Looking Forward: The big business strategy trends of the next decade will be driven by purpose over profit
Looking Forward is a series of articles on the top trends in technology, strategy, and culture that will influence small businesses in 2019 and beyond.
If there is one major underlying theme that is going to drive business trends over the next decade, it is the idea that purpose should come before profit. In 2018, Larry Fink of investment firm BlackRock penned a controversial letter asking companies to “serve a social purpose.” Fink doubled down on his call to action for 2019, saying that years of frustration over stagnant wages and uncertainty about the future was driving social unrest around the world, and that society, disappointed in governmental institutions’ failure to provide solutions, would increasingly look to the business world to address social and economic issues.
Some businesses will fight tooth and nail against the idea of putting purpose before profit, calling the notion “corporate socialism.” This is shortsighted and to their detriment. Companies do not exist in a vacuum. They require a healthy and diverse workforce, sustainable access to resources, socially responsible suppliers, customers who can afford to buy their products, and a corruption-free government to thrive.
Businesses that embrace the idea of purpose and profit being “inextricably linked” are those that will drive the innovations of the future and see long-term profitability. How will that play out over the next decade? Here are some of the big strategic trends that forward-thinking businesses are looking at for 2019 and beyond.
The changing role of HR
For decades, the HR department has played a relatively passive role within businesses, handling the functions of hiring, training, compliance, performance reviews and the like. Now that we have moved to the post-Digital Revolution age (considered “Industry 4.0”), businesses require lots of talented human capital, and companies have seen a need to evolve the HR function to a much more strategic position, giving rise to such positions as “Chief People Officer” or “Chief Happiness Officer.”
More importantly, the best HR teams are empowering employees through professional development and learning, not just for technical skills but also for soft skills like communication and negotiation. This will be increasingly important as work becomes more automated and “uniquely human skills” become more valuable in the job market.
The challenge that many companies face is figuring out how to scale this training and development during a fast-growth stage. Some businesses have decided to decentralize the HR function, embedding traditional roles and responsibilities of HR within teams and empowering them to take ownership of employee development. At Square, for example, HR worked with key company executives to build and teach manager training modules, transferring the accountability to them to ensure that new managers were trained as quickly as possible, while also investing the right amount of time and commitment to the process.
From corporate activism to employee activism
Corporate activism has been on the rise in the last decade, fueled by polarizing issues such as gun violence, LGBTQ rights, climate change, and more. In today’s social media age, companies that stay silent sometimes do so to their detriment.
Now, that very same high-visibility activism is not just being fueled by CEOs, but also by front-line employees, who have been emboldened by the political and economic climate to speak up for their values. Nowhere has that been more strongly felt than at Google, which has experienced a number of employee protests in the last year. In November 2018, 20,000 employees staged a walkout to protest how the company handles sexual misconduct claims. Earlier that year, 4,000 employees, including top-level engineers, protested the company’s involvement in Project Maven, a Pentagon program to use artificial intelligence on the battlefield, saying, “We believe that Google should not be in the business of war.” Two months later, Google announced that it would not renew its military contract for 2019.
As the boundaries between work and life increasingly blur, employees have made it clear that they want more from their employers than just a paycheck. Nearly 9 out of 10 millennials would consider taking a pay cut to work at a company whose mission and values align with their own.
The companies that will lead the way in the future are those that do not attempt to suppress employee voices, but rather those that facilitate dialogue and remain committed to their values. Salesforce, for example, recently hired its first Chief Ethical and Humane Use Officer in answer to the protests against the company for keeping its contract with the U.S. Customs and Border Patrol. As CEO Marc Benioff said regarding the new department, “...every company’s going to need to be able to have a structured conversation around humane use.”
Ethically sourced data
Amid a flurry of data privacy scandals over the past few years, from the Equifax data breach to Facebook’s Cambridge Analytica scandal, consumer trust in the ability of companies to protect personal information has eroded to a historic low. But despite growing consumer mistrust in data collection, the appetite for big data continues to grow, driven largely in part by new technologies that feed off it (e.g. the Internet of Things) as well as hungry marketers or campaigners looking to quickly target and influence very specific groups of people.
The dissonance between the two has given rise to a new concept: “ethically sourced data,” a movement that asks companies to maintain the highest ethical standards in the collection and use of personal data. In essence, companies must collect data with full consent from the consumer, allow the consumer to review or modify it, and keep it only as long as necessary. In using the data, companies must not use it for purposes that are morally objectionable—for example, in selling predatory loans to financially risky individuals or in inciting hate campaigns against ethnic groups.
Governments have begun to step in to help regulate this new battleground, but the results have often created more chaos than order. Last year’s implementation of the General Data Protection Regulations of the EU in May 2018 had many businesses scrambling to revisit their privacy policies and throw up new cookie notifications on their website, but confusion on how to interpret and implement GDPR has left many companies adopting a risky “wait and see” approach to compliance. But despite doubts that GDPR will ultimately provide better data protection to consumers, one thing is certain: its emphasis on consumer consent (the “opt-in” principle) has begun to flip the economics of the industry, incentivizing companies to build consumer trust instead of having blanket access to data.
Ultimately, the onus will be on companies to make data protection a part of their core values, instilling the principles of privacy throughout the organization, from the way IT collects and stores data, to how marketing and sales uses data for outreach, to the way HR and operations manages employee data.
From work-life balance to work-life integration
Burnout is real, and it’s already become one of the major defining issues of this generation. And despite 40 years of talk about finding work-life balance, it seems that most of us haven’t exactly found where that equilibrium sits.
Luckily, the conversation is starting to change. Tracy Brower, sociologist and author of “Bring Work to Life by Bringing Life to Work,” says we need to throw out the concept of work-life balance all together. “Work-life balance artificially separates work and life,” says Brower, who emphasizes that “balance” is a limiting concept that operates in an “either/or” mentality. Instead, we must accept that “we can have it all, but not all at once.”
The better concept is work-life integration, which is an approach that acknowledges that life comprises work (along with home/family, community, and health/well-being), and that the goal isn’t trying to achieve an equilibrium, but rather to find fulfillment in all areas of life.
Brower asserts the importance of companies offering better work-life supports to help employees navigate the demands of work and life. It’s more than just health insurance and free office snacks—these are formal benefits, policies and practices that help employees achieve a sense of fulfillment, and they should be in line with the values and culture of the company. For example, if the company values self-improvement, then supports could include subsidized tuition or class reimbursements. Or if the company values innovation, then supports could include daily time for extracurricular creative projects.
The most important thing is that company leaders set an example. If managers and executives don’t promote your organization’s work-life supports, the employees won’t take advantage of them. Leaders must live their values in order for the rest of the team to follow suit.