5 Trends to Watch in Social Purpose Leadership in 2017
2016 will certainly go down in history for the tectonic shifts seen in the political landscape in the United States, Britain, and throughout the world. With the rise of populism in politics, it is reasonable to question whether the trend of the socially engaged business is coming to an end just as it was picking up momentum.
Based on current evidence, the notion of companies “doing good and doing well” is not slowing down in the short-term. To the contrary, this is poised to pick up speed in 2017. There are three reasons for this:
- CEOs now understand corporate responsibility at a fundamental level: According to PwC’s 19th Annual Global CEO Survey of 1,400 CEOs, nearly two-thirds say corporate responsibility is now core to everything their company does. 70% say this will be true of their company in five years’ time. CEOs have gotten the message that doing well and doing good are not only not mutually exclusive—they are inexorably linked.
- Employees are demanding it: Employees are increasingly demanding that their employers’ values actively mirror their own. According to the 2016 Cone Communications Millennial Engagement Study, three-quarters of millennials say they would take a pay cut to work for a socially responsible company—one of many similar reports on employee engagement.
- Consumers want it: Today’s consumers—more aware of a company’s social footprint than any time in history—are demanding ethical behavior and transparency with their wallets and purchasing decisions.
Stakeholders on all sides of the equation value “doing good and doing well”. While this is an excellent ideal, how will the companies that hold to this transform the daily ins and outs of their operations to make this concept a reality?
Talent. Skilled employees—hiring them and, more importantly, keeping them—will drive how business operates. The expectations of a growing millennial workforce mean that companies will need to address these expectations both internally through their leadership and talent programs and more broadly to attract and retain both top talent and consumer loyalty. My organization, PYXERA Global, works with companies ranging in size from under 1000 employees to some of the world’s largest multinationals and Fortune 100s. We facilitate global pro bono programs, short-term action learning assignments with a social-mission organization that transforms and engages employees. Here are five trends in “social purpose leadership” to keep an eye out for in 2017:
1. The war for talent will increase—quickly. Jobs was a key message of the last year’s election. Paradoxically, a full 72% of CEOs interviewed by PwC’s Global CEO Survey report that the availability of key skills is among the top five threats to their business.
Technology is altering the skills that organizations in the private, public, and social sectors need at a breathtaking speed. The war to attract and retain individuals with the right skills will only increase. This constant need for evolving technical skills means that companies will need to be more creative in how they develop and engage their talent. This means integrating learning into the everyday to keep talent fresh and providing experiential learning.
Companies like The Dow Chemical Company have already started down this path, adapting traditional talent development programming to address the needs of Dow’s business. Their Leadership in Action program combines life experiences with direct, hands-on learning. Each year, Dow assigns about forty of its high potential employees to virtual consulting assignments, where they use their skills to support social mission organizations in emerging markets critical for the company. As part of the experience, the cohort travels to the geography—last year Cebu City in the Philippines—to work directly with their clients for one week. Having the chance to experience an emerging market, such as the Philippines, Ghana, or Ethiopia first hand, while supporting a socially-minded organization in reaching its mission creates deeper and more well-rounded learnings than could ever be found in a classroom.
2. Social purpose initiatives are no longer an accessory—they are now front and center. The changing expectations of talent is forcing CEOs to redefine corporate purpose. Increasingly, corporate leaders must pay attention to how a company directly interacts with society—both the local community where it has a large number of employees and more distant markets where it is working to sell products and services. When a company must actively demonstrate social good to its potential and existing employees, while showing profitable returns to shareholders, the traditional methods of check-writing philanthropy fall short.
The good news is that CEOs understand the message.
“Surrounded by uncertainty, many realize that a strong corporate purpose centered around broader societal values can provide the anchor many employees and customers are looking for,” explains PwC spokespeople on findings from the Global CEO Survey. “CEOs are now so conscious of this that 69% of those interviewed say their organization’s purpose is focused on societal value—and nearly a quarter changed their purpose in the last three years to make it so.”
3. The companies that invest in purpose will win the war for talent this year. Nearly two-thirds of millennials say that they would strongly reconsider taking a job with a company that does not have a strong corporate social responsibility strategy. The trend is not confined to millennials. CultureWork, a consultancy that looks at culture in the workplace, says about one-third of working adults are highly motivated by purpose.
Moreover, disengaged employees are expensive. In 2014, disengagement on the job cost the US between $450 and $550 billion in lost productivity. This means that companies must integrate corporate responsibility into their business strategy more than ever before or risk accruing, rather than saving these costs.
4. More corporations will close the skills gap through social purpose initiatives. The war for talent is being further stoked by a growing skills gap both in the United States and abroad. The number of unfilled jobs in America neared 6 million in 2016, while tens of thousands of jobs are lost in manufacturing and mining sectors due to automation and other changes in the economy.
The need to re-skill these workers to meet the demands of the 21st century global economy cannot be underestimated and cannot be filled by government programs alone. A number of companies have recognized this and are launching programs that are specifically focused on workforce development. Companies like JPMorgan Chase and SAP through its Social Sabbatical, for example, have created entire approaches to corporate responsibility designed to support workforce development globally.
Through its JPMorgan Chase Service Corps, for example, the financial services firm sends its employees to work alongside nonprofits that specialize in workforce and youth development in countries such as South Africa, India, England, and here in the US. JPMorgan Chase employees help these non-profit organizations address a need critical to their sustained success through assignments with a focus on the fundamentals: a market analysis, a multiyear strategic plan, or a talent management approach. The firm is supporting these organizations in narrowing the skills divide, while utilizing its talent development and corporate responsibility efforts to feed its own talent pipeline for the future.
JPMorgan Chase’s Service Corps collaborating with nonprofits, Cowen Institute’s EMPLOY Collaborative and Liberty’s Kitchen.
5. Companies will have an opportunity to fill a void left by government. 2016 was marked by large companies making bold statements with significant business investments in areas traditionally reserved for the government and nonprofits where smaller social enterprises tend to play. The year saw a big jump in investments that are not only forward-thinking with regards to long-term corporate profitability, but which also have the potential for a striking impact on social good.
Under the new political administration in the US, there are a host of unanswered questions for American businesses. As government signals a move away from critical social areas in education, healthcare, and climate change, this could give business the opportunity to fill a vacuum. The number of companies that are actively growing their employee volunteer programs and tying them to strategic interests for the business is a good clue that it just might.
Will 2017 be the year when the demand for talent becomes inextricably linked with social purpose? As the larger world seems increasingly complex and out of reach, employees are grasping for ways to “do good and do well”. Those companies that provide this will be well-positioned to succeed.