Belonging, ethics, Starbucks - and what you say 'No' to


What would you say no to?

It's a great question to ask if you want to see how ethical your culture is.
 
How does this play at Starbucks?



I'm sitting in Starbucks in Covent Garden. My first time in a Starbucks for some time. Partly I wanted a cup for the photo above. And, in the interests of fairness, to experience a company I've tended to avoid.



Starbucks seemed to say 'No' to taxes for quite a while, had some bad press suggesting it was grumpy it couldn't quite say 'No' to homeless people hanging around a branch nursing one cup of tea all day, and recently said 'No' (pretty soon after saying 'Yes') to its rather blighted #racetogether campaign.



But last week it said 'No' in a way that may have brought it more of an ethical glow in a few minutes' exchange at a shareholder meeting than in the previous ten years.



At Starbucks' annual general meeting in Seattle last week a shareholder was disgruntled that the company had lost value because of its overt stance supporting gay marriage. 

The far-right Christian lobby had organised a boycott of Starbucks which apparently affected sales. The shareholder was identified by Huffington Post as Tom Strobhar, founder of anti-gay-marriage pressure group Corporate Morality Action Centre.



Without blinking, CEO Howard Schultz responded with

“Not every decision is an economic decision... I don’t know how many things you invest in, but I would suspect not many things, companies, products, investments have returned 38% over the last 12 months.

Having said that, it is not an economic decision to me. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds.”

And then, the clear-cut 'no':
 

“If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country.
You can sell your shares in Starbucks and buy shares in another company.
Thank you very much.”

The audience rose in cheers and applause.



From the rough film clips on news sites and YouTube it seems this was an on the spur response to an impromptu question. Though sometimes canny investor relations teams have an idea of the issues that may be raised by activist investors, this seems the real McCoy: a moral stand by a leader with conviction. 

It's a straightforward rejection of the investor, his ethics, and his cash.
 
If you don't share our values, then don't question our value: We don't want your money.

Howard Shultz has taken a stand behind what the company believes in. Belonging to Starbucks - as an employee or as an investor - means ensuring everybody can belong on an equal-footing. And if you don't believe in that, then you don't belong.
 

Purpose over profit? It's both, of course.
More importantly: ethos.


And that's the heart of belonging, at the heart of business.



It'll be interesting to see if any other big corporations are prepared to say no, quite so openly, to defend what they believe in.



Maybe we're beginning to nurture early seedlings of a new capitalism.


How would that feel to belong to?
 
So, what would you say 'no' to? 

And, in your organisation, would your CEO stand up boldly for what you all belong to?



At Belonging Space we help organisations put ethos and purpose at the heart of their business, and create a sense of belonging.

isabel@belongingspace.com


www.belongingspace.com

Culture of ethics: catching people in rather than out

"It's alright, When people do something wrong we'll catch them out"
the Head of Risk Compliance told us

The compliance guy's view sounds sensible, doesn't it, in the circumstances. Except that catching them out afterwards is already too late.

This was a global engineering firm, in rehabilitation with the regulator after a fine and prosecution for a serious ethical misconduct.

I was running a programme of ethics and values with them and their CEO who said 

"We need to build a culture of ethics"

But in fact catching-people-out undermines a culture of ethics. 

It's more important to catch-people-in: so that they know they have done the right thing. 

This helps avoid doing the wrong thing, and helps people know why it all matters. That's the best way to avoid ethical contraventions and keep on the fair side of the regulator.

In the same client company, the CEO shared concerns that it was taking too long to recover market position and investor confidence. After damage to reputation it was much harder to heal relationships than they expected.

The COO was worried about lack of innovation,  too long to get things to market - competitors were beating them. 
And the biggest concern was lack of collaboration. The problem of silos and infighting between divisions and constituent businesses was worse then ever. People pulled back into small teams and cabals.
Well of course they did. They were scared of being caught out.

Far from making the company stronger, the whole ‘catching-them-out’ approach had caused another huge problem:
inertia 

We saw all the cultural symptoms:

• People looking over their shoulder…
• Afraid to ask a question or check…
• Lack of trust between colleagues…
• Restricts ideas...
• Creates dependency...
• Crushes confidence...

This will kill the business.

No risk, no gain.

Inertia is a crippling business risk. 

How do you take the right risks with the right safety measures? 

Manage risk rather than avoid it?

By catching people in.

The regulatory bodies are no soft touch. It's not a question of paying a fine and getting on with business as usual. The company has to show how they’ve changed, especially how culture has changed, how this can be measured and sustained.

To do this, organisations need a clear code of conduct and careful management legal and conduct risk. They need to provide guidance to make every day decisions, and an environment of candour and confidence around risk.

• Reinforce the guidelines
• Show what ‘doing the right thing’ means, and why this matters
• Provide context overall and relevance to each part of the business
• Help people navigate the grey areas

With the engineering company, we made the principles really clear and trained managers in using a toolkit. Catching people in was a big part of the success. 

• Reaffirm good decisions
• Share what’s gone wrong in a way that people can learn how to do it better
• Share what’s gone right and how this helped to manage risk
• Acknowledge the small actions and choices made every day
• Say thank you for taking the time to listen or for raising the issue so we can manage the risk

Upholding ethics needs to be a fast reaction. This works best when people are confident about doing the right thing – not because someone’s watching or telling you what to do.

That’s why ethics comes down to commitment more than compliance: Doing the right thing because you WANT to, not just because you have to.

And commitment begins with Belonging, choosing to uphold the principles of the organisation you belong to. Belonging makes ethics a team thing: shared responsibility.

This is far more powerful - and commercially productive - than an army of compliance officers telling you what you can't do.

Go on, find a colleague who’s done the right thing: catch them in.

We help organisations create a culture of ethics and belonging

Drop a line if you'd like to try our toolkits for 'How to deal with ethical dilemmas' and 'Catching people in' 

isabel@belongingspace.com
www.belongingspace.com


See also
Freedom to Speak Up: Candour and ethics
http://belongingspace.blogspot.co.uk/2015/02/freedom-to-speak-up-candour-leads-to.html

Can Credit Unions* restore faith in the ethical standards of financial institutions? (*Now with Royal approval)

The Duchess of Cornwall gave her enthusiastic support this week to the work of Credit Unions and their role in providing financial services for the most vulnerable.

Thursday was International Day of Credit Unions, with activities across many countries, to recognise the achievements of this distinct kind of institution.

Belonging is at the heart of Credit Unions: customers belong as members and investors, they share ownership and benefits of the fund, as well as a voice in the decisions around it. They are mutually-owned, ethically-run, and locally-based.

In contrast with the recent scandals around PayDay loans used by the most financially and socially vulnerable to tide them over week-on-week. With compound interest of up to 4,000% this left people with impossible debts.

Ethics - and commercial sustainability - have no place in this practice. Under pressure from public and the Financial Conduct Authority (FCA) Wonga recently wrote off £220m of debts for 330,000 customers. 

The Credit Unions show us a different model: one in which ethics, commerce and financial services are easy partners.

Shared ownership means shared accountability, creating a powerful sense of belonging. 

Purpose is twinned with ethos, giving people principles to believe in and a reason to commit.

Belonging is not just about what you are doing, or how much money you are making: but who you are serving, and why.

Mutual support, strong principles, sharing, exchange and interdependence are all features of this kind of belonging.

Ethics benefits too. When people feel they belong to something they commit more firmly to its principles.

When people belong they do the right thing because they want to, not just because it says so in the rules.

The theme of this year's ICU Day is "Local Service. Global Good". The World Council of Credit Unions says this “emphasizes credit unions' positive impact in their communities and around the world” 

In the UK there are 524 Credit Unions with £1.1bn worth of assets and almost 1.5 million members, of which the Duchess of Cornwall herself is one.  

The Duchess said: “Credit Unions serve people, not profit” and could be “a real force for change in the financial landscape”.

They are growing in popularity in the UK, though just 2% of population are members. Although returns on savings are low, the appeal is in mutual support, with members borrowing and lending through the fund. Gateway Credit Union in South Wales reports significant growth.

In the US, Credit Unions are used by 46% of adult population with strong regional brands.

Mazuma Credit Union, based in Kansas City, exudes the power of belonging. Respected for its great work with the communities it serves as well as a great culture for the people who work within it, it has achieved consistent growth and stability through the recession.

Public faith in financial institutions crashed after a host of ethical disasters. Even the Co-op, the paragon of ‘good business’, is sullied by the scandals around the previous CEO and revelations about failings in Governance.

Are the major financial institutions are too big to be held accountable?

Can Credit Unions set high standards of ethics, and help restore confidence in finance houses?

Mark Lyonette, chief executive of the Association of British Credit Unions Limited says “Credit unions are a very good way of keeping banking in check.”

The unique ethos and structure of credit Unions must be welcome to the FCA. In its earnest efforts to improve standards of ethical conduct in financial sectors it stresses

“Treating customers fairly remains central to our expectations of firms’ conduct, that firms put the well-being of customers at the heart of how they run their businesses.”

Let's hope that the ethics of Credit Unions, and the spirit of belonging, can imbue shared accountability across the financial sector.

We surely need it.

Do your customers, employees and investors all feel they belong to your organisation?
Does everyone in your business uphold its ethics?

Talk to us about how to create a sense of Belonging.

isabel@belongingspace.com

www.belongingspace.com

twitter@IsabelBelonging

Is SARAH common sense or a get-out clause? Shared ethics is a vital part of Belonging

The Social Action, Responsibility and Heroism Bill 
Shared ethics: shared responsibility

Mixed feelings on the Social Action, Responsibility and Heroism Bill, getting its second reading in the House of Commons today.

Does this new Bill encourage people to jump in and take social action? 
Or provide a get-out-clause for them to avoid being sued?

Certainly taking social action - doing something rather than standing by when someone is in need of help - is how we sustain our communities and uphold our society's ethics. Shared ethos is a vital part of Belonging. 

The rule of law works precisely because of this: integrity is both an individual and collective responsibility.

But a separate law to say 'it's OK to take part' feels a bit forced.

It has come about from serious concerns that people may avoid taking action for fear of recrimination and compensation-seeking.

As the introduction says:

"The bill has been developed in response to concerns that people may be put off from taking part in voluntary activities, helping others or intervening in emergencies due to worries about risk and liability. The government also wants to make sure that when people such as employers have been taking a responsible approach towards the safety of others during an activity and something goes wrong, the courts will take account of the circumstances.

The bill therefore contains measures to reassure people that if they’re acting for the benefit of society, intervening in an emergency or demonstrating a generally responsible approach towards the safety of others during an activity, then if something goes wrong and they are sued for negligence or for certain breaches of statutory duty, the court will take full account of the context of their actions."

The ambulance-chasers, the class-action lawyers hearing cash registers ringing, the parents blaming the school for a simple knock-over in a playground: they've all added up to a massive cost in both cash and justice.

But is there a risk this is interpreted as impunity for vigilantism or lack of due diligence for Health and Safety?

We are assured not:

"The bill does not tell the court what conclusion it should reach and does not prevent a person from being found liable if the circumstances of the case warrant it. It does not therefore give anybody licence to take unnecessary risks with people’s safety or leave the injured party without a remedy when the defendant has failed to meet the appropriate standard of care."

Critics have said the new Act is unnecessary as the 2006 Compensation Act already does this job. It was devised to "find ways to discourage and resist bad claims; and to improve the system for those with a valid claim for compensation".

Chris Grayling, the justice secretary, is referred to in The Times article today on the new Act:

"British people have become too inclined to blame someone else when something goes wrong, the justice secretary said yesterday.

Chris Grayling said the “blame someone else” attitude in society had helped to fuel a compensation culture that needed to be broken."

The Government Factsheet  stresses the considerations for acting responsibly and taking reasonable care, and that the Act

"..will not tell the court what conclusion it should reach and does not prevent a person from being found negligent if the circumstances of the case warrant it. Nor will it have any bearing on criminal liability."

But this comes alongside moves from the Government to reduce the powers in the UK of the European Court of Human Rights.
  
So is this new Bill merely a way of reducing the weight on employers of pesky Human Rights or Health and Safety directives?

We express our belonging in our ethics and how we collectively uphold those standards. Language tells much. The emotionally-loaded title - "Social Action", "Heroism" - is less objective than the usual cold, neutral wording of the Westminster Bill-presses.
Wrapping this up in phrases like 'reasonable care' makes it all sound like common sense. But as human rights come under pressure the shared sense of ethics can become less common. 

It'll be interesting to see how the debate goes in this afternoon's Parliamentary business.
Though any coverage will be overshadowed by the PM's statement on the tragedies in Ukraine and Gaza. 

And in those horrors we see what can happen when we express belonging through violence, making our boundaries so small and fragile. 

Yes, Westminster, we could do with a lot more social action, responsibility and heroism. We need more SARAH: on a global as well as a national scale.