17 Feb

Measuring Relationships: a route to competitive advantage and reduced risk

Mervyn King

This article originally appeared as a blog on the International Integrated Reporting Council website. It is reposted with permission from the International integrated Reporting Council.

Corporate failures and scandals often have deep relational roots. So too does success, for the essence of any business is to invite people into relationship as investors, customers, employees or suppliers and to make such relationships more valuable. Yet, as the authors of The Relational Lens recently published by Cambridge University Press point out, these relationships are too often like dark matter – the fabric of the universe that passes unseen.

As a global leader on corporate governance and reporting I have advocated since 1994 that in its decision making process a board needs to take account of the legitimate and reasonable needs, interests and expectations (NIE’s) of its primary stakeholders.

Either management must have an ongoing communication with stakeholders or a Corporate Stakeholder Relationship Officer (CSRO) should do so. The CSRO informs management of the stakeholders’ NIE’s and does a written report to the board on the quality of the relationships.  At every board meeting there should be an agenda item “Stakeholder relationships.”  This will result in the board having an oversight which is informed in regard to managements’ proposals on strategy.

The Salz Review into Barclays, the National Commission on the BP Deepwater Horizon Oil Spill, the Inquiry into the death of Victoria Climbie (a major UK public service failure), or indeed the reviews into almost any corporate failure show that weaknesses in relationships between the company and its stakeholders are readily identified after things have gone wrong. But would Volkswagen or Deutsche Bank have landed in their current situations if their internal and external stakeholder relationships had been better founded and managed?  Could the many corporate disasters, of which Enron, Lehmans, Cendant, Worldcom, HealthSouth, Tyco, Qwest Communications, Toshiba, BP and Arthur Andersen are just some of a long litany, have been avoided by a more systematic management of stakeholder relationships?

Restoring confidence in corporate, political and other institutions will require more than clever PR. It requires systematic measurement and reporting on the quality of relationships with all major stakeholders so that companies can take specific steps to address the key issues seriously.

Andy Haldane, Chief Economist at the Bank of England puts it this way in his comments on The Relational Lens: “There is widening acceptance that organizations – large and small, public and private, commercial and charitable – may be failing to meet the needs of their societal stakeholders. This has, in some cases, caused a rupturing of trust, a loss of social licence. This book … equips companies with the tools to begin the slow process of rebuilding trust, relationship by relationship.”

In corporate reporting on social and relational capital, companies have too often resorted simply to recording their CSR spend. With integrated thinking and embedding sustainability issues into a company’s business strategy CSR has become yesterday’s thinking.

The lack of available quantitative measures is perhaps the main reason why the boards of companies, as well as executives and managers, invest so little monetary, temporal and other resources into understanding, managing and measuring relationships with their stakeholders.

A way forward is shown by the new book by John Ashcroft and his colleagues, based on over 20 years of measuring relationships within and between organizations across the public and private sectors, as well as in different parts of the world. They demonstrate persuasively that all relationships operate in 5 domains – communication, time, information, power and purpose. Using these 5 domains will aid the CSRO in carrying out their mandate.

This approach identifies whether the conditions for effective relationships are being put in place and identifying perceptions gaps around the effectiveness of such measures. Looking at the preconditions for relationships serves as a way to assess a leading indicator of risk, focuses on the relational building blocks of such outcomes as trust, accountability or loyalty, identifies the factors that can be managed and changed, as well as enabling more constructive and effective dialogue about the issues identified.

All that makes this book timely, especially for the corporate world.

Here is the framework, here are the tools and the case studies to enable companies to give stakeholder relationships the kind of detailed and systematic attention which will bring an informed understanding to a board about a company’s social capital, and help bridge the divide between financial and social capitals.

‘The Relational Lens: Understanding, Managing and Measuring Stakeholder Relationships’ was published by Cambridge University Press in October 2016. A video of the launch can be found at Relational Analytics.

Author: Professor Mervyn King SC, Chairman, International Integrated Reporting Council

Photo: Mervyn King by Sveriges Kommunikatörer on Flickr.

07 Jul

Inventing the Individual – Book review

Individualism - People

Individualism and the near global preoccupation with the self and the interests of the self is increasingly becoming the norm everywhere.

This norm is an abnormality. It is destroying the foundations of what makes life meaningful, and long lasting human relations and fulfilment possible. From time immemorial humanity has been characterized by the idea of community and commonality. This ancient norm is perhaps wired into our human genes, and correctly defines a key aspect of what truly makes us human. The rise of the solitary individual, and ‘the lonely crowd’, is a paradox that has been the focus of many studies. The English poet John Donne immortalized the powerful message that:

No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main …
If a clod be washed away by the sea,
Europe is the less.

Any man’s death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.

Larry Siedentop’s book, Inventing the Individual – the Origins of Western Liberalism, demonstrates that Individualism has not always been an essential part of the Anglo-American/European ethos or of non-Western, non-European societies either. It is a new invention which arose at a certain point in the history of these societies. This development was however, progressive, eventually preferring an “association of individuals rather than an association of families” (p129).

Central to Siedentop’s argument is the pivotal role played by the medieval Church. He pays special attention to the rise of monasticism and the teachings of the Church fathers and intellectuals, such as Bonaventure, Thomas Aquinas, Dons Scotus, William of Occam and Augustine, among others. He discusses, for example, the role played by Augustine who in his Confessions (an extended prayer) focuses on “the inwardness of the individual … a sphere of dialogue, of conversation with God” (p104). By Augustine privileging prayer and grace, thus “Inventing the Individual – in the sense of acknowledging the equality of humans in the face of their maker…” (p105), Siedentop argues, he laid the foundation for “ … the demolition of ancient rationalism. The patriarchal family, the aristocratic society underlying the polis, the cosmos as a hierarchy of ends and purposes: all these became suspect and vulnerable without its support” (p104).

The European renaissance and reformation created the context for a further development and understanding of these ideas. Christian belief in the special place of prayer and grace, in the equality of souls and in moral equality before God are then seen to be the mother of Western Liberalism, together with its radical notions of human liberty, equality and fraternity.

The new secularism, and the future of these ideas cut off and without reference to their original Christian cradle and context, poses a present and real danger. The runaway contemporary naked individualism, the glaring inequalities and lack of respect one for the other, the diminishing freedoms everywhere – these are perhaps a sign of this danger. So, too, is the unconscionable greed, excessive love of money and power, at the expense of loving and empowering human relations. Siedentop very powerfully reminds us of this. To his fellow Westerners he concludes “If we in the West do not understand the moral depth of our own tradition, how can we hope to shape the conversation of mankind?” (p363).

Review of Larry Siedentop, Inventing the Individual – The Origins of Western Liberalism (Penguin, 2015).
Dr Aloo Mojola Visiting Professor in Translation Studies, Philosophy and Biblical Studies at St Paul’s  University, Limuru, Kenya.

RTN is neutral politically, and is not a religious organisation. On this website we publish articles and opinion pieces that align with our values (link to values statement on the website) but the author’s views are his own.

17 Mar

Debating India

Debating India

The Following is a review, written by Prabhu Guptara, of Debating India, by Bhikhu Parekh, (Oxford University Press, 2015, ISBN:  0-19-806045-9).

Relational themes are touched by most of the twelve essays in this outstanding book by a distinguished scholar who is now Emeritus Professor of Political Science at the University of Westminster as well as Emeritus Professor at the University of Hull, a Member of the House of Lords, and one of the Relational Thinking Network’s own Patrons.

However, three of the essays focus exclusively on relational themes.

First, Parekh’s imaginary debate between Osama bin Laden and Gandhi, conducted through correspondence:  The initial letter by bin Laden is couched in terms of an appeal to Gandhi to support bin Laden’s cause, putting forward the case for bin Laden’s approach to Islamic Jihad.  Interestingly, bin Laden comes across as someone who is neither mad nor murderous – nor an irrational person “devoid of decency and good sense, with whom no dialogue is possible”.  Gandhi responds fully and frankly.  Osama bin Laden’s retort is again responded to by Gandhi.

Though there are only two letters here from each of them, the upshot is to persuade readers that genuine dialogue is possible even between such diametrically opposed parties and traditions of thought, if each party practices, in the dialogue, what we in the Relational Thinking movement call “parity” – that is, if each appreciates what they accept as valid in the other point of view, and responds honestly.  Gandhi, for instance, accepts bin Laden’s critique of the contemporary West, but unhesitatingly puts forward the view that bin Laden attacks European imperialism “not because you are against imperialism but because (European imperialism) ended Muslim imperialism, and you attack Americans because they are preventing you from reviving (Muslim imperialism).   An imperialist yourself, your attacks on the imperialist designs of others sound hollow and hypocritical and convince no one”.  Moreover, Gandhi’s offers to bin Laden the seminal thought that he has “no patience, no plan of social and religious regeneration, no desire to deal with the deeper causes of (Muslim) social decay”.

Parekh concludes the imagined correspondence between the two by observing that it “is easy to imagine…how their dialogue would proceed.  Deep and irresoluble differences between them would remain in several areas.  (However, dialogue) with the likes of bin Laden is both possible and necessary…. (Such dialogue) can do much to improve mutual understanding, resolve some differences, build trust, and detoxicate the intellectual and political climate so necessary for the ordinary political processes to operate”.

Parekh’s point is relevant not just to the tensions and violence between Islamic militants and the West, but also to the internecine struggles between fanatical Islamists and ordinary Muslims, as well as between fanatical Hindutvans and normal Hindus in India.

Whether, at the end of the day, dialogue with people such as bin Laden will result in any reduction of violence on their part is not clear. I wonder whether Gandhi’s two attempts at dialogue with Hitler failed because Hitler lacked Indian traditions of debate?  Or would such attempts at dialogue have succeeded if they had been undertaken much earlier in Hitler’s career?  Perhaps “dialogue” alone is too thin for such purposes, as it succeeds in providing, at best, what we Relationists call “directness”; and that needs to be enriched by increased “commonality” and “multiplexity” – a process that was enabled by systematic and wide-ranging research, in the Newick Park Initiative (http://www.jubilee-centre.org/history-newick-park-initiative-jeremy-ive) which is what succeeded in defusing at least some of the potential violence surrounding the end of apartheid in South Africa.

Second, Parekh’s essay “Friendship in classical Indian thought”:  he points out that the conditions in which friendships can arise and flourish “do not obtain in all societies, and hence friendship is not a universal phenomenon”.  So the essay asks whether “Indian thinkers identified a form of relationship broadly analogous to that of friendship as we generally understand it” and, if so, “how they analysed its nature and structure, and what value they placed on it”.

He picks, for particular examination, the two great epics, the Mahabharata and the Ramayana. Taking his orientation from the contrast between anthropocentric/ theocentric views of the world dominant in the West, and the cosmocentric view of most Indian thinkers, he writes: “For (Indians), the natural world was an internally articulated and ordered whole whose constituents were all its ‘co-tenants’ enjoying the right to exist and avail themselves of its resources.  Human beings therefore had a duty of friendliness and goodwill towards each other as well as other orders of being” – meaning flora and fauna.

The question that arises is how this philosophy of universal goodwill produced something as oppressive and inhuman as the caste system and, even today, does not see the contradiction between universal goodwill and casteism.  Not only that, this philosophy of universal goodwill seems to have taken little interest in even attempting to seek any explanation for the rise of the contradiction, or for the existence of that contradiction for centuries.

Is it possible that ‘universal goodwill’ functions, then, as a comforter, which distracts from recognition of the reality of the ‘universal ill-will’ that is maintained by the caste system?

In any case, Parekh concludes that, for classical Indian thought, friendship “is one of the noblest of human relationships offering joy, love, security, and all else that makes human life rich and full”; that while Indian traditions are “rich in … detailed exploration of the different forms and dilemmas of friendship…it is poorly theorized” by Indian traditions; that Indian traditions do not “give as much importance to the bonding of heads as to that of hearts; that, in Indian thought, “friendship does not seem to play the kind of epistemological role that it does in some other traditions”; and that it is surprising that “there has so far been no systematic study” of Indian traditions regarding friendship.

That is indeed surprising, since my own childhood experiences of friendships in India contrast so much with friendships that I see among my children in the West.  For example, Indian friendships are in the nature of an emotional contract which cannot gradually slacken and starve, but can only be broken with a rather sharp gesture accompanied by verbal statement to that effect.  At least in Punjabi, there is even a word (“kutti”) for the breaking of a friendship.

Third, the essay on “Ambedkar and the Pursuit of Fraternity”:  Ambedkar is best known as the Father of the Indian Constitution, through which he tried to institutionalise the pursuit of equality and fraternity in India. The Huguenot ideals of “liberty, equality, and fraternity” (later kidnapped by the French Revolution) are well known throughout the world, and it is worthwhile reflecting briefly on the similarities and differences between these notions and some of those that are essential to Relational Thinking.

“Liberty” does not loom large in the Relational Thinking vocabulary, primarily because in the Relationist view, liberty needs to be balanced by responsibility, and contemporary culture overemphasises liberty; by contrast, we Relationists probably under-emphasise liberty in our effort to bring responsibility back into some semblance of balance.

Incidentally, the notion of liberty by itself did not mean much to Ambedkar either. In his view, “liberty” needed to be grasped as two different entities: “political independence” (e.g. from the British, which is what Gandhi and the rest of the Indian elite were obsessed with); and “social liberation” (from caste-based oppression, from which the vast majority of India’s population still suffer) which was Ambedkar’s focus.

From those brief remarks on “liberty”, let me move on to “equality” – which is a legal notion, to do with one’s relative status in the eyes of the law.  That contrasts with the Relational concept of “parity”, which is an inter-personal dynamic, to do with each party’s use of power to enable the best win-win environment for both parties.

Further, if we move on to the notion of “fraternity”, could it not be argued that that is rather like “good relationship”?  Well, “fraternity” is an inspiring vision or goal which remains rather abstract, unless fleshed out by detailed thinking covering many areas of life, society, economics and politics – of the kind that is provided by Relational Thinking.

Now, to the gist of Ambedkar’s work towards these goals or values, which Parekh puts well:

Unlike classical Indian thinkers, Ambedkar did ask why Hindus never protested against or even felt embarrassed by the practice of untouchability.  In his view, it was primarily because of their commitment to the doctrine of karma with its concomitant belief that one’s situation in this life is due to one’s sins or virtues in previous lives.

Such beliefs are also why India lacks what Ambedkar called a “public conscience” or “public spirit”.

So much is this the case that “Hindu society” cannot exist, because there can be no “society” in the absence of shared sympathies: “In India people are treated with contempt, yet it does not sicken an Indian with disgust, rouse his sense of justice and fair play, … his humanity does not rise in protest at what is going on around him” as Ambedkar himself put it or, as Parekh puts it: “Being entrenched within a way of thinking that reduce(s) human beings to their membership of particular castes, Hindus could not see untouchables as human beings like them, let alone as fellow members of a shared community.  Not surprisingly, they rarely took interest in, let alone campaigned against their degrading and inhuman status”.

For Ambedkar, eradication of untouchability “involved nothing less than a social revolution, a radical restructuring of the very foundations of Hindu society….(through) relentless struggle, an uncompromising, determined, organized … movement by untouchables with a view to acquiring political power, the key to all social progress”.

Since Ambedkar failed to achieve this, and failed even to create a political party of any longevity, he focused on “using the institutions of the state to create an egalitarian and casteless society”.  Ambedkar knew that this was not going to be easy, “because of a deep tension at the very heart of the Indian polity”.  The Constitution, framed principally by Ambedkar, committed India to the great ideals of liberty, equality and fraternity, but these are largely absent in its daily life.  As a result, state and society pull in opposite directions.

That contradiction could only be resolved, in Ambedkar’s view, by “the state dominating and systematically shaping society in the desired direction.  Since the objectives of the state are alien to Indian society, they could only be realized if the state was led by a determined Westernized elite.  If the state became a hostage to society as was the case for centuries in premodern India, or was led by men and women with no commitment to these objectives as in colonial India, Ambedkar saw no hope for the country”.   Parekh expresses no clear view regarding whether Narendra Modi’s election as Prime Minister portends the capture of the state by a party with no commitment to the values of the Indian Constitution – and therefore whether the Indian State is at present hostage to traditional Indian society.  Perhaps the manuscript of the book was sent to the press well before the shape of the actions of the current government became clear.

To return to Ambedkar’s strategy: the question raised by it is whether fraternity can ever be an institutional objective, let alone an institutional achievement.  He saw, of course, that fraternity was impossible without equality, and so he lowered his sights to using the Constitution and related legislative mechanisms to achieve at least political equality, without which social equality and fraternity have no hope of emerging.

The question Parekh does not ask is:  why did Ambedkar fail to rouse the majority of the country to exert themselves to achieve the self-evidently beneficial goals of fraternity and equality?  Could it be that emotional appeals successfully inspire those who are emotionally-inclined so that they are prepared to make enormous sacrifices?  However, for those who are inclined to be less emotional, such appeals to overarching goals need to be supplemented with a comprehensive programme consisting nevertheless of actions of varying shapes and sizes to suit people in different circumstances (a programme such as is developed by the Relational Thinking movement)?

In any case, as Parekh points out “the idea of fraternity is neglected in much of modern, especially liberal, political theory”.  He lays out and assesses Ambedkar’s signal contributions to that, as well as his enormous contributions to the making of modern India.

I wish I had the time and space to explore here the rest of essays in this collection, which are on other fascinating themes such as the choice of the National Symbols of India, the debates between Gandhi and Tagore, Einstein on Gandhi’s non-violence, Gandhi and inter-religious dialogue, the unfortunate narrowing of the perception of Gandhi’s philosophy to non-violence, the question of India’s National Philosophy, and reflections on the successes and failures of democratic politics in India.  Each of these has relational resonances.  I’m sure the Relational Thinking Network would welcome wider discussion and debate not only about the matters I have raised in this review, but also about other matters in Lord Parekh’s richly multifaceted book.

Prabhu Guptara is an executive member of the board of Relational Analytics.