Enterprise Compliance Today

Social Responsibility is the New Black in Risk

Posted by Greg Carroll on Mon, Jul 11, 2016 @ 12:51 PM

Even more than reputational risk or cyber risk, social unrest is lining up to be a greater disrupter than any other issue. From Brexit to ISIS to race relations, civil unrest is shaping up to have a profound impact on business.  For the management of uncertainty on business objectives to be truly effective then risk needs to also include all items that disrupt the marketplace.  As such, Social Responsibility is the primary strategy to ensure business resilience.

 

Dutchboy.jpg

Without addressing macro economic issues, risk management is just the little Dutch boy with his finger in the dyke.


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From the rise and fall of the Roman Empire thru the catastrophic events the early 20th Century, to current times, history has continually shown that prosperity lead to ineffective inclusive governments, that result in breakdown and social unrest, which in turn breeds ‘nutter’ extremists, that ultimately leads to anarchy and/or war.  The prognosis is as certain as the effects of the El Nino/La Nina cycle if left unchecked. However we do have the ability to intervene and take control over our destiny if we so choose.

The Failure of Government

'come back Bobby Kennedy.'

We have lived thru a time of prosperity and now are in the time ineffective inclusive governments (with due deference to Obama, Cameron and Malcom Turnbull).  We are also now starting to see the foreshadow of social unrest.  Brexit was in essence an expression of xenophobia, as is support for The Apprentice and his wall.   ISIS, starting with just 800 insurgents taking Mosel, Iraq’s 2nd biggest city, was to result of the ineffective Iraqi government installed by the allies.  The cause of current race riots in US are both obvious and on-going but, like their gun laws, successive weak governments are incapable of handling (come back Bobby Kennedy).

The reason government is incapable of managing social unrest in due to the egoistical belief that it drives society’s perception and behaviour.  In fact it is just the conduit of it.  It is the equivalent to business believing it controls the market.  Social engineering has never worked, but government continues to throw inordinate amounts of money at it.  What is that definition of insanity again?.

 

The Mantle of Business

The redefinition of today’s work-life balance.”

Heavily involved in the day to day of the vast majority of people’s lives, thru employment, customer interactions, and directly affecting the state of the environment, business has a greater capability to affect perception and behaviour than insulated and remote government.  Like Facebook and Uber, companies that see the opportunities in the new world order, and re-strategize to it, will reap the benefits. Business should start considering the benefits of community integration in view of today’s redefinition of work-life balance. 

Where baby-boomers thought of work-life balance as separating adequate time to both, today it is about their integration, non-time specific and in a holistic context.  The use of BYOD and referral/connections thru social media mean business and personal time/activities have become indistinguishable.  It won’t be long before personal brands and social media profiles of staff will carry more weight in company reputations and market penetration than marketing’s product imagery. 

 

Turning Opportunity into Strategy

'Enhancing end users’ quality of life as an expansion strategy.'

If you accept this premise then you can start working on the strategic view of how Social Responsibility can be tightly linked to your marketplace and staff.  Once this quantum shift has been made, everything from product purpose thru environment impact, to redefining your market in terms of end user profile, becomes your focus.  Enhancing your end users’ life is then a market expansion strategy.   Instead of thinking of the subjugated or unemployed as limited consumers, and considered instead as a potential market, then liberating that market will increase your market-share.  Staff with greater social hope are more likely to be innovative and pro-active in identifying and taking advantage of opportunities, the key to expansion in the new world order.

The origins of Paraeto's 80/20 rule was in socio-economic research and is still in effect today.  As the world is finding with China, unlocking the potential of that bottom 80%, is a game changer.

Finally…

'Tapping 80% of the market.'

In summary, the new “industrial revolution” is not so much technology based, as being based on expanding people’s quality of life.  Facebook and Uber are not new technologies but rather re-purposing of existing technologies to provide a better quality of life of their consumers.  When looking for potential markets, there is wealth of areas where people’s quality of life can be improved, and the rich only make up 1% of the marketplace.

Resources

paperbackfront  reduce non-compliance  Strategic Management
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Tags: ethics