Posted by: Arjan Tupan | 18 April 2011

Greed is no longer good

For the third time, Diklu Pils was the venue of the Dikli Forum this weekend, organised by the Konrad Adenauer Stiftung (KAS). The topic of how a social market economy and CSR can help economies cope better with crises was of direct interest for the CSR committee at AmCham, so we were honored to be invited for opening the event with the traditional dinner speech.

The mixed group of attendees at the forum, consisting of policy makers, scholars and entrepreneurs from Latvia and abroad, made for an ideal setting to generate ideas and combine points of view. From the discussion on Friday night and Saturday morning – I couldn’t attend longer than that, unfortunately – there were some key thing I learned. First of all, in Western Europe and the US corporate social responsibility has come a long way, and many lessons were learned. Latvia has the great opportunity to take these lessons into account, and leapfrog development into the next stage. For that it is important not to stress the uniqueness of Latvia, but to seek the common ground and not reinvent the wheel. There are many institution – AmCham, KAS – that are more than willing to share the experiences, and several schools that have done research into the subject (SSE Riga, EBS in Estonia). The second lesson from the Dikli Forum was that there are great examples available here in Latvia and the other Baltic States of how you can use CSR as a practical framework to improve your company’s profitability. These examples need to be highlighted. Through sustainability or CSR indexes, and through platforms like the Dikli Forum.

Another lesson learned is that transparency is very important. Transparency creates a level playing field, in which companies can thrive. The sustainability indexes are very helpful in this, but there is a lot that lawmakers can do in this respect as well. European Union directives will certainly help, but parliaments have the responsibility to translate these into workable solutions for the respective countries. Input from businesses and the public is key. Transparency also helps give consumers to make informed choices. And there is an opportunity for entrepreneurs here, especially in the new technology field, to translate the information gathered by the indexes and scholars into practical consumer information. The increasing availability of for example smart phones can then bring this information to points of purchase. This consumer involvement leads to maybe the most important lesson I took from the Dikli Forum, which is related to maybe the best know pyramidic model: Maslow’s hierarchy of needs.

What you see happening in Western Europe is that companies become more and more responsible. I believe this is a reaction to the fact that societies are evolving towards the top of Maslow’s pyramid. With people in these societies reaching the summit of Self-actualisation, the pressure on businesses mounts to act on that. Because people are consumers, employees, voters and leaders. This results in a shift in the relation that businesses have with society. From the principle of ‘Greed is good’ to the principle of contributing to society. Not only because the organization thinks that is good PR, but because customers, business partners, employees and leaders demand this. Despite the crisis, many in the Baltic states have reached the top-levels of the hierarchy of needs, and businesses and law-makers alike should take the resulting demands into account. It is time to move away from viewing all businesses as organisms that take as much from society as they can to increase their profits and regard them as partners in making the most of life. With of course a good set of measures to discourage the ones that still think that Greed is good.

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