The troubled world of global business needs an updated version of capitalism that bridges the gap between fiscal and social responsibility, recently retired Coca-Cola chairman and CEO Neville Isdell told Thunderbird graduates May 1 during commencement exercises in Glendale, Ariz.
“We need leaders who will help update capitalism for the challenges the world faces today,” said Isdell, who received an honorary doctor of international law during the ceremony. “The world needs leaders who are culturally aware, who are able to adapt and to work globally. And the world needs, more than ever, leaders of the highest ethical caliber. In short, the world needs more T-birds.”
Isdell, a native of Ireland, started his career in social work but crossed to the corporate side in 1966, when he became a management trainee for Coca-Cola in Zambia. He said the gap between business and the social sector was wide in the 1960s.
“There was no middle path back then,” he said. “There was no connection.”
He started working at Coca-Cola determined to find that connection — a “dynamic intersection” where business and social responsibility converge. Under his leadership, the company reached high levels of employee engagement and earned recognition for its mission to promote environmental sustainability.
These efforts resulted in Coca-Cola’s return to Fortune’s “World’s Most Admired Companies” list in 2006. In 2009 the company moved up to No. 12 in the global ranking.
“I realized I could do more good in the world of business to better people’s lives and to better society than I could do in social work,” said Isdell, who retired for the third time on April 22. “I realized that one can pursue both business and improving society at the same time. In fact, they go hand in glove.”
Isdell called the updated version of business “connected capitalism.” He said businesses that prosper in 21st century will be those that make four critical connections.
Connected to community
The first connection that business leaders must make is with their local communities.
“We must become – both in perception and in reality – part of the local fabric of everyday life in the communities in which we operate,” Isdell said. “Globalization without localization creates alienation.”
In the end, he said, businesses must be seen as us and not them.
Connected to governments and nonprofits
The second connection that business leaders must make is with governments and social sector organizations.
Isdell said business, government and social organizations can form a “triangle of sustainability” to address global challenges such as hunger, poverty and global warming.
“It’s going to take those three elements of society to create the scale and the multiplier effect that allows us to effectively address these challenges for which the order of magnitude is huge,” he said.
Connected to sustainability agenda
The third connection that business leaders must make at the core of their organizations is with the sustainability agenda.
“In the past, businesses practiced philanthropy,” Isdell said. “But there was no focus in those investments. Today the sustainability agenda needs to be inherent at the core your business.”
He said such focus on sustainable prosperity creates legitimacy for companies with their boards, shareholders and employees.
Connected to employee values
Finally, business leaders must connect with the values of their employees.
Isdell said employees at all levels of any organization do things in their personal lives to improve their communities. They volunteer at their children’s schools, at church or even with youth sports teams.
But they leave these values behind when the come to work. “So often when we enter the workplace, it’s almost hermetically sealed,” he said. “That connection is not there within the business.”
He said leaders that learn how to bridge this divide end up with better employees who are better motivated and better engaged.
“The world has changed,” Isdell said. “Our new era requires new types of leaders — people who don’t rely on the old dictum that the only purpose of business is to enrich shareholders. That is insufficient and inappropriate in today’s world.”
Overall, Thunderbird awarded 239 graduate degrees and 38 certificates to students from 35 countries during the ceremony at the Renaissance Glendale Hotel and Spa. Isdell’s honorary degree was the 36th that Thunderbird has awarded in its 63-year history.
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