Corporations Must Become Socially Conscious Citizens

Why the Occupy Wall Street movement and its message are spreading

by Ron Shaich

Posted on Harvard Business Review: October 28, 2011 10:50AM

This blog post is part of the HBR Online Forum The CEO’s Role in Fixing the System.

I recently heard that the only group held in lower regard than corporate executives in the United States is Congress. Wow! Think about that. What a terrible blow to business. And yet, I’d argue that it’s our own fault. By serving narrow self-interests, we — the business people of this country — basically facilitated this mistrust. We have been purveyors of our own doom. There’s a reason the Occupy Wall Street movement was hatched and a reason why its message is growing more pervasive.

The shine on corporate executives has been more than just tarnished by the economic events and hardships of the past three years. It’s all but gone. Too many corporations view their role as extracting profit (“hit the numbers!,” “deliver the bottom line!”) from society as opposed to viewing profit as a byproduct of delivering a valued service over the medium and long term. A stock pop on the heels of the release of monthly sales results contributes little to customers, employees, or communities, and yet that is exactly what all too many corporate executives are focused on and live and die by.

Given that we — the business people of this country — are responsible for our bum rap, I think we’re also responsible for restoring its luster.

Enter new approaches to capitalism — some are calling it conscious capitalism or enlightened business. I’d call it simply “enlightened self-interest.” This notion of a conscious and long-term approach to value creation — when put into proper application — serves long-term shareholders extraordinarily well and has the capacity to favorably reshape the public’s perception of corporate America. It is built on the fundamental premise that every business has a deeper purpose than merely short-term profit maximization and, more importantly, a responsibility to all of its stakeholders (customers, employees, vendors, investors, community). With such a model, profit is merely the byproduct of delivering something that serves society and a broad range of stakeholders.

When I go to the ATM, I’m usually required to make a deposit before I make a withdrawal. I’d argue it’s the same in business. We have to spend less time figuring out how to extract economic value from our stakeholders and more time creating what is valuable to them. Doing so is what ultimately creates long-term value.

There are countless and creative ways in which companies are beginning to do exactly that. I find an experiment that the Panera Bread Foundation conducted to be an interesting example.

About two years ago, we began noodling around this idea of leveraging Panera’s core skills to affect positive — heck, lasting — change in the communities in which it served. Panera operates some 1,500 bakery cafes nationwide. We’ve been opening two cafes every week. Our belief was that the national scale of our operation provided Panera the opportunity to turn that core competency against a societal ill and uniquely make a difference in addressing the food insecurity in this country. We continued to kick the tires on this idea and decided: we were going to tackle an issue by skill and sweat equity rather than, say, hand-outs or day-end product donations, which Panera had been doing, and continues to do, through its Dough Nation program.

This revelation manifested itself in true bricks-and-mortar form as a Panera Cares Cafe in a St. Louis suburb — a non-profit, community-based, pay-what-you-can iteration of our established, commercial Panera, LLC cafes. Today, we are three cafes strong. The ultimate hope is to open one in many of the markets Panera serves. We call them community cafes of shared responsibility.