Corporate responsibility is shifting away from pleasing shareholders to enhancing the skills of stakeholders. The signs have been there since the beginning. McKinsey & Company’s report found that the majority believe the system is failing and that current leaders lack credibility. People are more afraid of job loss than ever. According to the report, 59% fear losing their job due to lack of training and skills. This is more than the fear of job losses due to automation (55%), or trade policies and tariffs harming the company (57%). It shouldn’t surprise that people are concerned about their own health. What can a company do now to help?
“>
Corporate Responsibility in the 2010s
You must first look back at the history of how we got to where we are today in order to develop a successful business strategy for 2020. This graphic is from a Merrill Lynch Thematic Investing Report (Nov 2019). We see paradigm shifts as we move into the next decade. In the next 10 years, we will see more change than in the past 100 years.
As you can see many of the paradigms that were popularized in the 2010s have proven to be successful, for better and worse. These are some strategies that we used to maximize our business’ profits.
Globalization
In the 2010s, the free movement of capital, goods and labor around the globe was a huge success. Fortune praised these businesses as being more “global” than ever at the height of the decade. We are now witnessing waves of rejections of globalization all over the globe. According to the Merrill Lynch Report, we have reached peak globalization.
More than ever, localization is a key factor in our businesses, our economies and our Google searches. The data shows that people are not afraid of losing their jobs due to governmental policies that they don’t have control over. They are concerned because they believe their leaders don’t believe they are qualified for the job. People are saying, “Take care of me!” as these sentiments are becoming more common.
Humans
As artificial intelligence takes over, the human power that was essential to certain tasks in 2010s will no longer be required. Robotic Process Automation is already available in government spaces through the DOD’s Joint AI Center. But I didn’t want to link ad nauseam all the reports about AI taking jobs, so I began to think about the 2020s solution in this new paradigm.
Amazon, a world leader in robotic process automation, has committed to upskilling 100,000 U.S. workers for in-demand jobs by 2025. Industry Week reported that Tesla’s Elon Musk admitted that the delays in manufacturing were partly due to a heavy reliance upon robotic automation. He said that Tesla’s excessive automation was a mistake. “Humans are underrated. This complex network of conveyor belts was our nightmare. It wasn’t working.
It will not be robots and human beings in the 2020s, but successful businesses will find ways to have both robots as well as humans. Capgemini’s report shows that upskilling workers can save $1.2 billion over three years. While robots and automation pose a threat to certain jobs, many companies are beginning to recognize the social responsibility of taking care of their workers.
Shareholders
The 1980s were the era when companies’ low stock prices made them vulnerable to takeovers. The new focus of directors and executives on profits and share prices was what followed. The rise in short-term trading and quarterly investment returns as well as quarterly earnings saw the corporate responsibility of the company shift towards pleasing shareholders.
A group of 200 chief executives from around 200 companies discussed how shareholder value is not everything. The paradigm shifts towards stakeholders.
My Top 2 Executive Lessons From 2010
Upskilling Stakeholders
Who are the stakeholders?
Your company’s stakeholders are society. Leaders must incorporate the concerns of society into their business strategy. Leaders and employers, you must consider the long-term consequences of your decisions. If you believe that customers drive value, you might consider rethinking your purpose and societal impact. Employees are what make or break the customer experience.
“Society demands that all companies, public and private, serve a common purpose.” Every company must not only show financial performance but also demonstrate how it contributes to society in order to prosper over time. January 2018, Larry Fink, CEO BlackRock
Your company’s talent pool is sourced from society. This talent pool will have an impact on your business and your customers.
How can you make stakeholders happy?
In the 2010s, companies did an amazing job of returning shareholders’ money. The ones that provide returns to stakeholders will win. Upskilling is key to satisfying your stakeholders and ultimately your business’ success.
What percentage of your budget goes to training? Training your employees is more than just training customers. Have you ever asked your employees if they feel at risk because of a lack of skills? How many of your employees fall within this category? How many of your coworkers are in this same bucket?
Bill Blase, Senior Vice President of Human Resources, AT&T, stated back in March 2018 that “it’s important companies, at the top level, engage and retrain employees rather than constantly going on the streets to hire.”
Why can’t every company let employees take any class they want within a budget? Why should it be job-related? This is not the 1900s. It’s not common for people to do the same job over and over again. You could hire someone who is extremely passionate about your next strategic need.