Former BP CEO John Browne knows a lot about humiliation and failure, which makes his views about corporate social responsibility all the more compelling. “Corporate social responsibility,” he says, "has been a crutch rather than a real way of engaging with the things that matter to populations.”
Browne’s latest book, Connect: How Companies Succeed by Engaging Radically with Society, is a scathing indictment of “box-checking” good works that have little connection to a company’s business and don’t do enough to satisfy society at a time when more people object to corporations and their motivations. Co-written with two McKinsey business experts, the book offers a “practical manifesto for reconciliation” between business and an estranged populace.
Much of the public’s distaste for big corporations, Browne admits, derives from scandals such as Volkswagen’s diesel emission cheating and major catastrophes such as the BP oil spill in the Gulf of Mexico. Even though Browne had been ousted as CEO before the spill, he was blamed for shaping a culture that put profits before safety and for greenwashing the company’s reputation with a rebranding campaign called “Beyond Petroleum.”
Browne’s professional hard knocks (he was fired for lying in court) and his comeback as a business adviser to British Prime Minister David Cameron have caused a self-assessment that is rare at his level of business executives. It also has prompted him to be liberal in his observations about business practices.
“Radical engagement,” Browne says, “in its simplest form is deciding that it’s not your agenda imposed on society. It’s society’s agenda taken into account by you to do your business better. And that’s a very big change.”
Building goodwill takes a bigger shovel. Browne cites BP’s decision to create an independent commission to oversee development of the Tangguh gas field in West Papua. The commission included local people and a former UN official that scrutinize BP activity and publish reports without checking first with the company.
“Corporate social responsibility wouldn’t do that,” Browne says. “CSR might say, ‘Let’s pretty up the village, let’s provide something convenient and easy.’”
Browne doesn’t have a lot of affection for PR spin. “You can’t really take a failure and use words to make it a success,” he says. “But people try. They try to do things like manage your reputation. I’ve never understood what that means. You can’t manage your reputation. It’s something that is an outcome of actions you have taken. It is the sum total – good and bad – of what you’ve done.”
The revived capitalist, who chairs a Chinese technology group and sits on advisory boards for a wealth management company and a Russian-controlled oil and gas company, says the ability conduct business depends on some level of basic trust from the public.
"Where there is a reduction in the belief that business is serving the population and there is a reduction in the amount of trust to the point where nobody believes anything,” Browne says, "then business finds it very hard to work and economies suffer.”
Browne pooh-poohs hiding behind legal advice, “Any CEO has to realize lawyers are there to advise, not run the company,” Browne says. “You are paid as CEO to make tough decisions and you’ve got to balance all these things. In the end, the truth is the best thing. I do think you get a lot of points for admitting failure."
The theme of the book is that there are tangible rewards for “creative and constructive engagement with society” in the form of corporate earnings and outperforming competition by 2 percent every year. “Connected leadership,” according to the book, “is a radical new paradigm that shows how companies and executives can thrive by close engagement with society."