Giving Thoughts

Aug
12
2014

Mixing Business and Social Good Is Not A New Idea

By David Burkus, Assistant Professor of Management, Oral Roberts University

More and more business schools are building programs to support students who want to do business while doing good. In addition, companies are rebuilding their recruiting processes to attract top talent that cares less about financial rewards and more about social impact. It seems like every day I see a new blog post from a thinker or business leader discussing how to innovate a process or build a whole new business model to make a profit and a difference. One key theme in these conversations, even if unspoken, is that this is a new, unexplored territory for both entrepreneurs and established businesses.

It may be less explored in our post-1980’s, “greed is good” world, but it’s hardly new.

Business history is filled with stories of businesspeople who were determined to create a better life for their employees or their community. Less than 100 years ago, chocolatier Milton Hershey transferred his majority ownership of the Hershey Chocolate Company to the Milton Hershey School Trust, which provides education and homes to children from low-income families or with social needs. The Trust and the School still maintain the majority of voting shares in the company to this day. Instead of a company owning or funding a nonprofit foundation, Hershey built a model where the nonprofit essentially owns the company.

A few decades earlier, in Ireland, Arthur Guinness and the Guinness family began an ambitious employee welfare program unparalleled by any other business at the time. Even in the 1860s, the company provided pensions for employees, their widows and children, with free meals given every week to the sons of pensioners and widows in order to encourage the children to attend school. The company worked to improve the living conditions and tuberculosisoutbreak suffered by its employees, their families and the famine-ravished Dublin community. The company hired physician Sir John Lumsden and funded a two-month study of employees’ families before eventually building a program that included sanitary housing for employees, as well as nutrition and cooking classes, all aimed at not just improving employee health and productivity, but influencing the entire city to make the needed changes to improve overall health in the city of Dublin.

If you look even further into history, thousands of years earlier, you can even find this urge to care for the poor built into ancient societies and religions. In the ancient Hebrew tradition for example, farmers and landowners were encouraged to adhere to a principle called gleaning, outlined in the books of Deuteronomy and Leviticus in the Torah. According to the principle, farmers left the corners of their fields unharvested, in order to provide for the poor, widows, or wanderers who could come and harvest the remains. While the specifics around gleaning changed with time and cultures, all variations promoted the idea that owning an asset also carried with it the responsibility to care for those without such means. Thus, built into the business model of harvesting was a system for providing for the needs of the community.

These are just a few of the historical examples that give the lie to the notion that all a business exists to do is create a profit for its owners. There’s an old saying that “history doesn’t repeat itself but sometimes it rhymes.” Today’s upsurge of enthusiasm about creating shared value—not just shareholder value—is a great example of this phenomenon. Let’s not forget our history of kindness again.

This piece was originally published on Harvard Business Review and The Conference Board Human Capital Exchange.

About the author:

David Burkus

David Burkus
Assistant Professor of Management
Oral Roberts University

David Burkus is the author of The Myths of Creativity: The Truth About How Innovative Companies and People Generate Great Ideas. He is also founder of LDRLB and assistant professor of management at Oral Roberts University.

 

 

 

 

 

 



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