- Society and investors expect more from the companies they interact with than just financial success.
- Bold leadership is required to break free from traditional mindsets focused solely on bottom line impact.
- The short term might be difficult, but longer term, strong decisions will enable companies to have it all.
Corporate profits are at an all-time high and consumer spending is up. It adds up to a positive picture for companies — and also a crucial opportunity to make a big leap to a focus on something more. It’s time to conquer a full agenda beyond financial impact and bring in a broader impact on society, employees and the community. It’s time for bold leadership.
Some might say it can’t be done at public companies, even when they’re flush, because they’re beholden to shareholders and short-term market value. Call me naive, but I do envision a future where a company can have it all. Shareholders see a rise in value that they’re happy with. The company makes a positive impact on the world. Work is fun again. Employees feel more valued, have the skills they need and do work they believe in.
There’s an appetite for this not just in society, but also for investors. For instance, in January, Larry Fink, founder and CEO of BlackRock, told executives at companies across the globe that they can’t just focus on financial returns, but must contribute to society if they want BlackRock funds to continue investing.1 With over US$6 trillion in managed investments, that’s impactful in itself.
In a letter to global CEOs he wrote, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”2
To get there, though, we need more bold leadership – leaders with the foresight and guts to drive toward a business model that does this. Becoming that kind of executive all but requires going against what is still expected. These five steps to getting there might seem radical, but nothing bold is safe and easy.
1. Refocus from financial impact to
societal good with financial impact
We are in a transitional state where companies are being remade to create bigger impact but to truly be bold, a leader needs to go beyond traditional financial expectations. Not all leaders will have the stick-to-it that is needed to stay the course amid quarterly pressures.
2. Build a bold platform to accomplish
the impact you want to have
Take Tom’s Shoes, whose mission is lived across the company: to help improve lives through business. It’s right there in the core value statement of the organisation — and its founder is known to regularly assess whether Tom’s is meeting its impact goals.3
Or consider Chobani, whose founder and CEO Hamdi Ulukaya has made more than a tasty product with smart marketing. He has built a company that invests in people and focuses on the societal and community impact. Chobani also employs a digital way of working — ideate, test, fail, try again, perfect it — yes, at a yogurt company. Ulukaya has described himself as a driven businessman who wants to win – and an empathetic leader who strives to do the right thing, regardless of what it means for market share. “You have to lead by example,” Ulukaya told Fast Company magazine. “Chobani can inspire a new way of business, a new way of work, a new way of innovation.”4
It’s paid off: in a decade the yogurt maker surpassed the leaders in the category and now holds 21% share of the $3.6 billion market.
3. Invest in innovations, products
and the cultural change you need
At Tom’s, at Chobani, at your company, investing in the direction you want to go is the proof you’re serious. Making cultural change part of the equation helps ensure you’ll be able to get there.
When PwC wanted to put a stake in the ground around being a digitally-fit company, for instance, leadership didn’t just pay lip service. There has been a full, public commitment and sustained effort to reskill our people, from tangible investments in tools and technology to training staff in new ways of working. We’re working everyday to live the values and principles we believe in and help our clients achieve — including a mission to build trust and solve important societal problems.
4. Build an enviable,
If you’re on a mission that’s bigger than profit, you need everyone to be on board. You’ve embarked on a bolder platform, you’re investing where it counts, now it’s time to be clear with employees about their role and how they matter to the company and the larger mission. By doing this, you’ll create employees who care about their work, and truly care for their peers, their community and their customers. They want to be at the company and they feel good about it.
5. Be demanding: Look beyond
This might be the hardest step of all. Leaders need to think beyond the next earnings milestone and focus on what will drive long-term value for not only their shareholders, but their customers. This is perhaps the most important element for bold leadership. Use data and proof points from other companies who have gone before you to help bolster your message. Build a team around you to help drive results and maintain direction.
You might have to work harder to win over activists who aren’t on board — and as you do so, you’ll be buying time to build the credibility you need. That might cost you some money in the short term and you could take some short term losses in the quarter or even in the first year you’re making these moves. To truly make a bold turn, you might even need to consider changing the way you capitalise the company. But above all, remain committed and forge ahead with conviction as you continue to build credibility around your ideas and direction. That’s bold leadership.
If you want to see the company you lead make an impact beyond the financial, to build an organisation that has it all, it’s time to be bolder. Are you ready?