The presence of a visionary leader is vital to the embedding sustainability throughout an organization, from political leaders at COP21 to CEOs of multinationals. Without the “tone from the top,” there is little chance of a company embracing and succeeding in the area of sustainability. Leadership is the key.
Dr. Philip Cochran, from Indiana University, has vast experience in the sphere of business, corporate responsibility and ethics. In this video, he discusses the changing and evolving nature of capitalism, the sharing economy, and the importance of company leadership to sustainable practice.
You can read a transcript of the video below:
CR: Is the Sharing Economy a threat to capitalism?
Dr. Cochran: Capitalism has evolved and will continue to evolve, and maybe in 50 years it won’t even be called “capitalism.” I think the market mechanism is what’s really key here.
Capitalism evolved in an era in which capital is very scary. In today’s world, capital is much less scary. We’re also moving into an ear in which people called the “sharing economy.” That’s going to become a bigger and bigger part of the economy.
People’s Uber is in some ways a sharing economy. Air B&B is part of the sharing economy. There are dozens of companies in the US and in Europe which are part of this new sharing economy. Air B&B, for example, now rents more hotel rooms than any hotel chain in the United States, and it’s not really part of the traditional capitalist model.
CR: How should firms adjust?
Dr. Cochran: The big multinationals can probably do a number of things. In sustainability, there are some dramatic things.
Wal-Mart has really gone to putting solar panels on the roofs of their stores, and they’re trying to move in the direction of being a very green company. General Electric has an incredibly green vision, this eco-imagination of vision of really becoming one of the most ecologically friendly companies in the world. And that did come with a new CEO in GE as well.
So I do think it’s something companies can engage in a number of dimensions.
CR: Does the CEO need to have their own vision for sustainability?
Dr. Cochran: I do think the visionary is key. I think you need someone at the top who has the vision who can drive it through the entire company. If you don’t have that, it’s not going to happen.
The tone at the top is absolutely critical. If the CEO doesn’t buy into it, it’s not happening.
CR: Can employees drive sustainability from the bottom up?
Dr. Cochran: I think the key is building the company culture which is supportive of CSR. In some companies, it’s really baked into their DNA, and for other companies, it’s a foreign object.
It helps if you have a CEO who has the vision, but if you have a handful of people in the company, in some ways, nothing is more viral than a good idea.
If you can show that this really matters and that employees are happier with the company, customers are more satisfied, and that you’ve got a lower turnover on the employee side, more repeat business on the customer side, less government regulation…
All the stakeholders are lining up behind you. Then, I think, most CEOs will see the light.