How Justice In Business Multiplies Resources – And Achieves True Sustainability

First published by Nation Builder on 16 August 2020

After a successful corporate career in the IT industry, Patrick Kuwana became a serial entrepreneur – co-founding various specialist media companies, and being involved in numerous business incubators and accelerators in Africa and Asia. He is the Founder and CEO of C3 Capital, a private equity firm that aims to create inclusive wealth and prosperity out of investment opportunities in select industries in Africa.

The need for a new approach to business

The COVID-19 pandemic has again revealed the fragility in the global economy (the cracks have been showing through successive financial crises, especially since 2008). In South Africa too, the impact of lockdown has exposed how short-sighted business systems focused on individual accumulation (rather than inclusive prosperity) have built a weak economy.

But before this sounds like more empty rhetoric about ‘building an inclusive economy’, let me explain. C3 is a private equity firm that was born out of the vision to provide funding to businesses with a strong socio-economic transformation agenda. We invest in ventures where we can bring a particular type of operational blueprint and business expertise, that results in superior financial returns as well as positive socio-economic impact. We subscribe to a worldview of mutual wealth creation, not equal wealth distribution.

The reality is that a nation’s economy cannot grow if resources are forcibly taken from one group and given to another. Likewise, a nation’s economy cannot grow if a large section of the population does not have access to resources and thus cannot participate. We need a new approach to business that does not feed the consumption habits of a few elite – an approach that values and incorporates equality, inclusivity and justice in ways that will drive economic growth rapidly and sustainably.

The role of justice in business

C3 believes that justice is critical for business to be sustainable. Broadly speaking, there are four different types of justice: distributive (determining who gets what), procedural (determining how fairly people are treated), retributive (based on punishment for wrong-doing) and restorative (which tries to restore relationships to ‘rightness’). As a business we are not involved in retributive justice, but we intentionally incorporate distributive and procedural justice into our day-to-day operations by considering every transaction in terms of: “How do we create mutual value and mutual benefit through this transaction, instead of extracting value from someone for the benefit of someone else?”

Whenever a transaction brings in an element of disadvantage to another individual or community, it means that that transaction has caused (or sanctioned) an injustice. And this ultimately becomes unsustainable – eventually the pendulum of injustice will swing so far, that something in the socio-economic system will break. Justice in business is all about how we create mutual value that will enable the pendulum to remain stable – so that everyone can bring their value to the table, and be rightly rewarded for the value they bring.

Shifting from a scarcity mindset to an abundance mindset

As a private equity firm we operate within a financial system that typically approves the extraction of value for personal or shareholders’ benefit at the expense of those on the other side of the transaction. Yet at C3 we believe that while profit is important, people are more valuable than money, and relationships are more valuable than transactions.

Business leaders need to shift from a mindset of scarcity (there isn’t enough for everyone so I have to take what I can get) to a mindset of abundance (there is more than enough for everyone). At first glance this may seem counter-intuitive. But the irony is that the abundance mindset encourages co-creating and the multiplying of resources so that there is no lack, while the scarcity mindset encourages the very competition and scarcity that it fears. We need to start running our businesses and economies based on the fundamental foundation of multiplication rather than division. We need to change the typical business approach from hoarding resources, to harnessing the vast human, natural and financial resources available.

The role of human dignity in business

Restoring human dignity also plays a role in the sustainability of business. It refers to valuing and respecting people for who they are and what they contribute. Our work is not separate from the rest of our lives. Everyone has talents and abilities, and if business leaders can create an environment where people can bring the fullness of who they are to create value through their work, this has a multiplying effect, which unlocks prosperity for themselves and those around them. ‘Work’ is so much bigger than just a career, or just a shareholding. Work enables lives.

Recognising injustices past and present

In South Africa, however, we have done so much damage to one another over many generations – we have to first bring our pendulum back to some kind of equilibrium before we can move forward.

Our pendulum is racially-charged, and we need courage and honesty on both sides. We need to recognise the legitimate hurt of those who were deprived of opportunities to equally participate in the economy through a system of institutionalised racism. We also have to recognise the legitimate fears of those who benefited from the system, but who were not directly involved in it. Apartheid ended 25 years’ ago, but the process of bringing the pendulum back to equilibrium is emotionally-charged on both sides. As business leaders we have to engage in the difficult conversations necessary to make this happen. Not to defend ourselves, or accuse the other, but to step into each other’s shoes and take constructive steps forward.

Justice and an inclusive economy

What South Africa desperately needs, is for people from different backgrounds to get together, and to formulate a common vision for the future – not an individual vision for one group. We need to focus on multiplying rather than dividing our resources. Unfortunately, so much of black economic empowerment has been implemented according to division-based principles (how do we take away over here, to give over there), which has caused many in business to feel: “I have lost while you have gained.”

Again, whenever a transaction brings disadvantage to another individual or community, it means that that transaction has created an injustice. And as I put forward in the article Why robbing Pieter to feed Sizwe will not work, if our financial systems continue to extract value from someone for the benefit of someone else, true socio-economic sustainability will continue to elude us.

The reality is that the more productive the resources in your business are, the more economic value you can create. Our aim as business leaders is to enable our people and all our other assets to be as productive as possible. So if we look at South Africa in the same terms, we need to recognise that our nation should have as many people as possible, as productive as possible. We need to approach equality and inclusivity from a mindset of abundance – a mindset that enables the stereotypical Pieters and Sizwes to collaborate. Not because of any legislative pressure, but by mutual consent and for mutual benefit.

Embracing justice to unlock prosperity

Can we as business leaders recognise the ideas, skills and resources that others have, combine that with the ideas, skills and resources that we have, and start co-creating wealth?

Can we approach our day-to-day operations with the emphasis on creating mutual value for mutual benefit, rather than trying to extract value for ourselves at the expense of others?

Can we create a work environment where every employee can generate economic value by being highly productive, and thereby unlock prosperity for themselves and their community?

In other words, can we embrace justice as an organisational value, and see how fair economic participation and reward in business (distributive and procedural justice) over time naturally leads to reconciliation in relationships (restorative justice) in the wider social landscape?

When our mindset shifts from one of competition (that creates scarcity), to one of co-creation (that releases abundance) we will experience just how powerful justice can be – in multiplying resources and achieving true socio-economic sustainability. When we can all bring what we have, we can build a new future for our children’s children.