The role of business in society and the impact it has is under heightened scrutiny. The undiluted shareholder capitalism model, which has dominated Western society for so long, is being challenged more forcefully than at any time since 1945. A need for a more sustainable, balanced and fair role for the business community means that more business leaders are advocating for a stakeholder-led form of capitalism.
A big part of this is the consideration of social impact in business. This is a broad and far-reaching area that covers:
- how an organisation treats and develops its own people (corporate wellbeing);
- what its approach towards fair societal financial contribution is (i.e. its attitude to tax); and
- what active effort is being made towards giving something back to the communities the organisation operates within.
The direction set by leadership is undoubtedly of paramount importance here. The tone at the top will drive the critical policies and actions by which an organisation will be judged.
Individuals expect their employers to provide them with a positive work environment where they can flourish and give their best. This means a place where their skills will be invested in and where their employer will provide support when needed and, above all, a place where everyone will be treated fairly.
Beyond this, there is an expectation that organisations will operate with a conscience and make a meaningful contribution to society by actively providing time, money and resources to those in need.
As the battle to secure talent rages, falling short of the expectations of potential hires – or indeed of current employees – can have painful consequences. Candidates are increasingly assessing potential employers on their performance on social issues. If an organisation fails to develop a coherent and authentic strategy on social matters, it can not only lose the battle for talent but the battle for market share as well.
- Diversity and inclusion
- Skills and Innovation
There has been a seismic attitudinal shift corporate wellbeing over the last couple of decades.
Organisations have come to realise that supporting the mental and physical health of their people is important for maintaining productivity and performance. Mental health, in particular, is no longer the taboo subject that it was for so long. An acceptance that some colleagues will be facing mental health challenges and putting in place structures to help has been a big leap forward in the workplace.
When it comes to work and corporate wellbeing, deciding what constitutes an appropriate work-life balance is fundamental. This debate has been supercharged by the coronavirus and the realisation – for many – that working at home is not only possible but can have both productivity and lifestyle benefits. For many others, however, sustained homeworking actually harmed their mental wellbeing by depriving them of social interaction and the energy that comes from collaborating in person.
Increasingly, attention is also shifting to assisting employees with their financial wellbeing. In recognition that the cost-of-living crisis is affecting people of all income levels, a growing number of organisations now provide ways to access guidance and advice on money matters.
Diversity and inclusion
Diversity and inclusion
Gender, sexuality, age, disability, ethnicity and religion are characteristics protected by law. Even if they weren’t, having proper diversity and inclusion in the workplace is just the right thing to do .
Organisational performance is already scrutinised through mandatory requirements such as gender pay gap reporting. But what about the actual commercial benefits that come from diversity of thought and input? Do we talk enough about those?
Many studies point to the dangers of decision-making groups that contain only individuals from certain backgrounds: leading to the phenomenon of ‘groupthink,’ or what Matthew Syed refers to as, ‘collective blindness’1. Tellingly, Syed describes the homogeneity of the CIA – in terms of race, gender, religion and class – in the years leading up to the 9/11 attacks and how this hampered the agency’s ability to piece together the information before it and act to prevent the tragedy.
The reality is that diversity creates richness of thought and input. Different perspectives and insights enhance the decision-making process and lead to better outcomes. One of the examples of success cited by Syed is the establishment in 2016 of the very diverse Football Association Technical Advisory Board. This body supported coach Gareth Southgate in devising strategies that would reverse the England men’s football team’s mediocre fortunes. Since the strategy was put in place, the team has enjoyed its most successful run in over 50 years.
These examples do not come from the business world, but it’s easy to see how the same principles could apply.
Simply put, diverse teams are more effective teams.
1 Rebel Ideas, The Power of Diverse Thinking, Matthew Syed, John Murray Publishers, 2019
Skills and Innovation
Skills and Innovation
We are repeatedly told that the UK’s productivity trails behind that of its peers, and that this hurts our ability to grow income and generate wealth. So, how do we change things?
Two key levers we can pull to help boost productivity are:
- Developing the skills of the workforce
- Investing in innovation
The government has sought to incentivise this type of investment through initiatives such as the Apprenticeship Levy. Even so, deciding to take a risk on new education strategies often requires foresight and bravery. And bravery is exactly what’s needed as markets and customer requirements continue to evolve at an ever-faster pace.
Alongside investment in people, organisations also need to invest in product, process and/or service innovation to enhance quality, improve efficiency and reduce costs. Embracing new technologies can make a transformational difference to productivity, but to be effective the workforce needs the knowledge and skills to apply it effectively. Employers who fail to provide employee training to develop the skills they need will only harm themselves when their key talent is forced to go elsewhere for career development opportunities.