Living with Paradox

May 2007

As I follow the evolution of corporate citizenship, I am continuously amazed by the quickening of change and, perhaps as a consequence, the longing for stability and security. 

Not that long ago corporate citizenship constituted compliance with the law and making a few appropriate contributions in the community. Today the remit of citizenship seems almost non-ending, with an ever-expanding circle of roles and responsibilities confronting business around human rights, the environment, ethics, supply chain, microfinance, bottom of the pyramid, stakeholder engagement, ethical consumerism, and other issues.

And if this ever-expanding scope is not jarring enough, the pace of this change is equally demanding. I can spend a day with one of our member companies and become well educated with their challenges and strategies around citizenship. But if I were to return in six months or a year, I would almost assuredly see major changes including new structures, strategies, and most importantly, new conversations and new challenges for the business.

Sound familiar? This is the nature of life today inside and outside the company. It constitutes one of the biggest challenges of the day — how to cope with the inevitable turbulence that defines our time.

This is particularly difficult since people are conservative by nature, and prefer to keep things more like they are than shifting to something new that might be different and outside their comfort zone. We strive for and crave security and structure. So that introduces us to our first paradox: We are for the foreseeable future in a world of continuous change and looking for stability and security.

A little over a decade ago, British management guru Charles Handy used the device of paradox in his book, The Age of Paradox, to assist individuals and organizations in navigating the turbulence of change.

Along the same vein, if the complexity of the issues and problems related to corporate citizenship cannot be solved absolutely, it may be helpful to manage them by recognizing the paradoxes.

The paradox framework maintains that two contradictory sets of values can be true at the same time. It frees us up to better understand and manage the complexity of change and balance contradictions and inconsistencies.

Some would say that corporate citizenship is nestled within the ultimate paradox of maximizing profits and contributing to the overall social good. Others would call this an oxymoron, but let's save that discussion for another day.

More to the point, let's take a look at a few of the more immediate paradoxes we live with in this world of corporate citizenship.

1. Business in the 21st century is the most admired and influential institution and the most mistrusted. Business has become the dominant institution of our times. However, with all the benefits that its power and influence can offer, business has become the least trusted institution in society. Trying to create corporate citizenship as a business essential within this situation remains an uphill battle unless the very paradox of this position is better understood and remedies are taken. Mistrust will always trump any citizenship programs or communications, however sincere they may be.
   
   
2. Companies are expected to comply with the law and are ultimately judged on how they deliver on the spirit of the law. Much emphasis is placed on the compliance aspect of corporate citizenship, as evidenced by offices set up in the areas of ethics, environment, health and safety, and, since the introduction of Sarbanes-Oxley, governance. This paradox involves differentiating between the spirit and letter of the law. Of course, compliance is important, but be aware that most stakeholders are judging citizenship by how well a company manages against the spirit of the law. No company has ever complied itself to excellence; creating a culture where the spirit is as critical as the law is an ongoing challenge in leading companies. 
   
   
3. Corporate citizenship has to be managed within a global context and operationalized on the local level. Corporate citizenship is clearly a global issue. Supply chains, the easy flow of capital, and the internet guarantee the global nature of doing business for both small businesses and large multinationals alike. At the same time, to paraphrase a great American politician, all citizenship is local. The execution and implementation of citizenship occurs every day in every location and involves every employee. Risks and opportunities to the business are more likely to occur on the local level, yet have implications across the globe. Managing both the local and the global is critical to the business and a paradox for those responsible.
   
   
4. Corporate citizenship operates within a short term business model and is focused primarily on environmental and social issues that are long term in nature. While the contemporary business model is structured along short term returns to the market, corporate citizenship confronts issues that are anything but short term, from climate change to education. Holding both short and long term perspectives is a challenge at best, and more often resembles a clash of cultures.

These are but a sampling of the paradoxes managed by those committed to corporate citizenship. F. Scott Fitzgerald once said that the test of a first class mind was the ability to hold two opposing ideas in the head at the same time and still retain the ability to function. This perhaps best defines the challenge to those championing corporate citizenship in companies across the globe. Success and excellence is not the attaining of awards and rankings, but rather understanding and communicating the complexities and contradictions embedded in the practice of corporate citizenship.

As Handy tells us, "There are pathways through the paradoxes if we can understand what is happening and are prepared to act differently."

Paradoxes keep us honest and flexible. We do not live in a world of absolutes, and trying to construct programs and communications that imply that we do misses the deep roots of paradox embedded in corporate citizenship. Framing these paradoxes is a critical part of defining roles, creating strategy, and communicating to multiple stakeholders the complexities of corporate citizenship.

I have shared only a few paradoxes confounding companies today. I would love to hear about the paradoxes you live with and begin an exchange of ideas that we can share in future newsletters. Please email me at googinsb@bc.edu.