The changing business landscape demands that it has to be more than just profit making
The economy is not what it used to be and it is not business as usual, which brings into question whether the concept of capitalism which places profit at the helm of its undertaking can continue to serve societies or not.
Etienne Pretorius, entrepreneur and real estate developer illustrated recently at the Global Expo Botswana that a human possesses six characteristics which include greed, selfishness and vanity.
These characteristics, he said, have had a part in fueling entrepreneurship. If it is the case that a human being cannot be divorced from such characteristics then it might be interesting to find out how business can be done such that societies can mutually benefit as do businesses.
Vice Chancellor and Managing Director of Botho University Sheela Raja Ram attempted to answer that question at the Business Botswana (BB) Gala dinner held two weeks ago.
Although Pretorius and Ram did not set out to interrogate the same issue, their contributions to subjects they had been given to discuss provide a connection to the burning question of how businesses can be conducted in these changing times. The Gala Dinner presents a platform in which a speaker invited by BB discourses a topical subject, while the Global Expo Botswana, on the other hand, provides a business to business space which aims to foster foreign direct investment, export promotion and cross-border trade for the benefit of Botswana and its trading partners.
In her interrogation of the 2016 theme ‘Business as a force for good in Botswana: ensuring that it continues to be the tide that lifts all boats,” Ram started her interpretation of the theme by breaking it into two components, one of businesses as a force for good and the other of businesses as a tide that lifts all boats. She recognised the difficulty of businesses ma in doing good particularly at a time when survival in the market is what many of them are presently grappling with.
She suggested that if business is to be a tide that lifts all boats a new business model of shared value has to be adopted so as to move away from the narrow concept of capitalism.
This is a concept coined by Michael Porter and Mark Kramer intended to reinvent capitalism. She described shared value as a model that connects company success with social progress, emphasising that it is not social responsibility or philanthropy but rather a way in which to make customers stronger which in turn makes the business stronger too. This, she said, can be done by addressing society’s needs and challenges not purely for short term financial profit but for creating value for society in addition to that of shareholders.
“Traditionally businesses have left societal issues to governments and NGOs. While society is closely linked to its government, governments and NGOs have proved that they are not very good at resolving big societal issues, maybe businesses need to step in and grow their businesses in this space. Governments, on the other hand, need to step back and create regulations that make it easy for businesses to serve society,” she said.
Ram also related the model of shared value as a way in which the private sector can build trust between it and government, which as has been evident, is currently lacking.
“Politicians and social leaders become suspicious of the word ‘profit’,” she said. By seeing the value that will be created to businesses and the local population as well as the broader economy, she said, government will begin to appreciate the contribution private sector makes. The result, Ram said, is that the two will trust each other.
“I sincerely believe that by taking a long term view to how we do business and by putting creation of shared value at the centre, not only can we support our customers better but also grow our businesses in a more sustainable manner – in this process we will also build trust with our governments,” she concluded.