“If a company is driven by short term profit, it’s doomed”

When Jean-Marc Borello created Groupe SOS thirty-five years ago its goal was to come to the aid of those people ‘nobody wanted.’ Today, his business, built around the fight against exclusion, employs 17,000 and has a turnover of 850 million euros. Proof that social engagement and economic performance need not be mutually exclusive. For the author of 'Why We Need Common Good Capitalism,' these ideas are today inseparable.

When Jean-Marc Borello created Groupe SOS thirty-five years ago its goal was to come to the aid of those people ‘nobody wanted.’ Today, his business, built around the fight against exclusion, employs 17,000 and has a turnover of 850 million euros. Proof that social engagement and economic performance need not be mutually exclusive. For the author of 'Why We Need Common Good Capitalism,' these ideas are today inseparable.


 

Leaders League. When you created Groupe SOS thirty-five years ago, no-one was talking about social economies. What ambition did you have for the firm?

 

Jean-Marc Borello. At the time I was working as a consultant for an interdepartmental French government mission battling drugs and drug addiction. We used to hold very long meetings debating the problem, without any concrete measures being produced. I said to myself one day that time worked differently in this organization than it did in the real world, and so I left to create SOS Drogues International, a clinic for drug addicts. When HIV arrived, we created a care-center and then started to deal with key issues facing drug addicts, such as shelter and reintegration – while still looking to provide solutions for all people facing social exclusion. So the group developed without any particular strategy according to needs identified over time.     

 

For a company whose activity is based on solidarity, SOS Groupe’s turnover of €850 million is impressive. Can capitalism be profitable and conscious at the same time?

 

We are the proof that it can. Our business model is built upon the idea that, in order to fight different types of exclusion, we cannot rely on government policies. To ensure what we are doing makes a real impact, we decided to make our services (hospitals, day-care, retirement homes, training etc.) available to all, while paying special attention to the socially excluded. These days we are a traditional company, with competitors, and so are obliged to innovate and make a profit. We are not living in La La Land! Simply put, we have no shareholders, so don’t have to pay out dividends, so what we make we can dedicate to providing services free of charge for those who need it.

 

Do you have the impression that this moralistic version of capitalism is gaining traction at C-level?

 

The non-profit sector has certainly seen strong growth, more and more founders of startups invest their time and money because a project carries meaning, their raison d'être is clearly set out, and because many have understood that the company, whatever it’s area of activity must grow to include socially responsible practices. Those that refuse to do so risk being rebuked by their clients – with them potentially calling for boycotts – but also by their own staff, more and more of whom place a high value on a job with real meaning, and increasingly investors are making decisions to invest based on the good a company does and not just the profit it has the potential to make.

 

Do you see this shift as a growth lever for firms?

 

It is undoubtedly a growth lever for firms – If a company is driven by short term profit, it’s doomed in the long term – but also an opportunity for firms to improve their standing with general public by showing them that they are not only concerned with filling their coffers and the coffers their shareholders. Companies must think long and hard about their purpose, the meaning of what they do and the impact their activity has. It’s become an imperative and that is increasingly understood by directors.

 

What role should government have?

 

It should be indicative. In addition, the recourse to naming and shaming is a good tool to get companies to act, since it has a direct impact on their reputation.         

 

Interview by Caroline Castets

(Translation: Simon McGeady)

Read the full Special Report: Conscious Capitalism

What is the role of a company? Two schools of thought, two rival philosophies, have vied for supremacy for over twenty years now. Is it to put the interests of shareholders above all else, as Nobel prize-winning economist Milton Freedman declared? Or is it, in addition to the shareholders, to serve other stakeholders such as staff, clients, suppliers and beyond?
Summary Nicolas Notat (President of Vigeo-Riris): “Staff and shareholders are two constituent parts of value creation” Jean-Luc Petithuguenin (Founder, Paprec): “Profit is the oxygen of a company, but it's only a means and not an end” “Nurturing well-being in the workplace and provoking the curiosity of the individual is vital to economic performance” Philippe Joannis (Founder, 5fois5): “Purpose before profit: this inversion of priorities is the key to conscious capitalism” “A reasonable level of profit is important to guarantee the continuous distribution of capital” Serge Papin (CEO, Système U): “The director must turn his company into a place of reconciliation for the different stakeholders” “It’s impossible to be profitable in the long-term while ‘massacring’ stakeholders” Stanislas Guerini (French parliamentarian): “Reimagine businesses by removing the twin barriers which oppose capital and work” Making Capitalism More Moral

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