The past year has been a challenging one for liberal thinkers: ongoing threats of terrorism, a 52% majority Brexit vote, populism winning power, the imminent retreat of free trade, rising tensions between US, Russia and China, and the collective inaction of global powers in conflict zones like Aleppo. The rampage was summarised brilliantly by a New York librarian in an anti-Trump strike, had historians debate whether this was the worst year in history (clearly not), and had philosophers argue that existential nihilism is again on the rise.
What does this all mean for businesses? In a world that is becoming dizzyingly complex and worryingly multipolar, organisations have the unique opportunity to reinvent their strategic positioning in their corresponding societies from ‘product to purpose‘. This is about nothing less than changing the core of how we view our companies: it embodies a shift from economic purism (e.g. short term shareholder value) to the integration of economic and social value (e.g. more long term value, economic and social value). For corporate leaders, it is about making ‘doing good’ an essential part of the corporate strategy and portfolio decisions. The corporate trend towards ‘creating shared value’ is summarised below:
New companies are famously jumping on the opportunity to build a valuable enterprise, as they generally breath a sense of purpose and mission from their founders. Existing companies – especially firms with external shareholders – have a harder time dealing with the trend, but adapting is far from impossible. A great example is set by Hubert Sagnières, CEO of Essilor (a leading eyewear company with a mission to help everyone see better, which aims to deliver 50 million glasses to poor people worldwide). Also, more traditional firms like Nestlé, EY, PwC, Unilever, and Nike have adopted admirable steps in a similar direction (very short summary below):
Where to go from here? 2017 is the year of opportunity for purpose-driven CEOs. Installing a sense of purpose in organisations effectively will strengthen strategic clarity, increase employee engagement, spur innovation and likely attract new customers and future talent. CEOs should learn from founders how to install such a sense of purpose, and identify clear gaps (e.g. through our free dashboard) where the organisation can create both economic and social value. If they succeed in aligning their organisations around such ideas, 2017 may not be a bad year at all.