Societal Intelligence. Business in society

Fortune magazine recently published its first “Change the World” ranking, of corporations that have made a sizeable impact on global social or environmental problems. Björn Edlund writes about the role of the Chief Communications Officer (CCO), and the role of business in society, and about what he calls societal intelligence, or SQ.

Between 1992 and 2010, I was Chief Communications Officer in three issues-rich multinationals (Sandoz AG, ABB Ltd and Royal Dutch Shell plc). My underlying personal objective was both pretty simple and quite ambitious.

I tried to help leaders to know themselves, and be honest and responsible so as to deserve the public’s trust. It was a period with a rapidly changing societal context, increasingly more empowered and demanding stakeholders, and both higher volatility and growing complexity.

Today, I am writing about the role of the Chief Communications Officer (CCO), and the role of business in society, and about what I call societal intelligence, or SQ.

This blog is based on a speech I gave at the end of September in Chicago, when the Arthur W. Page Society www.awpagesociety.com inducted me into their Hall of Fame.

The theme is topical. Fortune magazine recently published its first “Change the World” ranking, of corporations that have made a sizeable impact on global social or environmental problems as part of their competitive strategy. Not a ranking of “goodness”, but an attempt to “shine a spotlight on instances where companies are doing good as part of their profit-making strategy.”

I began my career as a news agency journalist, first with UPI and later with Reuters. There is no doubt that journalism shaped my outlook, and made me look for patterns of behavior of people and groups, and to see the connections to societal circumstances, cultures, belief systems and values.

This was a helpful approach. Our world is characterized by two strong forces –globalization, which has ceded a lot of political terrain to global companies and unleashed economic forces that create huge new challenges like inequality, andtribalization, which means that people and groups form strong bonds around, and act on, religious beliefs, cultural identities and political convictions.

To navigate these cross current, business should reflect on the words of former UN Secretary General Kofi Annan when he launched the UN Global Compact: “If we cannot make globalization work for everyone, in the end it will work for no one.”

Over the 12 years I was a correspondent in Europe and Latin America, with reporting sorties in the Middle East, North Africa and Asia, I learned to be sensitive to cultural contexts. Respect was always the key to building trust.

Looking back, I realize that I have also drawn on an insight that came to me in my mid-teens. Only now, 50 years later, can I fully explain it. Stories, our own stories and how we engage with the stories of others, serve a profound human need for belonging, structure and guidance.

The success of our task as CCOs depends on the C-Suite “getting” a simple story-telling truth, one I found words for in my first CCO job: “We are what they know.”

Companies need to both tell their story and systematically engage with stakeholders to make sure that “what they know” is authentic and opens doors for the business.

It was the role of business in society, and how companies can be a force for good, that drew me from journalism to PR.

More than 25 years after making the switch to what journalists call “the dark side”, today I see the most valuable leadership contribution of our profession in the formulation and activation of what I call Corporate Public Strategy. Corporate Public Strategy is the integrated response to a corporation’s role in society.

A sound Corporate Public Strategy is key. When business gets it right, its contributions are plentiful. Business employs people, and companies help nations grow business skills. They pay taxes and contribute to local economies. Corporations train people, share technologies and know-how. Good companies look after natural resources and the environment, and treat employees and communities with respect. They set examples in competitiveness and performance, in decency and fairness.

Sadly, business very rarely scores perfectly in all these dimensions. But when it does, it really fulfils its role in society as a corporate citizen. Well-run companies know that short-term thinking, and too great a focus on shareholder value, will in the end hollow out the firm.

Good companies tick like Unilever, which dropped quarterly reporting and is changing its business focus to sustainable living – how they and their customers and business partners can produce and consume sustainably.

How do we change businesses that are still caught between the rock of shareholder value and the hard place of short-termism, so that they can better understand and act on their role in society?

A lot depends on the leadership. To realize a company’s societal potential, I believe its leaders need three forms of intelligence – business smarts and a good IQ, and a superior EQ (or emotional intelligence).

But, also what I would call a well-developed SQ (societal intelligence) that lets them fully explore their company’s purpose and role in society. Societal intelligence is, as I see it, the ability to see and act on a company’s challenges and opportunities in their broader economic, political, social and cultural context. SQ means thinking outside-in and understanding stakeholder needs. SQ means understanding what drives opinion.

John Morrison, the executive director at the Institute for Human Rights and Business, says in his great book “The Social License” that for companies to earn their social license to operate, they must first “understand the pre-existing social contract.”

SQ is an attempt to help leaders grasp and grapple with the new, growing demands for engagement in a fragmented, fast and volatile world, and to make sure their organizations understand and respect “the pre-existing social contract” – the real and perceived rights of people, groups and communities on whose lives a company has an impact.

The actionable aspect of SQ – the way the CCO helps the C-Suite seize on the opportunities that better connectivity will bring – is expressed through a company’s Corporate Public Strategy. To me, Corporate Public Strategy is really the core mission of the CCO.

Fortune magazine recently published its first “Change the World” ranking, of corporations that have made a sizeable impact on global social or environmental problems. Björn Edlund writes about the role of the Chief Communications Officer (CCO), and the role of business in society, and about what he calls societal intelligence, or SQ.