Gordon Gekko might be back in cinemas in Wall Street II, but he seems to be less visible in today's boardrooms. As economic crises, erupting volcanoes and crippling earthquakes plague the planet, social consciousness is in, greed is ... well, not out, but certainly down.
Gordon Gekko might be back in cinemas in Wall Street II, but he seems to be less visible in today’s boardrooms. As economic crises, erupting volcanoes and crippling earthquakes plague the planet, social consciousness is in, greed is…well, not out, but certainly down.
Take the case of Tropical Telecom, a telecommunications holding company whose subsidiaries provide internet VoIP services in the Caribbean and the United States. The company’s Haitian subsidiary, Access Haiti, is the country’s leading provider of ISP and VoIP. So, when a major earthquake hit the country on January 21, Tropical Telecom instantly became an integral part of relief efforts.
Chris Taylor (MBA '00D), its President and CEO, was actually in Port-au-Prince when disaster struck minutes before the end of the business day. His response was immediate and comprehensive. “We reacted by opening up our network, making it free for use of everyone. We set up wi-fi points around the city for the first-aid organisations, for the UN, for the US government.” Taylor said this move was essential in getting the aid effort going, because phone lines were down, and the only way to communicate with the outside world was through the internet.
Tropical Telecom was lucky. They didn’t lose a single one of their more than 200 in-country employees, and all four of their buildings in the country were still standing post-disaster.
In addition to its free internet service, the company opened up its facilities to the international press. “There were no hotels and we had power and water and internet, and that’s what they needed to do their jobs,” said Taylor.
For the two months following the earthquake, revenues were down by more than 50 per cent. Now, four months later, while network capacity is back up, revenues are still lagging. However, Taylor figures that the company should come out even, partly due to the helping hand of other international companies. “They saw our efforts and they came and helped us by both reducing our international fees for international bandwidth or helping us to replace some of the equipment that got destroyed,” Taylor said.
INSEAD’s Social Innovation Centre studies humanitarian logistics and is monitoring the Haitian disaster. Taylor credits the school with helping prepare him for the Haitian tragedy. “What to do in the face of adversity certainly were lessons I took from business school, from INSEAD, and was able to apply. It’s just that everything happens in a split second instead of happening over weeks or months or years and it typically would in a more developed situation.”
In this type of situation, Taylor admitted that helping competitors is not always a purely altruistic decision. Without the economy moving, he said, there would simply be no business for anyone. Even if the decision hurt Tropical Telecom from a business standpoint, it advanced the relief efforts and allowed business to ultimately resume. As for his competitors, Taylor says, “they had their thousands of customers, and they were able to get those customers communicating with the world, and that helped bring the response and helped get the world’s attention focused much faster.”
Adam Goldstein (MBA '88J), President and CEO of Royal Caribbean International, wasn’t in Haiti when the earthquake hit, but one of his cruise ships was. Royal Caribbean, Haiti’s number two direct foreign investor, immediately became part of the relief efforts.
“We had the great fortune to be able to use our ships to bring supplies,” said Goldstein, “which is not an opportunity that all companies have, of course.”
“It’s no longer a luxury to be altruistic; it’s woven into the fabric of business in today’s socio-economic environment,” said Goldstein, indicating that his company’s response fits with the company’s vision of social responsibility. He says investors now see social and corporate responsibility as a necessary component in business decisions.
“I don’t think -- I know -- that our customers, our distributors, our employees expect our company to behave as a leader,” says Goldstein. “They expect Royal Caribbean to show the way, whether it’s community involvement, environmental stewardship, guest satisfaction, or financial performance. You don’t get to choose off the menu. You must do all these things well.”
Four months on, Royal Caribbean remains committed to helping rebuild the country. While that is part of the company’s vision of social responsibility, Goldstein points out that by helping to rebuild Haiti, Royal Caribbean is in fact potentially helping its own business.
“We’re very committed to building schools in the north coast, and we’re very committed to working with the Haitian government to make the Citadel be the tourist attraction that it should be,” he says. “It’s the largest fortification in the whole of the Americas from Chile to the Artic and nobody goes there to visit it. And one of our commitments at Royal Caribbean is to help that come alive.”
But in times of crisis, more often than not, the rewards of corporate benevolence go well beyond business results and the bottom line, especially when a decision helps save lives. “(We) really helped keep the country connected,” said Taylor of Tropical Telecom. “So we really felt a strong sense of purpose.”