By Michael A. Genovese
Reposted from WorldPolicy.org
The borderless corporation in a globalized world is finally coming to grips with one of the ubiquitous disruptive forces of our age: the demands of the changing workforce demographic. Three emergent groups–consumers, millennials, and women–are driving these changes as today’s corporations, in an effort to both attract and subsequently retain their best workers, are shifting from a model driven purely by profit to one that combines profit and purpose.
Today, modern corporations are finding that they must also provide elements of social welfare, environmental sensitivity and sustainability, and political appropriateness if they are to satisfy their changing workforce–and satisfy they must, as there will increasingly be fiercer competition for the best and brightest workers, who see themselves as highly mobile and can therefore afford to be more selective in their life and work choices.
Consumers increasingly demand that the goods and services they buy do more than satisfy narrow product requirements. Not only do they want to purchase a good product at a good price, but they also want to feel good about themselves and their purchases. With all the negative publicity drawn by the scandals of Enron, Arthur Andersen, and the like, consumers want to believe that they are doing business with caring corporations that share their values, respect their workforces, provide quality for their dollars, and serve their broader communities. If they fail to do so, the power of public shaming–of consumer boycotts, shareholder revolts, and media exposes–has the capacity to destroy or significantly damage even the strongest of companies. And what corporation would knowingly take that risk? Today, as the existence of groups like “Conscious Capitalism” suggests, doing good and being good are two sides of the same corporate coin.
The new drivers of the global workforce, millennials and women, likewise expect and demand more of employees than merely a paycheck. They crave meaning and purpose, and if one corporation can’t supply that, another will. And this second corporation may be located in Brussels or Beijing, Amsterdam or Atlanta, Dakar or Dubai. The competition for top employees will result in some companies being branded as magnet corporations, while others will be seen as socially toxic. In a recent Korn Ferry survey, 38 percent of millennials and 31 percent of Generation Xers claimed that the mission and vision of an organization was of first or second priority to them in choosing a job. It follows that those magnet corporations with strong value systems should have a great advantage in attracting and retaining top employees.
Likewise, shareholders are increasingly demanding that corporations do good alongside doing well. Shareholder value may still be the highest goal of investors, but more and more of them, like consumers, want to feel good about their investments. The divestment movement against apartheid-era South Africa is no longer an isolated case of history; instead, it is the new reality that corporations face.
Critics argue that these pressures are moving us toward not only the “nanny state,” but also the “nanny corporation.” But the added power of consumers and shareholders, plus the growing leverage of tomorrow’s human capital, means that corporations must find a way to make peace with their demands while also keeping an eye on the bottom line.
Added to consumers, millennials, and stockholders is the growing number of women entering the workforce from new positions of strength. Today in the United States, more women attend and graduate from college than men; more also enter law school, medical school, and most professional schools. In 25 years, these women will dominate the C-Suites and top management. The revolution is on our doorstep.
While the first response to these changes might be reactionary, the proactive corporation will have a decided advantage in this evolving environment. Gone are the days when “reducing harm” was a sufficient goal. Today, corporations must actively seek to do, as well as be, good. The first step in this process is to build social justice elements into their mission statements. Next, a strategy must be devised to actually bring to life their well-intentioned goals. The reward and incentive systems within corporations must also reflect these values. Programs that encourage employees to participate in the workings of their communities, make time for pro bono community projects, and highlight service are key. The message that this is a high priority of the corporation must be clearly sent from the top of the chain of command. What those in the C-suite say and do matters. Management officials in top positions must not only talk the talk, but also walk the walk.
Socially responsive and responsible corporations have stronger, more positive cultures, can easily maintain a sense of purpose, generate buy-in from top employees, tend to be more creative and productive, amass greater consumer loyalty and brand enhancement over time, retain their best people, and–oh yes–are more profitable. In the long run, profit and purpose are a win-win combination.
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Michael A. Genovese is the president of the World Policy Institute at Loyola Marymount University and is the author of over 40 books, most recently (with Todd L. Belt) The Post-Heroic Presidency: Leveraged Leadership in an Age of Limits.