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How companies can become good neighbors

I long for the days when executives said their people were their most important assets and really meant it. When I worked for a global corporation in the 1970’s, I was somehow convinced that was so.

By the late 1980’s, I felt a tremor beneath my feet. Shifts in technology, international trade relationships and the U.S. tax code changed the game. Automation meant companies could produce more with fewer people. Moore’s Law describes the pace at which technology improves. It might well describe the rate at which companies could afford not to care about their employees.

Technology and globalization were a great benefit to companies’ bottom lines but resulted in a loss of a sense of community. Middle skilled people (welders, machinists, assembly-line workers) found themselves competing with millions of workers around the world. Highly skilled people (entrepreneurs, lawyers, accountants) could sell their services globally resulting in greater inequality.

Worse than all of that (what could be worse?), corporate leaders lost interest in investing in their communities – infrastructure and public education, for example – as the need to be competitive became more and more reliant on globally sourced resources rather than the education of local employees; and the state of railroads, bridges, and tunnels.

In a recent article in the Harvard Business Review (HBR), Karen Mills and Chris Rudnicki point to a turnaround in that trend. Indeed, one can find examples of that turnaround in local communities throughout the land. A few years ago, I cited some examples (Don’t Send Your Kid to College):

In Texas, Houston Community College provides training and certification to work on oilrigs to satisfy growing demand in the energy industry.  In Minnesota, Anoka-Ramsey Community College works with local manufacturers to provide the specific training needed to work in a modern factory — geometric dimensioning, process control and measuring tolerances.  A non-profit institution, Corporate Voices for Working Families has developed a set of best practices – a blueprint, if you will – for employers to work with local colleges and community colleges with a goal of increasing employment among graduates.

In Albany, NY, the College of Nanoscale Science and Engineering was started with $1B provided by the state of NY and an additional $13B from industry. The college is educating Americans in nanotechnology used in the manufacture of computer chips and other miniaturized electronic devices. The college has created over 13,000 jobs in that rust belt city and promises to produce graduates with world-class skills.

These initiatives are local or regional in nature. No federal tax dollars are expended; no taxes are raised. They reflect the needs of local businesses and businesses that localities are trying to attract. Is this evidence of a new communitarian trend in the business world? I hope so.

Certainly, businesses have a selfish motive. Corporations are created to serve the needs of their shareholders, after all. But it was Adam Smith, the 18th Century philosopher most associated with free market capitalism, asserted, “[w]ealth should be measured according to how well people are lodged, clothed, and fed, not according to the number of bags of gold in the treasury.”

In my book – The Reluctant CEO: Succeeding Without Losing Your Soul – the protagonist puts it this way:

“As CEO’s, we have the ability and the obligation to make things better for those whose lives we influence. We work at corporations; but we live in communities.”

Excerpt From: John Calia. “The Reluctant CEO.” iBooks.

It is my firm belief that business can restore America, be better citizens and serve their own interest as well. Companies that act in the best interest of their communities differentiate themselves from their competitors, create loyal customers and have happier employees.

In their HBR article, Mills and Rudnicki concede that “[c]ollaboration between business, government, civic groups are difficult. Those that work are the result of commitment.” They further outline four concepts that may serve as a framework for such collaboration.

When one of the nation’s most prestigious business journals begins to define a process, you can expect that isolated examples are about to become a trend.

I am optimistic! How about you?

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