How business must change its relationship to society: Steve Murrells, CEO of the Co-operative Group UK

On Tuesday 20th November, Steve Murrells, CEO of the Co-operative Group UK gave a bold speech to the National Social Value Conference in Manchester.

WEAll is sharing (with permission from the Co-operative Group) some highlights of the speech, as an example of a business that is showing leadership in changing its relationship to society.

“Why leadership matters – How business must change its relationship to society” – extracts from Steve Murrells’ speech      

The Co-op Group is a £10bn a year operation. We have three and half thousand Co-op food stores across the UK and we supply wholesale to more than 5,000 shops run by Nisa partners and Costcutter.

In addition, we’re the country’s biggest provider of funeral services with 1,000 funeral homes. We offer legal help too and we’re now the number one provider of probate in the UK and we have a successful insurance business.

The top mutual and social enterprise businesses pay more tax in the UK than Google, Amazon, Facebook and Apple combined. Although, that may say more about them than us!

Businesses driven by a social purpose are on the increase. There are good reasons for this, which I’m going to come on to.

I think we must remember that most of the social and economic challenges facing our country existed long before June 23rd 2016 [Brexit referendum in the UK].

In business itself I’m thinking of issues such as: trust, corporate transparency, accountability, executive pay, diversity, gender and inclusion.

As for the broader social issues: I had in mind

  • the growing economic divide between the most and least well-off, both in the UK and around the world.
  • the consequences of a global way of doing business that’s left too many people – and whole communities – as losers.
  • A Health Service under incredible strain
  • the lack of affordable homes for a younger generation, and the likelihood that today’s young people entering the workforce will be less well off than their parents or even grandparents’ generation.

And then there’s climate change.

From Ke-roola in India, to Cumbria in the UK, extreme flooding is already causing regular chaos and destruction.

Watching the terrible news of the dead and the missing after the wildfires in California, it’s clear that even the richest state in the richest country in the world cannot protect its citizens from climate change.

As an insurance provider, climate change already has to be factored in to our business planning.

But despite all of the evidence that global warming is no longer a potential risk but a current crisis, we’re still failing to face into it.

Not only are the challenges we face considerable, our ability to tackle them is hindered by our divisions. We have never lived in a more divided society:

  • The distrust towards government and traditional sources of authority
  • The Brexit arguments which divide households across Britain
  • The growth of strident nationalism across Europe
  • The tribal ‘culture wars’ that are scarring the United States

There is much that is broken in societies across the world.

And I believe business needs to acknowledge its part in creating this situation.

Trust in big business is at an all-time low.

It appears to be part of the problem, not part of the solution.

That’s due to a lack of transparency, a perception of tax avoidance, a feeling that there’s too much greed in the boardroom.

Of course most businesses don’t deserve this kind of harsh criticism. But there’s too many that do. And too many that think they’re doing a better job than they really are.

Business should care about their contribution to the communities they serve because all the research tells us that the upcoming generation of employees and customers care about it very much. Deloitte found that 92% of millennials believe that business should be measured by more than just profit and should focus on a social purpose too. In just seven years’ time, millennials will make up 75% of the global workforce. On what criteria do you think they’ll choose where to invest their time and talent.

At the Co-op…the question has never been: “Do we have a social responsibility in addition to generating profits?”

But rather: “How do we best express the social responsibility we were set up to address in the first place?”

One thing the Co-op has learnt over the years is that you cannot ‘do good’ in society unless you are also running a good business.

We have to be commercially successful. We do not operate in some kind of ‘Co-op bubble’ untouched by the rest of the world. Even our most passionate co-op members will not stick with us if our food shops are shoddy or our services are second rate.

But equally, we must not forget why we’re here.

There’s no point being exactly the same as everyone else. In our case, we could succeed as a business, but fail as a Co-op.

Mainstream business often makes the mistake of thinking that social enterprise is charity by another name.

At the Co-op we don’t see the good things we do for the community as some kind of corporate philanthropy. Nor is it merely a cost to our marketing budget.

And as a national business, operating in every postal area in the country, we choose to speak out and campaign on issues of local concern to our millions of members.

Social Isolation, Modern Slavery, and Safer Communities are three issues we’re campaigning on and talking about at a national and local level.

I don’t want you to think that we’ve totally cracked how to be a socially driven business operating at a national scale.

I talked earlier about climate change.

It’s an issue which has no respect for national borders.

We need international level playing-fields if business is to take the necessary actions to radically reduce our dependence on a carbon based economy.

Governments, acting internationally, have to lead on this. But politics and long-term thinking don’t always go together.

So business must help by giving our politicians the confidence and economic mandate to go further in their legislation and planning.

 

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