Rinaldo S Brutoco is President of the World Business Academy, which he founded in 1986. He is also Principal of the ShangriLa Group, his private consulting organisation and is co-author of several books, including Profiles in Power and New Paradigms in Business.
The ultimate challenge is to create the global 'family business' focused on improving the health of the global economic system. How can you contribute your business knowledge and finance to the welfare of those in need – and sustain profit?
A family business represents one family, but together, all family businesses are part of the global family. As substantial stakeholders for a positive future, we need not only look to the health of our own business, but to the health of the global economic system. The amount of money that must be made available to respond to the disturbing global challenges we face today is daunting. And sadly, the total amount donated by corporations is decreasing, from an already low rate. We cannot assume that the public sector will provide a social safety net and take care of the problems we face around the globe. Most families with large estates are making choices not just about investment, but also about giving back to the community. How do they make their choices on where to focus their social investments?
A planet in transition
Good news and bad news can travel around the planet unnoticed until something like September 11th occurs. We know that over 3,000 citizens died in the fiery collapse of the World Trade Center. That tragic loss is very much in the foreground of our collective awareness.
Less visible to our collective awareness are even more staggering statistics, such as the fact that 33,000 children around the world die of starvation every day. Why is it that the World Trade Center tragedy focuses global awareness, while other more staggering statistics go largely unnoticed? There is no magic answer to this question, but families and their businesses must be aware of some of the larger global issues, as they decide on how much and where to distribute their social investments. While all money given to alleviate human suffering is well spent, just as business people look at the effects of their business, so donors must look closely at the desired impact of their social investment.
So, where is the good news? Approximately one billion people on the planet are physically better than at any other time in human history.
What has led to this tremendous explosion of global wealth for a privileged minority – including the owners of most family business? Understanding the answer provides a compelling insight into the priorities of human society and the planetary reconstruction of the global 'family business'.
The 'good news' from the perspective of the human misery sustained by over five billion fellow global citizens is that what they need is what the one billion of us who are well off are good at providing. The 'good news' for those of us committed to the cause of global reconstruction is that the wealth we will create for ourselves by reconstructing the planet will dwarf all of the collective wealth we have created for all the generations which have preceded us. The wealth which will be created for individual companies, and for the global business community as a whole, exceeds every period of history. This opportunity to rebuild global society is the ultimate opportunity to do well by doing good.
What do over five billion people in the world need today? Here's a partial list:
- Water: potable water, safe agricultural and industrial water, effective water distribution and delivery systems, even in remote areas.
- Transportation: cost-effective, low impact, non-polluting systems that transport people and goods safely wherever they need to go on a local, regional and international basis. President Karzai of Afghanistan said his country's most basic need was for western help to build roads. He was confident that with a better road network, they could begin to rebuild their devastated society.
- Agriculture: the ability to produce enough food for local populations in diverse climatic regions with a minimum of expensive chemicals and fertilisers.
- Housing: affordable, practical, reliable housing and commercial structures.
- Energy: power generated locally for home and industry that preserves land, air and water quality without the necessity of being distributed over long distance transmission lines.
- Healthcare: medicine and healthcare delivery systems that reach those requiring medical attention.
- Communications: systems that potentially link every individual and business on a cost-effective basis with a minimum of physical infrastructure.
- Technology: information management systems to keep track of people, goods and priorities.
- Banking: the creation of financial institutions that could aggregate capital and deploy it so that wealth creation by individuals and businesses could occur.
- Fuel: abundant sources of sustainable fuel and systems for its use that are not dependent on expensive, self-depleting, polluting hydrocarbons.
As economic conditions improve, the birthrate will fall in inverse ratio. That means that the better the economic situation, the easier it is to improve the situation further as the massive weight of our accelerating global population will fall from our shoulders. Nothing reduces the birthrate like rising economic expectations.
For those in need nothing is unreasonable or unachievable. In fact, everything is in place for some one billion people on the planet right now to improve their standard of living. Even more encouraging is that we know how to deliver all these things, and more, in an ecologically sustainable way. It is finally feasible to change the plight of billions of our fellow world citizens – while generating exceptional profits.
It is no longer a matter of 'how', nor should it any longer be a question of 'why' but simply a matter of exercising the collective will to do it. The crisis in our global family business is a crisis of imagination and commitment. It is not a crisis where we are powerless to act.
Historically, businesses have only focused on the daunting challenges rather than upon the opportunity that awaits. Seeing only the challenges, we experience a sense of being 'overwhelmed' to the point of doubting the feasibility of any proposed solution. Non-action, on the other hand, is not the most appropriate response in light of the opportunities that are immediately present. World business can change lives and make trillions of profits in the process. This makes a programme of social investment by family business owners, among others, the compassionate and single most prudent business strategy they can make.
A 'Marshall plan' for our time
The single most effective strategy undertaken by the Allies following the devastation in Europe created by World War II was launching the Marshall Plan. Paradoxically, in light of a long world history of punishment of losers in wars (including World War I), there was a massive effort to rebuild and to encourage their former enemies to do so. Over protests lodged at home and abroad, the US Congress authorised billions of dollars in financial, material and human resource aid to Germany, the UK, France and others, when hope and self-esteem in those countries were at their lowest. A similar, contemporaneous rebuilding effort was successfully undertaken in Japan. "The Marshall Plan is very much a business plan," concluded Kiplinger Magazine in its 1948 assessment for American businesses. "At its root is an office and factory and warehouse job. The Marshall Plan means work, and you will be one of the workers."
The outstanding success of the Marshall Plan is universally accepted. It also turned out to be the greatest financial investment of all time. The challenge that the World Business Academy has set for family businesses and for other successful businesses is to invest in a new 'Marshall Plan for the globe' that will do for the developing world what the original Marshall Plan did for Europe. For example, a current effort initiated by the Mott Foundation has given funds to a team of expatriated leaders of the Afghan community, who have become successful professionals outside of their native land, to return there and from their own point of view, assemble a plan on how to reconstruct the country. This is precisely the likely outcome of the global reconstruction effort called for here.
The public opportunity
There are both public and private ways that individual companies can participate in social investment on the scale of a Global Reconstruction effort. On the 'public' front, the Omega Point Institute in conjunction with The World Business Academy, the Foundation for Global Community and the Center for Citizen Initiatives is proposing the creation of our generation's Marshall Plan: The Global Reconstruction Fund. The fund would be a non-profit entity, leanly administered according to best corporate practices. It would contract with sponsors of the fund to create the global infrastructure. Funding would come from voluntary contributions of 5% of the net profits of each corporate member wishing to be listed as a sponsor of the fund. The theme of 'taking responsibility for the whole' would be promoted among and by the membership through the display of the fund's insignia, release of information in various media (including the Internet) and in diverse publications. The fund's mission is to support businesses going directly into populations in need, by demonstrating competence in response to requests from developing countries. The Fund will act as a clearing house for those efforts. By effectively by-passing governmental agencies and doing what business does best, ie providing cost-effective goods and services to support a healthy life-style, The Global Reconstruction Fund envisions a corporate response to the planet's infrastructural needs.
The private opportunity
Individual companies and family businesses on their own initiative can participate fully in global reconstruction by finding those emerging or 'sunrise' applications of industry and technology that will provide the greatest good to the greatest number. In doing so, the profits of these individual companies will no doubt exceed those of companies who ignore, or pretend not to notice, that approximately 80% of the world's population is living without the basic fundamentals of human existence. In essence, the private opportunity is to try to furnish what business does best – roads, housing, water, sewage treatment facilities, electricity, food and shelter – at a fair price using sustainable technologies to earn appropriate long-term profits supplying what the world needs. This is the ultimate opportunity to 'do well by doing good'.
Many of these activities are simply not going to be addressed by the government. Recently, corporate leaders, and often their families, have turned their philanthropic efforts to some of these issues. The William and Melinda Gates Foundation, administered by Bill Gate's wife and his father, continue a Gates family tradition of giving with a global thrust. Their commitment of US$600 million each year to world health is more than the US government commits to the same effort. Other visible entrepreneurs like Ted Turner, who pledged US$1 billion dollars to United Nations efforts, and the hundreds of millions donated by financier George Soros to create open societies, have made massive global investments.
The call to action
The business community can change the environmental degradation of the planet. We can elevate the living conditions of all people and we will be able to share incredible profits as we do so. That is the real integration of the new triple bottom line of 'People, Planet and Profits'. Many businesses, including family businesses, have assembled values statements that underlie their work, making commitments to the environment as well as profitability. Social responsibility to community stakeholders is increasingly a business commitment. For example, the Rodale family, who own magazines covering health, environment and nutrition, support global organic farming experiments. These commitments help their core products.
Furthermore, the blessings of future generations will be assured by those of us who choose to act now. Since family businesses are often free from the pressure of immediate profitability to take a long-term perspective, they can be leaders in this area. Several large global business families talk about making decisions with the welfare of the seventh generation in mind. This world will be a healthier, happier and vastly safer place in which to live when the world business community simply concentrates on what it does best, for the highest good of all its stakeholders around the planet. The challenge is to begin to perceive our own enlightened self interest, the enormous opportunity awaiting our individual businesses, in serving the under-privileged masses which constitute the vast majority of our global family. This could be termed the ultimate "family business."
In the words of World Business Academy Fellow, Jean Houston, "These are the times and we are the people." To put it another way, "If not us, who? If not now, when?"