The following includes topics discussed during our October 29, 2020 webinar, Social Responsibility in the New Era.
Recently, the business world marked an anniversary. It has been 50 years since economist Milton Friedman published his influential essay, “The Social Responsibility of Business Is to Increase Its Profits.” In that landmark piece, he posed the question: “What does it mean to say that the corporate executive has a ‘social responsibility’ in his capacity as a businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers.”
Because of the COVID-19 pandemic, many business leaders have had to confront a lot of questions on whether maximizing shareholder value should be their sole focus—or whether putting the interests of employees and communities first can actually help their future bottom line. Should the company lay off workers or keep them on the payroll in expectation of resuming operations? How soon should a company open its doors and ask employees to return to the workplace? How far should the company go in requiring on-time payments from vendors, tenants, and customers?
At Televerde, we have a lot of experience with how doing the right thing for people can go hand-in-hand with doing the right thing for the business. Since 1994, we’ve hired, trained, and compensated thousands of incarcerated women. We help them build professional skills that give them purpose during their incarceration, then help them make a transition to productive lives after their incarceration ends through our nonprofit, Televerde Foundation. We believe business can be a force for good — and that running our business this way also benefits our clients (our results prove this). By giving incarcerated women a second chance, we give them a purpose. And our clients see better results because we’re helping women build better futures.
Sharing the innovation
The way we do business may be special, but unlike a lot of companies, we don’t view our approach as a trade secret to be closely guarded. We want other companies to emulate us. In fact, with Televerde Foundation, we take the best practices we’ve learned from training education, reentry support, and career development and build programs that help other organizations be successful in the same way. Some of the things we encourage companies to do include:
- Put diversity and inclusion at the forefront of their business strategies and recovery plans
- Prioritize skills and fit over experience and education
- Provide training on unconscious bias and its impact
- Align company mission to the broader equity issues faced by the communities where they live and do business.
The bottom line is that reinventing business as a force for good turns out to be smart business. Some 71% of consumers say that they prefer buying from companies that align with their values. The way a company does business can help it stand out in a crowded and competitive market.
So, with all due respect to Milton Friedman, we believe that there’s a lot more to business success than a laser-focus on profit. Business doesn’t have to be a zero-sum game where my success comes at the cost of yours. Emphasizing social responsibility isn’t a drag on corporate efficiency and profitability. Instead, it’s the foundation for them.
Visit the Televerde Foundation for more information.