The April 2010 issue of Harvard Business Review has a thoughtful article “Leadership in the Age of Transparency”, which talks about the importance of taking “externalities” seriously.  The same authors, in this blog, ask the question, “what does business owe the world?” – and, more specifically, “Does business need a better way to think about responsibility? And if so, what is that better way?”   Below is my answer, which hopefully gets approved for the comments section …

Past trends regarding social responsibility — to tag parallel CSR initiatives onto standard business operations, and more recently, to “green” operations — are fine and good in their own right. But any initiative that doesn’t flow directly out of an organization’s self understanding of why it exists and how its unique characteristics provide a value-generating platform for customers, will be very hard to sustain — it will lack emotional, philosophical and operational integration with a business’s core.

Furthermore, ignoring externalities is simply a way of building a high degree of jeopardy into the future of one’s business. Companies that ignore the systems of which they’re a part and in which they have a dynamic effect, will reap the negative rewards accordingly. To illustrate from a subject close to my experience — as I have said elsewhere, Apartheid failed not only because of anti-apartheid initiatives, but because it was financially unsustainable. It just became too expensive to run an oppressive operation.

What is unfortunate is that too many executives see a systems perspective as too much hard work and as placing too many unappealing restrictions on their business. I believe the opposite is the case. A systems perspective blows wide open a vast horizon of multiple opportunities for building tremendous, lasting value for existing and new markets.

Is it lazy, irresponsible, greedy — or just ignorant — to keep our heads in the sand and ignore externalities?

Another soul insight from www.soulsystems.ca.