The Evolutionary Model

We see Good Business as an evolutionary process. In the early stages behaviours are individual and inconsistent across an organisation; responsiveness is low because of the limitations of its organisation, culture and communication. In the more developed states, behaviours are highly aligned and responsiveness is high.

This model shows the evolution from one state of Good Business to another. This evolution is additive, building on the previous state rather than replacing all the attributes in it. This means, for example, that there are still rules in a values-based culture; risk is still managed in a company that sees Good Business as source of competitive advantage; and lag measures are still incorporated into integrated performance measurement. Businesses that don't have rules, manage risk or measure incidents are not good.

The Evolutionary Model of Good Business

There is an earlier state not shown on the diagram: a company that doesn't recognise responsibility beyond its minimum obligations to comply with the law. There are few examples of established companies that fit this extreme, although there are examples of companies that have grown rapidly and need to make a leap to Engagement as the reality of their new size and scale dawns.

The Engaged company is now common. Typically, it will have a code of conduct, which is endorsed by senior management; report its environmental and social good deeds; and actively seek to understand, separately, the ethical, regulatory, environmental, safety and security risks across its operations. The Engaged company will have worked hard to put in place many of the component parts it needs to manage compliance with its code and regulations, but the lack of integration limits effectiveness. Information flow about 'compliance issues' is extremely limited. People behave and think differently depending on where they sit in the organisation. When problems do occur they come as a big surprise; response to these is somewhat erratic and there is a low level of confidence in the system as a whole. The Engaged company thinks it is effectively managing risk, but in fact it is not doing it well at all.

The multinationals Proctor & Gamble and Unilever are competitors in the global detergents and personal care industries. Both organisations are certainly engaged in Good Business and are selectively strong in some areas. Both are becoming enabled, seizing marketing opportunities selectively in key brands. But neither has yet embraced Good Business holistically as a source of competitive advantage.

The Enabled company is less common. Its people have a broad understanding of the importance of compliance with its code and other critical policies. The code and policies exist in the context of strong and well-defined values for the organisation, which are non-negotiable. As a result people think and act similarly. There are fewer surprises in the Enabled company, with many problems avoided through early, timely interventions. Information flow among those that need to know is generally good. Reputation is key; it has been hard won and worth defending. Timberland is an example of an enabled company progressing rapidly toward enlightenment.

The Enlightened organisation is rare. Ethics, compliance and corporate responsibility are not add-ons to the core business, but they are embedded within it. Enlightened organisations are ruthlessly efficient at identifying and resolving any issues where behaviour is inconsistent with the core values of the organisation. It can do this because information flow is rich and continuous. The Enlightened company is beginning to achieve a clear advantage over its competitors because of the way it does business; Good Business is a part of its products or services and its consumers and clients recognise this. Good

Business principles are integrated with its strategy, and vice versa Better World Books illustrates many attributes of an enlightened company.

We explain in more detail the context for, models for and approach to Good Business in the following sections:

• Our DNA Model
• Our Approach for creating and sustaining Good Business