My earlier post– Does Islamic finance have an economic and societal value–brought about a query on how we can create change, within current organizations in the Islamic finance sector, in undertaking business activities where societal benefits are the primary focus.
The starting point for this is to acknowledge the need for change.
Given the rapid changes that have resulted from financial, economic and natural crises coupled with technology adoption and usage the environment within which a business operates has undergone significant changes. Using business tools that worked in the past will not give better or same results. The regular world of business as one had known is no longer in play.
We have to realise and accept that the Islamic finance sector, like other industries, is being disrupted and without accepting the need to change, it would be next to impossible for businesses to be sustainable. Add to this the necessity of having a very strong understanding of the market or a business’s target group needs, with regards for the community to grow economically, and you have a scenario where approaching profitability through just the lens of increasing short-term dollar value will simply not cut it any more.
This brings us back to the query that came in—How can we create the change to review existing business practices and models in order to put profitability from societal benefits as the purpose of a business.
Here’s my 5-Steps-To-Sustainability Cycle:
What this model does is to help in showing the stakeholders two key views:
- The increase in profitability and sustainability of the business over a longer period of time vis-à-vis higher short-term gains.
- The impact, in terms of economic growth of connected businesses of its partners and vendors along with development t of users who make up the community in which the business operates.
These two views, when projected through the lens of the dollar-value, enable a strong business case to be discussed at the board level. From here it’s the level of strategic understanding and willingness to change, at the leadership level, that impact on the final decision.
Will we see the elephant in the room and address it?