“Continuity gives us roots; change gives us branches, letting us stretch and grow and reach new heights.”
- Pauline R. Kezer
Novo Nordisk is a global healthcare company with more than 95 years of innovation and leadership in diabetes care. Its mission - to ‘defeat diabetes’ - centres around a commitment to the long-term production and supply of a low cost insulin to patients in low and middle income countries where ordinarily it can be challenging to access reliable and affordable supplies. This ‘Access to Insulin Commitment’ now covers 78 countries, home to a third of the world’s diabetes population.
At the heart of Novo Nordisk’s business is the conviction that the formula for lasting success is to stay focused, think long-term and to do business in a financially, socially and environmentally responsible way. To hold itself to account against these principles, Novo Nordisk manages its business in accordance with the Triple Bottom Line theory. Anchored into the company’s Articles of Association, the theory is applied to ensure business decisions balance financial, social and environmental considerations, enabling Novo Nordisk always to keep in mind the best interests of the patients it serves. This approach was years ahead of its time and in deciding to do something that would make a real difference and following it through, the organisation has created a hugely successful, sustainable and profitable business.
The inner workings of a Danish pharmaceutical company may feel far removed from the bustle of Cambridge; more specifically Regent Street, home to the Howard Group. However, the Novo Nordisk way of doing business particularly resonates with me.
Most striking is the fact that financial performance is not ultimately what defines the business; rather it is responsibility - financial, social and environmental – which implies a strong sense of stewardship alongside ownership.
As a family-owned company, stewardship and responsible ownership is something we talk about a lot. What does being a responsible owner mean in terms of our behaviours, our relationships and our outlook as a family? These considerations run deep, to the point at which they influence the way in which we bring up our children, the next generation, to appreciate that they have a responsibility and an obligation, not a birth right. The way we talk about what we do is very much about stewardship rather than entitlement; looking outwards and thinking about the responsibilities we have been entrusted with and considering how best we can take those forward. We are trustees of the Howard Group business, not owners with an entitlement.
Colin Mayer, the Peter Moores Professor of Management Studies at the Saïd Business School at the University of Oxford and author of “Prosperity: Better Business makes the Greater Good” uses a very interesting quote: “The purpose of business is not to produce profit; the purpose of business is to produce profitable solutions to the problems of people and planet and in the process it produces profit.”
During the course of this year, we have spent time considering this very point; if profit isn’t the sole aim and isn’t the purpose of the business, what is? How do we define our purpose as a long-term, family-owned, steward of a business? How can we make a difference and in doing so enrich the lives of people around us rather than the focus being to deliver ever increasing returns to shareholders? Running in parallel we have also been exploring how we instil this in the next generation to ensure that this remains deeply embedded within the family business ethos.
Passing on the business “in better shape”
There’s a well recognised mantra within family businesses, which is that “each generation tries to pass on the business in a better shape to previous generations”. Unsurprisingly that is certainly what we, the third generation of the Howard Group family, aim to do. However, for us, “in better shape” doesn’t necessarily mean more profitable, or doubled in size; it means having a profound sense of purpose and a real understanding of how we can use what we do to better society and make a real difference to the communities around us.
So, in reality, what does this look like?
The Howard Group has enabled us to do a lot of things, outside our more ‘visible’ remit as property developers and investors. For example, we are currently working on a programme around homelessness, within which we are working together amongst the property community to highlight the issue and take positive steps to improve the lives of those young people experiencing homelessness in our community. We don’t pursue such initiatives in order to measure their impact so that we can communicate it - if we did, I would question whether we were doing it for the right reasons. The reality for us is that a number of the initiatives and projects the Howard Group is involved in are just because they are inherently the right things to do. That said, I personally also recognise the benefit in getting the balance right and that by sharing the outworking of some of these projects we can encourage others to become involved or perhaps think a little differently about how they might also have a positive, and importantly long-term social, environmental and financial impact.
The bringing together of others to work collaboratively for positive change is, I believe, also part of our role as stewards of our business. We have a responsibility to take a leadership role, using some of our inherent strengths to encourage others to join us, enabling us collectively to make a bigger difference. We are in the privileged position of being able to bring people together to effect change as well as encourage and create a space for collaboration. We do this in various ways, including functions to bring clients, staff, partners and stakeholders together, as well as via our involvement in the family business arena and more recently the homelessness piece mentioned above. It’s very rewarding to help initiate conversations and connections, which otherwise might not have been made and to be part, in a small way, of the resulting relationship.
Looking to the future
As we look towards the fourth generation, we are trying to establish an environment where we hold things quite lightly in terms of expectations, believing that it is incredibly important for each generation to have a chance to reflect, review and consider where they feel the business needs to go, without restriction or influence from the current stewards. In the past the focus has been solely on the Howard Group, but in reality the Howard Group, encompassing Howard Property and Howard Capital, is part of a much larger framework of assets and activities. Rather than thinking about that piece in isolation we want the next generation to be free to think about the whole and to evaluate their response as stewards of everything we do, be that commercial, charitable or philanthropic.
I’m personally very invested in the thought that the Howard Group can and should evolve through the generations. The Group will not necessarily be in its current shape, doing what it currently does for the next 100 years. Looking back, as we approach our first century, the Howard Group has been through a whole range of diverse businesses and varied industries, with today’s organisation looking very different from the business created by our founder, CAEC Howard, in 1935.
I imagine that 100 years from now we will look very different again. Our role in handing on to the next generation is to enable them to have an opportunity for reinvention, to discover where their passions lie and where they feel they can make a real difference. As the current stewards of the Howard Group, it is our responsibility to ensure the next generation has the knowledge, support and guidance they need to make those decisions with confidence.