarily on public relations; thankfully, they chose instead to work to eliminate them, and in doing so offer an excellent example of valuing all stakeholders
Humanism, which the American Humanist Association defines as "a progressive philosophy of life that, without theism or other supernatural beliefs, affirms our ability and responsibility to lead ethical lives of personal fulfillment that aspire to the greater good." If you believe in theism or other supernatural beliefs like me, that part of the definition could be alarming. However, I am comfortable with the balance of the description that fits the intention of the humanist manufacturing framework. Generally, the focus in our manufacturing plants is to achieve business objectives while complying with company values and beliefs and not whether or not our coworkers practice particular religious beliefs outside of work.
Since humans have existed, so have philosophers who espouse society's need to integrate humanist principles. One could argue that not listening to these philosophers has seemingly led to some level of failure where global wellbeing suffers from environmental and social harm. Unfortunately, the business sector has caused some of the damage we see in the air, soil, and water pollution, climate change, global warming, income inequality, and wildlife destruction. The intent is not to pass judgment as these results were generally considered appropriate practice. However, I believe that failing to take responsibility for our current practices and choosing not to improve upon them is no longer an acceptable option.
In her book, Applied Humanism: How to Create More Effective and Ethical Businesses, Jennifer Hancock simplifies the humanism definition to "A commitment that you make to yourself to be a good person." Hancock states that it is our choice to shift from the "false dichotomy" of the necessity of a heartless approach to business to avoid failure. Her book shares many examples that support the reality that this past practice is untrue and without merit. Those that want to learn more about humanism in business would benefit from reading her book.
Calls to inject humanism into business are not new, as found in the article Business Does Not Need the Humanities — But Humans Do. Carvaka, Confucius, Gautama, and Socrates are just a few historical figures espousing humanism or humanistic thought. What is different at this point is that we live in increasingly challenging times that are rampant with opportunities to make a significant difference in improving the wellbeing of others. I am grateful to all authors integrating humanism into the business sector.
Next week's blog will revisit the role of the leader in adopting the humanist manufacturing framework.
To learn more about our work or read more blog posts, visit emmanuelstratgicsustainability.com.
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