I recently participated in a panel at a Labor Day event organized by the UGT (a socialist labor union) here in Barcelona. We were discussing the future of work in Industry 4.0, and the point I made was: in the face of change, the question regarding what is essential, what should not, or perhaps cannot, change is of paramount importance. So in this case: What is work? And is it intrinsically good? To put it another way: If we could provide income to cover the personal, familial and leisure needs of a wide swath of people whose jobs have been eliminated by technology, would that be desirable?

This question is crucial, and was given a clear answer by Yuval Harari, a guru of Silicon Valley visionaries including Mark Zuckerberg and author of the much-acclaimed book Homo Deus. In a recent piece in The Guardian, Harari wrote that jobs will certainly be destroyed. He thinks that’s not, however, terrible news since humans have always found alternative ways of creating meaning in their lives through what he calls forms of “virtual reality” — i.e. artificially constructed narratives and games such as religion. So, a combination of universal basic income and highly realistic forms of virtual reality could satisfy that thirst for meaning.

Some days ago, Zuckerberg gave an astute commencement speech at — guess where? — Harvard, the university from which he never graduated. The Facebook CEO rightfully addressed the need for purpose, and the challenges to building purpose in a world in which jobs are being transformed (if not altogether wiped out), community bonds are weakening, and inequality is growing. With an idealistic tone, Zuckerberg challenged his generation of millennials to come up with a new social contract. He called for a society in which everyone has the opportunity to create purpose and to pursue it, guaranteed a cushion provided by universal basic income. Of course, entrepreneurial initiative is depicted as the quintessential purpose-creating activity, with its trial and error dynamism.

But let’s get back to my audience of somewhat less sophisticated manufacturing workers. To my philosophical questions someone intervened: “Abandon work? That would be the end of our Judeo-Christian civilization! The Bible says: You will work by the sweat of your brow.” I was surprised — and pleased — by that profound observation which went straight to my point. I had to complete his reference, remembering that the book of Genesis affirms “the Lord God took the man and put him in the Garden of Eden to work it and keep it”. It was only after what theology calls “original sin” that the burden of sweat and toil was placed on our shoulders; a symbolic explanation of the ambivalent nature of work, capable of making us and our communities flourish and of alienating us.

“Without work, without work for all, there will be no dignity for all”

Surprisingly, Pope Francis jumped into this debate last week, addressing the same issues almost word for word while answering the questions of working people during an encounter in Genoa. The questions highlighted the economic angst of our times: uncertainty about the future, unemployment, low wages, unending working hours, work/family life imbalance, etc. The answers, deeply held convictions, stemmed from the Pope’s experience and — yes — the Bible.

Pope Francis also called for a new social contract, in language resembling that of Zuckerberg and many others. He would obviously praise Zuckerberg’s appeal to create purpose and meaning —though Francis would say finding purpose, I suppose. However, he was specific about a point he has made at other times:

Men and women are fed through work: by work they are “anointed with dignity”. For this reason, the entire social pact is built around work. This is the core of the problem, because when you do not work or you work badly, you work little or you work too much, it is democracy that enters into crisis, and the entire social pact. 

Make no mistake, he showed awareness as to what technology might bring in terms of working conditions and had no regrets about it. However, he extracted conclusions from this premise that question the universal basic income approach typical of technological visionaries:

It is therefore necessary to look without fear, but with responsibility, at the technological transformations of the economy and life, and not to be resigned to the ideology that is gaining ground everywhere, that imagines a world where only half or maybe two-thirds of the workers will work and the others will be maintained by social subsidies. It must be clear that the real goal to reach is not that of “income for all” but rather “work for all”. Because without work, without work for all, there will be no dignity for all.

The crucial issue again is the question about the nature of work, its essence. As the Pope affirms:

The work of today and that of tomorrow will be different, perhaps very different – we think of the industrial revolution, there was a change; here too there will be a revolution – it will be different from yesterday’s work, but it will have to be work, not pension, not retirement: work.

It seems there is something specific to work as a source of meaning and dignity, which is different from a merely instrumental way of making a living, or at the other extreme, as a way to express individuality.

In his responses, Francis seems to point to a trio of elements, which are usually considered separately: work is a service to others, individuals and communities; work demands sacrifice and effort; and work must include a measure of human creativity and freedom.

Francis wasn’t at our talk at the UGT that day, but I think the audience of workers, just by discussing this issue in an open way, came out with very similar conclusions.

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One was whether ethics were not too strict: in short, saying something is either right or wrong, leaving no room for manoeuvre. Well, that’s what many people believe; in fact, we humans are not monochrome, but composed of many tints and hues. With that in mind, there are some ethical decisions that are clearly bad: you cannot, for example, voluntarily kill an innocent man, whatever good may come of it (I won’t go into detail here, as if one could let someone die, or not prevent their death).

Aside from such examples, which in the business world are very uncommon, there is a wide range of things, good, bad and ugly. That is, ethics is not usually black and white. This is what makes life so interesting.

Giving money to a person in financial need can be very good, but doing it to prove oneself, to look or feel good, isn’t so good. It goes without saying that giving him money on the condition that he use it to harm another is clearly bad. Likewise, stealing is bad, but stealing the gun from a killer willing to use it is perfectly acceptable, is it not?

Another question came from the opposite side: about ethics being too flexible, variable; the advantage of law or regulation is that it is (generally) very clear: either black or white. Well, first of all, the law is not so clear (every law has its loophole, as the saying goes), it cannot take every possible situation into account; it’s reactive and sometimes unfair. So, ethics may seem ethereal and imprecise, but only if we are not willing to work on them.

Ethics is a set of guidelines, sometimes clear, often not so. And “goods”: be good, do all the good you can… All? Heavens! That’s very ambitious. Well, you can see that ethics can be extremely demanding. And practice virtue.

Ah! This virtue of which I speak; it’s so important because ethics, as I have said, is not a matter of yes or no, but of nuance. For a very, very selfish person, giving up their seat on the bus so a handicapped person may sit could be a heroic act; for a generous person, it should be normal.

When you acquire the virtue of generosity, humility, or sincerity, you progress, you can, and thus should, do more. That is why ethics are so important: St. Augustine said (though perhaps not referring to lay ethics): if you say “enough”, you are lost.

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However, answering this question well requires us to talk at length about what Social Responsibility is, why and how we do it, and so on.

If the reader answers that Social Responsibility is what everyone does because society demands it, that it has to be done because one day it will be obligatory, and meanwhile I mustn’t appear irresponsible, of course, I will say yes, it is best to see what others are doing, copy them and, if we are going to copy, copy those who do it well.

That’s benchmarking. Well, not exactly: it’s comparing ourselves with those who do it better in order to learn.

If you tell me that you do it because everyone does it and it’s OK, then copy. But if you tell me that you do Social Responsibility because you are responsible in all your actions and in every corner of your company, that every day your desire to improve is greater, then I will tell you to avoid benchmarking. Or, better still, learn from the best, but do not copy them.

What happens is this: if the best do Social Responsibility because it is ingrained in them, because they yearn for it, because they are constantly asking how they can improve, then it is difficult to learn lessons from them. The issue is not about doing what they do, but about thinking how they think in order to do what you think you should do, not because it is what they do, but because you always want to be responsible and work at the highest level. By all means, try it. Look at what they do, but not to copy them for the sake of copying, but to open new horizons on what you must do.

And, of course, do not ask them what else you should do, because Social Responsibility is not, in my opinion, about doing more, though I am aware that some make a living by imposing obligations on others. A responsible driver is not the one with the most flashers, horns, television cameras and alarm clocks so as not to fall asleep, but the one that looks ahead and tries to drive better each day. If to do this you need to do more, do it, but the question is not “what else should I do?” but “what should I do better?”

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We all remember cases like Volkswagen, caught lying about the very real emissions of nitrogen oxide from their diesel engines, or Toshiba, that in 2014 exaggerated its profits by more than 1,200 million dollars (about a third of the total). It is not always a question of deceiving people who have a right to know, or falsifying relevant information.

Hiding information, another form of deception

Sometimes the problem is simply not giving, or presenting information in a very incomplete manner. This is what happens with some large companies’ sustainability reports.

In some cases the concealment of information is particularly serious as it affects people’s health, hiding occupational risks to the health of the worker, for example.

An economistic view of the company leads to deciding what to disclose via a cost-benefit analysis. Arguing in terms of risk or reputation, you can even add some consideration of the longer-term consequences, always in economic terms. The problem is that when the risk of being discovered is seen as remote and it is not clear if the investment in reputation is profitable, the reasons for revealing information disappear.

Transparency and corporate culture

The economistic view is poor not only because it ignores important but not strictly economic aspects of reality, but also because of the instrumental rationality inherent in economism. Such rationality is limited (bounded rationality), among other things because it is difficult to foresee all the consequences resulting from not disclosing relevant business information.

The alternative is to act with full rationality, not just with instrumental rationality. Practical rationality, as Aristotle explained, leads to rationally valuing aspects that are neither tangible nor economically valuable. One of them is learning within the organization. Practicing the concealment of relevant information is learned by being done, so and there is no guarantee – rather the reverse – that this learning does not turn against those who promoted it. One way or another operating in a certain way improves or corrupts a character and generates a culture of permissiveness.

Even more important: Practical rationality leads to seeing how the action of disclosing or concealing information affects others. When people are seen as beings with dignity and rights and it is appreciated that actions can help or hinder them, the people who practice it are morally enriched: they believe in virtues. On the other hand, when people are seen as merely the means to one’s own interests – or if you prefer, what are considered to be the interests of the company – objectifying people becomes “learned”, with a progressive loss of appreciation for their dignity and rights.

The latter is not only unethical, but also very risky in the long term for the business, because the people affected are not inert beings, but conscious, free beings that learn. If they are deceived or have relevant information hidden from them, they will learn that they are not loved and with this realisation, one cannot expect their reaction to be one of trust, loyalty and a willingness to cooperate. Acting virtuously gives greater guarantees than thinking only in terms of risk management.

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In a broad sense, the innovation applies to products, services and processes which through the use of technology introduce quite often, radical changes. We also find innovation in concepts, some successful such as “sustainability”, “microcredit” and the “collaborative” or “sharing economy”.

At first glance, innovation appears to be ethically indifferent and its moral valuation seems solely related to its use. Social networks, WhatsApp messages and the like can facilitate a close relationship such as that of capturing terrorists. Internet fosters both the search for information just as much as its distribution (dispersion). It’s true that responsibility lies with the user, but at the same time it is also true that innovation often brings important consequences for people and communities alike.

An example at our finger tips is the influence tablets and smartphones have on our lives today – unimaginable a few years ago – or the impact of social networks on the multitude of people.

Innovation: How Technology Has an Impact on People

What is clear is that innovation is not just technological or economical, but also ethical and social. Innovation can contribute to the creation or destruction of jobs, the fight against crime, the invasion of privacy, finding the cure for hereditary diseases or the manufacture of synthetic genomes. Innovation is related to education, interpersonal dialogue, participative democracy and new and innovative economic models.

Responsible innovation is crucial. But it is not always easy. We are in a complex era full of disruption that requires careful consideration, especially in relation to the positive and negative consequences associated.

Such consequences are not always easy to predict, but it is necessary to try. And in any case, it would help to follow each innovation to analyze its outcomes. And from this point on it requires creativity to humanize innovations.

New isn’t always a synonym for good, yet it can mean more effective in some cases. Let’s take, for example, lethal weapons which eliminate human lives without consideration. From this we learn that purpose-driven innovation needs to include the possible consequences for people and its integral development.

Innovation generates challenges for those who study business ethics as it raises the question of new situations and unchartered waters. The ethical reflection needs to start with a deep understanding of the phenomenon. That is what happened with the new financial instruments of the 15^th and 16^th century and with the post-Industrial Revolution “labor question”. This calls for serious interdisciplinary investigation to fully understand this phenomenon.

Psychology and Sociology provide empirical data and history the memories of the past as reference. The moral reflection needs to take into account the empirical data, weighing up the good of the people and in light of the virtues that contribute to their flourishing.

Avoid Abuse and Addictions

Virtues and human flourishing were around long before innovation. You don’t have to innovate virtues, as they are an inherent part of the human condition. But it necessary to live them in other contexts. For example, the virtue of moderation (self-restraint) or temperance which help to avoid overuse or abuse which can lead to addiction in some cases. In the past these referred to aspects such as over-indulging in food, drink, social debauchery, or gambling. Today there are new additions to the list of things that we need to control. We need temperance when faced with videogames and with pornography, which has spread through the use of new technology at an immense rate and prevents us from dedicating ourselves to more important tasks.

Even if we have human values, and as such fundamental ethical principles in common, we need to have moral discernment in local, international and global contexts. Openness and dialogue are needed without pretending to resolve everything with national values, nor applying universal principles without considering the specific circumstances and the cultural context. The first would be relatively cultural, the second extreme rigidness that lacks practical wisdom. Without cancelling out fundamental principles, rules and virtues we need to learn to apply them to innovation. The ethical reflection needs to give rise to conclusions that allow for informed social debate.

And last but by no means least, ethics does not only evaluate, it also impulses us to do the right thing, to do well and this way we have a proactive role in innovation. Moral motivation leads to moral imagination, which is why great innovative social companies have come about from thinking of how to make the world a better place, in finding a solution to world poverty or creating employment for disabled.

In short, ethics brings criteria for evaluation, it show us ways to humanize innovation and increase moral imagination for innovation built around people and serving their needs.

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For example, it’s common practice to consider the ethical attitudes of others worse than our own. Or that when we receive information about a topic, we tend to take whatever snippets favor our own position. And in doing so, we sweep to the side and quickly forget the opposing information. Another one is taking that what is said by many as truth, just because (almost) everyone is saying it. And the list goes on…

The discussion focused on the argument that the attitude of a reasonable person, when presented with such biases, including the heightened probability that we too are biased, impairs our judgement and leads to us to making the wrong decision.

What we were all in agreement about was missing in our classes and conferences about ethics, is highlighting the existence of these biases, their importance and just how difficult it is to detect and correct them.

For me, it seems that this leads us to the virtue of prudence. The old treaties of morals tend to indicate the importance of seeking advice at the moment of judgement, or deciding. And if the advisor is like he or she should be, they will make us aware of the possible existence of these biases.

Past experience and memories also have a part to play, as they allow us to understand the mistakes we make and how to prevent them. We can also observe how others who have good judgement conduct themselves and learn from them. Which takes us to the act of avoidance of the rationalization of our acts, with arguments such as “it doesn’t hurt anyone”, or “you’d have to be a fool to believe what I said”, “everybody does it”, “he probably thinks the same”, “it’s not that bad”. At the end of the day, it’s about learning to be ethical just like children – by presenting our ideas clearly, listening to our parents or teachers, contemplating everything we have thought.

A possible scenario in class might be, for example, inviting those who have said something in haste or without thinking first, and positing that stop and think about what they have just said. We have the power to help them with this by inviting them to listen to what others think of the case.

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Is this the goal of ethics or social responsibility (SR)? Why do we need ethics, if the law is intended to encompass everything, and covers us enough as it is?  Does compliance make ethics or SR unnecessary? No. Actually, they have different goals.

• Compliance is about ensuring that the actions of executives, employees and suppliers do not go against regulations or standards. Objectives are set outside the scope of the company, by society, governments and judges, and companies accept them and try to avoid doing evil, to stay clear of problems.
• Ethics takes another approach: It is about getting executives and employees to always act responsibly, and looking out for what is best for the company, customers, colleagues and peers, and society. The goals are set by the company: Do good—don’t just avoid evil. What good, exactly? That is up to each company to answer: for its customers, its suppliers, its employees, its neighbors… And don’t be evil, not only to avoid problems, but because of your pursuit of excellence.

That is why ethics is built on three things: goods, standards and virtues, while compliance is built on standards alone .

Goods

I explained these before, leaving their definition and explicit communication up to the company, its executives and its employees (and up to society, which will control them): This is no small responsibility. That is why many companies prefer compliance over ethics, as it causes fewer headaches. Can I cook the books? No, because you will get nailed, says the director of compliance. Ethics asks the question: What does it mean if my company’s accounting is carried out according to criteria of excellence? Ugh! That forces me to think about what information I give to each stakeholder, which evaluation criteria are the most appropriate, and so on. Of course, many would prefer for the law to tell them exactly what to do.

Standards

Those that are the focus of compliance, of course, but others too. There are also moral standards, which are not included in regulations: Don’t be evil, don’t try to do good using evil means, i.e., the end does not justify the means (if you don’t believe it, analyze the consequences of disregarding this standard)… Ethics does not excuse anyone from compliance with standards, whether internal or external, however it adds other standards (not “mandatory” under penalties of fines or imprisonment, but necessary, even essential, to be a good company or a good executive), and clarifies the legal standards, because these are sometimes unjust and clearly harmful—not for the economic interests of the company, but for its human quality. And this, of course, brings on new headaches, which is why many prefer pure compliance to ethics.

Virtues

Virtues are something that compliance is incapable of seeing, not by a long shot. Virtues are the key to learning experiences and, therefore, the transformation. Should I hide some income from the tax authorities? Compliance says: No, because the weight of the law will fall on you. Ethics says: No, because you’re learning to do something evil, and the next time it will be worse… and if you keep going with it, this will not work. A system based solely on compliance with standards only has one correction mechanism: Awards and punishments, both external (fines, imprisonment, lawsuits, etc.) and internal (instant terminations, frozen wages, retaliation by the director of human resources, etc.). Ethics has the same mechanism, but also adds another: Try again, because you have to be a good professional, an excellent person; because you cannot separate your private life from your professional life, etc.

The moral of the story: Companies must surrender to compliance. But they can’t stop there. They need to add ethics. Not just add it—they have to work with both at the same time. Of course it is not easy, but who ever said running a business was easy?

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Economic Intelligence

They are able to foresee new opportunities associated with a social problem, such as finding work for disadvantaged people, empowering people in need, fighting systemic poverty and organized crime, and to create new, financially sustainable businesses.

Socially Motivated

Their main objective, and motivational driver, is addressing social issues through market-based solutions. People and their fundamental needs are at center stage, while money and profits are just a means to achieving what really matters: improving people’s lives.

Courage

Social entrepreneurship means dealing with complex, turbulent and uncertain environments. Social entrepreneurscan make very difficult decisions to overcome apparently insurmountable problems. They are often alone fighting against a whole system, and courage is absolutely indispensable.

Quick and Alternative

They see and think about things in a different way: reality is multi-dimensional, business is more than “just profit,” perennial social problems can be business opportunities, people can be much better off than is generally thought. What matters is how you (want to) look at things.

Are you a potential Social Entrepreneur? Don’t miss the opportunity to explore our Social Platform, it will facilitate the contact between members of IESE community and the support you need in your social project.

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