The role of business in an inclusive economy

Nearly ten years ago, in the midst of the global financial crisis, I found myself at work late into the night, planning the restructure of our firm. This was the worst thing I have ever had to do – taking decisions that I knew would have severe consequences for some of my colleagues and their families.  That experience added to my personal resolve to do business in a different way that addresses systemic issues and inequality in our economic models.

Through the recession we saw that those businesses with wider social, economic or environmental goals generally performed better. Our belief is that profit with a purpose leads to sustainable business. We are very clear. If we focus on our purpose of shaping a vibrant economy, we will make better choices on who we work with, what we do, what we speak out on and how we act as a business. Doing this will ensure we are future fit, innovative and remain relevant to our clients, people and the communities we serve.

Doing well by doing good

This is good business sense. We work across the economy and see our clients affected by ever faster change, complexity and volatility. Our sector is ripe for disruption and is being transformed by automation. Addressing society’s wider challenges will help us stay relevant to customers, providing long-term value and mitigating future risks. As a business that is based on our people, creating an environment where people are inspired to come to work and to make a difference is crucial.

We are turning our business inside out in order to align everything we do to our purpose. The three areas in which we believe we can make the most impact and deliver our purpose are:

• Building trust and integrity in markets, which is vital in securing investment in the UK and for innovation to take hold.
• Unlocking sustainable growth, with dynamic organisations creating jobs and a positive financial and social impact in the communities they serve.
• Creating local environments – from transport and healthcare through to education – where businesses and people flourish.

What gets measured gets done

For too long we have defined economic progress by reference to GDP alone, which provides too narrow a focus. The United Nations Sustainable Development Goals (UN SDGs) provide a great basis for measuring an inclusive economy at global and national level. At Grant Thornton we are looking at how we can translate this to local economies. We drew on discussions across the UK to produce our Vibrant Economy index, which identifies 6 broad objectives for society: prosperity; dynamism and opportunity; inclusion and equality; health, wellbeing and happiness; resilience and sustainability; and community trust and belonging.

Individual businesses also need a way of translating the UN SDGs into their strategy and operations. Together with a number of other organisations including Body Shop, Novo Nordisk and Brunel Pension Partnership, we have been working with an organisation called Future-Fit who do just that.  At Grant Thornton we are now in the process of using this business benchmark to begin to measure our progress and assess our impact.

Shared enterprise and purpose

In 2015 our partners voted to transform the business into a shared enterprise, with shared decision making, shared responsibility and shared rewards. We know that if we really want to create value for our clients in a more impactful way, then we need all of our people thinking, contributing ideas and taking responsibility for making them happen.

Value comes from diversity of talent and perspectives. Together with other firms across the accountancy sector, we are working to increase access to our profession for those from more disadvantaged backgrounds. Whilst we have more to do, we are proud to have been recognised this year as the top employer for social mobility.

Our purpose of shaping a vibrant economy acts as a call to action, guiding and challenging us each day. A key aspect of this has been the reshaping of our client portfolio: who we work with and what we do for our clients. Over the past two years we have replaced 20% of our profits through selective exiting of certain streams of business and investment in others which are more consistent with our purpose. We are transforming our client take-on process to focus on the characteristics, behaviours and values of potential clients and how they relate to our purpose-led strategy and values. We want to work with a client base that will reinforce our purpose, helping to create real sustainable value for the firm and the economy.

Connections and collaboration

As a firm we advise over 51% of the FTSE 100, are the leading auditor to the public sector and our private sector clients employ more than 6.3 million people in the UK. We believe that we can use our reach and influence to convene people from different sectors to deliver meaningful change.

Our local offices were an important place to start, given that the UK has the greatest regional economic disparities in the EU, with huge potential economic gains if we can address this. Over the last two years our people in seven cities including Sheffield, Birmingham, Manchester and Reading have led “live labs”, bringing together people from the public, private and not-for-profit sectors to collectively identify practical steps to address the big issues affecting their region. We have shared the outputs from these discussions to enable other businesses to think about how they can support inclusive growth in their community.

It was through such collaborative discussions that we also drew up a set of policy recommendations in June, “Shaping a vibrant economy: A blueprint for the UK”. Our proposals include ‘mainstreaming’ impact investing in financial services; putting collaboration at the heart of the UK’s industrial strategy; and devolving powers to foster vibrant local economies. We also made a set of commitments to action we will take, including helping UK businesses to export and supporting innovation in cities and public services.

Growing a movement

Two years into our journey, we are starting to see the impact of our approach. Applications from people wishing to join us as trainees have increased by 20%. Ideas we have developed around Vibrant Economy have stimulated innovation in the services we offer. Market surveys show that last year we outperformed our sector in terms of the increase in the number of potential clients considering working with us.

Our approach is leading to more conversations with other business leaders who are also seeking to do things differently, from dynamic start-ups to very large firms. We are celebrating some of these new leaders through our Faces of vibrant economy network – which we hope will inspire the next generation.

We are finding that our people and clients are motivated by coming together around shared purpose. That liberating them from hierarchy and connecting communities of people is starting to unleash their full potential. And that collaboration, not competition, can create greater innovation and impact.

This gives me great optimism that we are seeing the growth of a new movement, where businesses collaborate with civil society to build an inclusive economy in which people and communities realise their potential. A vibrant economy where no one is left behind.

Sacha Romanovitch is CEO of Grant Thornton UK LLP. She can be followed on Twitter @romanovsun. Grant Thornton can be followed on Twitter @GrantThorntonUK.