Interview with Nigel Roome Interviewer: Toby Thompson NR Well, I have been a researcher in university and business school now for 30 years and the agenda that I think is important is more about the process, particularly for business school academics about their engagement with business. I think that we, as business school researchers, should be spending much more time looking at companies and working with companies as partners in research and I would call it knowledge development. In particular we should focus on exemplary examples of practice. Why? Because I think then we can take that exemplary practice into the classroom and we can present it to students at Masters, MBA and PhD level and show them what can be accomplished and how it might be accomplished. Why, again why? Because business needs to do much more in terms of corporate responsibility – it needs to move ahead in embedding corporate responsibility practices into the strategy and into the operations of everyday management. That is going to be very difficult because it is a different style of management. Companies I think have been very successful in the boxes of control, in creating alignment around objectives and priorities and goals that are set at the highest level. And the area where they are weakest is recognising that they are a community. We talk about communities of practice, but if you think of a business and its managers and staff as a community and that community is rich with ideas, rich with suggestions about how they might improve small or large parts of the organisation in terms of their environmental and social practice – we need to encourage that kind of emergent idea so that people feel fully engaged and can contribute to the strategy in their own way. That probably means change is ragged and uneven, not everybody will take large steps but small steps added together make for big moves as well. What is this based on? It’s based on vision from the top, it’s based on the idea of participation, the encouragement of commitment and ideas and it is that last area which is the community development side of business organisations that I think is most difficult for us because that is a relatively new model. TT Is that something business schools can help with, or UN millennium development goals can help with? Who is the external impetus there? NR I don’t think it’s the millennium development,goals I also don’t think it is the global compact, I don’t think that is it ISO 1400, I don’t think it is Value SA 8000. It is found in the attitude that managers play to one another. It’s about relationships and for me corporate responsibility is essentially about the management of the relationships of a company around its activities that enable it to continue with its existence. Corporate Nigel Roome
responsibility does not affect the purpose of business, the purpose of business for me is to create value, but there are different ways of creating value. Clearly if you assess the activities that you have, and you see that they can create value but also destroy value at the other side – environmental value or social value – then a sensible company would think about ways that it might innovate to create new opportunities: business models, products and services, that create less damage and that I think is the challenge for corporate responsibility and for the leaders and employees of companies. TT To critics that say maybe, for instance, organic; purchases of organic are going down with the downturn that we are having right now in the economy, that CSR is an option thing; what do you say to those critics? NR Well, clearly companies appeal to their consumers and say if the market doesn’t want it then we are not going to be able to provide it, but that has not been an inhibitor to innovation. The market didn’t necessarily say that it wanted the IPod, but in developing the product in a way that the market would accept the IPod has replaced many other forms of personal music and entertainment. So the market didn’t know that it wanted it, and it was offered to it in a way that created the market. Businesses have invariably created markets through their innovation and that I think is the difference between an idea and an innovation – an innovation is an idea which finds people who want to adopt it, otherwise it is simply a patent. TT So then what role is there for research into CSR? Does research not all of a sudden seem particularly irrelevant to the day to day activities of top boards in implementing CSR in organisations? NR I think there is a very important role for research and the importance of research is that it helps to understand the processes of change which enable an organisation to move from an organiser and producer of products and services that are less sustainable, to an organisation that is more sustainable. So how do you engage in that process of change as a company? What works, what doesn’t work? How do you scale it up? How do you introduce it and embed it across the organisation, especially if it is a multinational organisation operating in many locations? And research, I think, has a role to identify what works and what doesn’t work and to feed that back to companies and managers of companies. To take what happens in one organisation, show it through management education, so that managers can go and practice it in their own – if there is the support for that type of transition. TT Support being from? NR From the organisation that they go back to that has sent them to an Page 2
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executive development course or sent them on an executive MBA or other forms of education. It’s also critical in the in the more bread and butter work of management schools and MBA work, Masters programmes or Bachelors of management who will be training managers of the future. And one of the things that I say to my students who are at the Bachelors level because I teach Bachelors and Masters and MBA and PhD, but at the Bachelors level I look at them between 20 and 25 years old, they are going to be working in business for 35 to 40 years and I have to prepare them for a future that is going to be very different, which will have increasing demands on them to try to operate in a way that is progressively more sustainable. TT So are you building an appetite in them, in this Gen Y population, or are they coming to you with that appetite already? NR That is a Cartesian dualism – I think it’s both. What I try to do is to present them with some of the challenges and the problems that are there to help them to recognise that they are part of the solution and should not be part of continuing the problem and that requires a different approach in terms of the relationships that they have as managers. An example would be the difference, I think, between a knowledge organisation, a learning organisation and a club. Many of the organisations of the present are knowledge organisations and the characteristics of that are that you become more and more powerful and important in your organisation because of the knowledge you demonstrate. One way of demonstrating knowledge as a manager is to take the knowledge of your juniors and to present it as your own and that means that you receive reward and progress and promotion, but of course it is corrosive to the organisation. On the other hand, you have a learning organisation where success and performance of managers is based on their ability to share or to foster knowledge and learning so that people can grow and develop and contribute their skills and be rewarded for that – to be acknowledged. That is far less competitive, but far more compelling in terms of organisational change. I said there is a third category of course, that is the club and the club is even more corrosive because the club is based on the idea that you know enough to be a member of the club and then it is a matter of how you behave. And normally in clubs you are promoted because of your behaviour which looks like those who lead the club and the best way of demonstrating that is to look the same, to say the same, to agree the things you should agree to and to disagree to the things you should disagree with. So there is no tension in tempered radicalism which is a key component of learning. TT So whilst people may have a fiduciary duty – may teach a fiduciary duty, if we can teach that in fact – is there a moral component to their teaching Page 3
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of the future generation of leaders? NR Well, there is a lot of history of business ethics teaching around the field of corporate responsibility. I appreciate that tradition, but it’s not a tradition that I think is comprehensive in its dealing with corporate responsibility. I said before, I think corporate responsibility is about the management of the engagement in relationships – relationships of quality and value. That may be relationships from a fiduciary side towards your shareholders, that would be relationships of quality with your employees because they deserve to be rewarded, developed and engaged and committed to the company and it clearly is a responsibility of relationships of quality with your customers because you want to provide them with reliable quality products at a reasonable price, where they feel comfortable and trusting of the company and its products. But there is a wider set of relationships that a company has with society around the plant that operates with the effects through systems effects like the consequences of CO2 emissions on global warming and the consequences for low lying communities in Bangladesh or South East Asia or in the Pacific. And those too have to be taken into account because they are relationships of quality too which may ultimately jeopardise the existence of the company. So my argument is that relationships of quality matter. Part of the understanding of relationships is recognising that in relationship that one person has with another there are value systems. There are value systems of the person that you are dealing with and there is your value system and ethics, as I understand it, is surfacing those value systems – but there are also other aspects of relationships like trust and confidence and honesty and decency and listening and communicating and transparency. Maybe they have ethical dimensions, but they have other dimensions as well. They have dimensions on authenticity and sincerity and dealing honestly with the paradoxes that businesses face, managers face. That is a very tall order. I think we face incredible, challenging difficult times in our world economy, and the backdrop to that is the internationalisation of business and what that has done for companies over the last ten years under notions of a more open market system, is brought them into contact and confrontation with many different contexts. Companies both producing overseas in different cultural and environmental settings, but also increasingly seeing those settings as markets. One of the questions, I think, for all companies is the extent to which they have to reflect the needs of the contexts in which they operate – the countries in which they operate – and their own core values and approach to sustainability, business, social and environmental issues as a company. I think we have been through period since the Bhopal and the Exxon Valdes of driving for global standards, but I think in the future what we will need to do is to recognise that what is responsible in different settings is variable around the world and some companies are beginning to spend time trying to Page 4
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understand what that means. If you look for example at Toyota Europe, it has corporate responsibility reports which are sensitised to the needs of corporate responsibility of genders of different countries in Europe. If you look at ABN AMRO, albeit a bank that is being absorbed into Royal Bank of Scotland or into Santander or by Fortis in Western Europe, that too is looking at what corporate responsibility means in the different countries of Europe. Why is that important? Well, I think we would be drawing in Europe a great deal on American literature, on corporate responsibility, on American practice in corporate responsibility, but that is institutionally bounded. That is one of the problems of having institutional structures of America. It’s good for America, but it may not be appropriate for Europe and I think Europe has a different view. And partly that is a reflection of the loss of the dialectic between capitalism and communism since 1990 – 1989 when the Cold War was resolved. We thought that capitalism and the open global economy would be the solution to our problems, and now instead of there being dialectic between capitalism and communism, what we see emerging are different variants of capitalism with different relationships between business and society, which is the core of corporate responsibility. In America we have a liberal economy, in Continental Europe at least we have a social market economy, but we also see very powerful forces in India and in China; and in China it is a mix of state run communist economy, together with capitalism. It will not follow the American model or the European model. And we see in India an expectation of state system that was socialist in orientation in many parts of its very vibrant entrepreneurial economy. So what we mean by capitalism is different, reinforced by different institutions. In the States, because of the free float, in money the equity investment that comes from private individuals, much more institutional investment and financing from banks in Continental Europe and from families in India and China because there is still state influence and state control. How this plays out is very critical in what we understand by corporate responsibility. A final example would be if you look to India there are many recent highly successful, globally powerful Indian entrepreneurs who believe in a form of corporate responsibility. It is different from the corporate responsibility that we understand here in Europe, and different from that which is based around philanthropy in the United States. And if you are a global manager, working for a British company then you need to be sensitive to the expectations of the places in which you work. The last thing you want to do is to lord your own corporate responsibility performance, only to be told why is that relevant to this context and this setting? We don’t understand what it is you are doing. So understanding the local context, the local expectations is a critical part of global management. I think Unilever claims that it is a multi‐local global company – that is an example. Page 5
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TT So Derrida was right when he said there is infinite responsibility, there is no absolute. NR Responsibility is a judgement, of which there is no absolute. It is about relationships, when can you judge that you have a responsible relationship? That is not for you to judge, that is for the relationship itself to judge – there are two sides on the view of responsibility and the best way that we can do that is to listen to what is being told to us and ask ourselves why are we hearing what we are hearing? Not what is wrong with the person telling us, but what might that tell us about the practices and activities that we have? That doesn’t mean that you have to change, but it does mean that you should be ware and I think that ultimately what I am doing in the management education that I do is to bring to the attention of my students that they are responsible for listening to others and responsible for making the choices, with that knowledge, about what is good for them and their company. Page 6