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Thursday, October 1, 2009

Ethics-driven companies are new vanguard

Toronto's Globe and Mail newspaper published a book review yesterday (Sep 30/09) that illustrated how conscious companies can outperform their un-guided competition.

... values, when followed, allow them to outpace competitors by helping the firms be more innovative, grow through mergers and acquisitions, attract talent, deal with diversity in an era where that is crucial, and confront the dark side of globalization.

Special to The Globe and MailLast updated on Thursday, Oct. 01, 2009 03:04AM EDT

SuperCorp By Rosabeth Moss Kanter
Crown, 319 pages, $32

When the tsunami hit Southeast Asia in 2004, IBM employees in the region headed for the affected areas to see how they could put their data-processing skills to work to assist the relief effort. The mandate was to serve, not to make money - then or in the future - from emergency relief.

When executives at Brazil's Banco Real noticed a group of employees from an external cleaning company having lunch amid fumes from car exhausts in the garage at headquarters, they could have ignored it. But the company's core values of treating people properly were violated, and so the bank convened all of its suppliers and asked for their assistance in meeting higher social justice and environmental standards, not just at that garage but in all their activities.

When new media communications purveyor Digitas released miserable second-quarter results in 2006 and its stock collapsed, the chief executive officer received an e-mail takeover bid from a large marketing firm effectively saying: Now that you are at a price which is affordable, we should start speaking.

But Maurice Lévy, CEO of Publicis Groupe SA, who had also been courting Digitas, backed off from his pursuit with an e-mail saying, "I'm sorry. It's so unfair that you are hurt this way because the parameters remain very good." When Digitas started to recover, he initiated a conversation that led to a deal.

IBM, Banco Real and Publicis are three of the companies that Harvard Business School Professor Rosabeth Moss Kanter has been tracking for the past three years because she believes they offer a new model for success.

She calls them "vanguard companies," and, at the heart of what makes them special, is that they have strong, humane values and follow them despite the temptations in a fiercely competitive capitalist world to do otherwise.

Full article on ethical companies at Globe and Mail official website

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