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The forgotten value

And its increasing relevance in our political and economic circumstance.

SWELLENDAM – “I don’t care!”

That’s how Net1 CEO, Serge Belamant responded to a question on whether the national budget could accommodate an increase in their charges for extending the Sassa social security payments.  “It’s not my problem,” he told an eNCA reporter.

Those first three words not only tarnished his own brand, but added a further blemish to business generally. They were more harmful than the racial spats and social media furore around colonialism because they played into the hands of the anti-free enterprise rhetoric where they added another layer of fabricated malevolence to the “white monopoly capital” bogeyman. In turn they make populist politicians increasingly immune to the fragile business, fiscal, monetary and investment environment.

That is the first context: the need for business leaders at any level to be aware of the extent to which business itself is in the middle of a deepening populist political divide that has become detached from logic. Frankly, business should have been outraged. That it was not, speaks to the second context: which is confusion around purpose.

For decades since the early 80s business has adhered to a near exclusive profit purpose in line with Milton Friedman’s statement that: “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits”. Belamant could clearly argue that he stuck to that guideline. The fact that his main shareholders – Allan Gray at home and the International Finance Corporation in Washington took issue with him, demonstrates a new business context reflected in King IV: creating value for all; inclusivity; and stakeholder cohesion. In the Contribution Accounting Methodology, I argue that even those dimensions are subservient to one super-ordinate existential purpose: that of serving customers. Here Belamant breaks a cardinal rule by implying that a customer’s problem is not his or his company’s. Compounding the irony is that his major shareholder represents organisations who profess to be guided exclusively by the customers’ needs; in this case social grant recipients.

This gives another intriguing context, or question. Is there a continuing rift between shareholders and the executive? Are they caught on opposite sides of the short-term profit maximisation requirement and the longer-term sustainability argument?  As long as executives reflect an agency system with skewed short-term incentives, that ambivalence will remain. It then spills over into forked-tongue messages between executive and staff and between the company and its customers.

All of the above can be captured in the most important and overriding context of all: the human moral compass and the values it reflects. Here we can find a peg to the values fought for in the French revolution and that informed many a modern constitution, including our own. The clarion call for: Liberty, equality and fraternity, inspired many subsequent civil uprisings and rings familiar in South Africa even today.

Each element can be unpacked from various perspectives, which is way beyond the confines of this article. What is the most intriguing is the near exclusive attention given to the first two tenets – that of liberty and equality – and the third, fraternity, is seldom discussed or aspired to. It can be described as the forgotten value. That is most likely because it has been seen in a narrow context of “brotherhood; solidarity or comrades-in-arms.” It finds further succour in collective identities such as nations, patriotism, race, teams, families, etc.

But of course it can, and should be extended to give it far greater validity and relevance. The French, and other revolutions, would have gained much credibility and aspirational clout by embracing empathy as a whole, and indeed replacing the word fraternity with empathy.

The fundamental importance of empathy to human survival has been argued over for centuries. It is self-evident that without a very large measure of empathy between our fellow creatures, humanity would simply self-destruct. I have argued the business case for decades, including in my last two books. The power of caring in business – as a sound business principle and not merely as PR spin – has been virtually ignored as companies hold on to familiar shareholder value criteria. The exasperating mischief that they then continue to make, is to argue that caring in business somehow implies sacrificing profitability. That is such nonsense. It ignores that value added, or wealth creation itself, is the outcome of contribution to another – irrespective of the motive of the contributor.

We are faced with two business perspectives: one that leans towards profit and survival, and the other towards service and empathy. One based on a profit/cost understanding and the other on a wealth-creation/distribution paradigm. A comparative analysis between the two was done in this Moneyweb article. There is clearly a lack of appreciation of the benevolent existential underpinning of all transaction. Indeed, counter-intuitively to that, much effort has been expended on arguing the case for the self-gain/profit driver as the catalyst for success.

What is missing is comprehensive research and analysis on a global scale of the calculable harm that this driver has done – harm that could have been avoided and massive costs saved by applying empathic, values-driven criteria. It certainly could have saved Net1, Ford, Samsung, Volkswagen, Barclays, and many, many others, much soul-searching, financial losses and brand tarnishing. (See Fortune magazine scandals of 2016 here.)

The fact that without empathy or caring for each other, our species would become extinct should inspire us to pursue it as a value at all levels in our existence.

It should become a national aspiration. Because it is the ultimate game changer.

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