The Roaring Twenties and Our Contract with Society
Shawn DeVries, Managing Director B2B
A phrase typically used to describe the innovation and change of the 1920s is now being repurposed to describe the potential for growth in the 2020s – hopefully with a watchful eye on what happened in 1929 to avoid repeating history, of course.
Since mid-2018, futurists, technologists, and financial prognosticators have all started to turn their focus to the next decade and what the future holds in terms of opportunity and prosperity. Some of this forward-looking content is focused on hope and reassurance, directed specifically towards those living with the negative effects of wealth inequality and addressing the impacts of social or environmental injustice. But more often than not, the loudest voice in the room is pouring every available fuel source on the fires of wealth generation and unhindered prosperity.
What is different this time around? How do we grow not at the expense of others, but for the benefit of others?
We believe companies must filter their strategic goals through the lens of society at large, restoring public trust and broadening the definition of corporate “purpose” beyond profit. This is a belief that is rooted in the realities of our own changing workplace, the motivations of our employees, and the long-term assurance that we as a global company add value to the world around us in measurable ways.
Three factors must coexist in order for businesses to survive in the 2020s and beyond. These factors also happen to align directly with the Triple Bottom Line (“TBL”) concept that John Elkington founded back in 1994. You can learn more about why TBL matters here.
People come first
Recent studies have stated that millennials will grow to 75% of the workforce by 2025; 77% of current millennials indicated that their company’s purpose was part of the reason they chose to work there.
If you haven’t noticed, there is a limit to what society and regulators can handle in terms of overreach before real action takes place against a corporation or entire industry. In the past fifty years, companies have been regularly called out for their attempts at pushing the limits of trust or, at worst, breaking that trust completely. And in the past 10 years, with the proliferation of connectivity, smartphones, and social media, being called out happens overnight and at a much larger scale. No industry escapes scrutiny as we have seen across industrial manufacturing, pharma companies, global banking, airlines, and most recently, big technology firms.
We trust that our data, private information, and financial details are handled with care and not being used by corporations to manipulate us or others.
Establishing measurable trust requires a new form of “social contract” between the customer/employee and the corporation that serves them. Social contract theory was once reserved for the relationship between authority and society and dates back to the days of Plato. But given the influence corporations have over the public and the amplification of that influence through social media, we are not wrong for drawing the same relationship between society and corporations.
The concept of a “trust contract” between employee and company has a direct impact on updating hiring practices being put into place as we head further into 2020s. Back to the “survival” aspect of our belief statement – if you can’t explain your company’s purpose during the interview process, and that purpose doesn’t have a trust component, you will likely not attract the talent you require to grow. Recent studies have stated that millennials will grow to 75% of the workforce by 2025; 77% of current millennials indicated that their company’s purpose was part of the reason they chose to work there.
This is not a “rose-colored glasses” type of analysis, either. Many people understand the need for businesses to be successful, but people no longer tolerate profits over people. At the very least, companies should re-cast their stated mission as being profits plus people to get started. Doing so sets the long-term foundation for rebuilding this social contract, and sets the tone for customers and employees alike.
Doing good can also be profitable
“Nobody will challenge your spend when you target safety, compliance, or environmental use cases for internet of things (IoT) projects.” – Matt Rachford
Many companies justify their investments in digital innovation by closely aligning with positive revenue generation at a higher profit margin. The easiest revenue-based investments to make are those that reduce friction for finding products or services, purchasing these via some digital channel, and having a strong interaction program in place for ongoing customer interaction. Essentially a series of investments that directly benefit the “demand side” of a business, generating top-line revenue that is data-driven and less costly than traditional revenue-generating methods.
The second most common digital investment companies make is to improve the “supply side” which takes a number of forms. At Kin + Carta, we see growing trends in intelligent logistics and supply-chain management programs that “learn” over time. Companies in heavy logistics or manufacturing industries use digital asset tracking and predictive maintenance for trucks and equipment to ensure minimum downtime and maximum availability. And the most forward-thinking companies invest in a fully integrated supply chain that can automatically propose alternate suppliers based on real-time market conditions: price, currency pairs, weather, geopolitical concerns, and adherence to service level agreements (or lack thereof).
What about the “uncommon” investments that benefit people?
I’m paraphrasing Matt Rachford’s statement at IoT World in Atlanta this past Halloween, who happens to be the Director of Innovation and Environmental Operations at Georgia-Pacific. Matt boldly proclaimed that “nobody will challenge your spend when you target safety, compliance, or environmental use cases for internet of things (IoT) projects.”
This same sentiment was echoed throughout the conference, coalescing around a big theme of using this vast and relatively inexpensive ecosystem of connected technology to improve the quality of life for workers and protect the environment for the communities in which companies operate.
And yet, companies leveraging common off-the-shelf hardened IoT solutions to solve manufacturing safety challenges have historically been far behind the curve. In a study published by LNS Research back in 2017 shared by Kin + Carta client Rockwell Automation: “49% of industrial companies claim safety as a core value, yet only 19% have executive commitment to make necessary investments”.
Steering technology budgets towards the safety of workers provides a better quality of life for employees and in turn, reduces the cost of downtime and improves operational performance. Deploying data-driven success metrics to achieve corporate environmental goals provides a better quality of life for us all. Both of these investments have shown to help reduce risk and improve employee and customer satisfaction for companies globally, benefiting the “host society” in which the investment was made.
“49% of industrial companies claim safety as a core value, yet only 19% have executive commitment to make necessary investments”.
We all live here
A statement and a possible guiding mantra for companies to follow as we head into the 2020s.
These four words represent a powerful reminder of our relationship to the environment, our communities, and the fact that we are all on this planet together. There is a social action project of the same name founded by Rich Alapack, a Chicago-based creative mind that applied what he learned in business, art, and technology to serve the greater good of the community. The impact he and the team have had on changing the hearts and minds of Chicago’s youth and the companies that serve the communities around them is immeasurable.
But when you are the leader of a $100B global multinational, how do you put planet and people on the same level playing field as profit? One corporate goal at a time.
The first step in considering investments against environmental concerns revolves around the idea of “do no harm”. Simply weighing your investment decisions against the long-term effects on the community or environment is a great start. For innovative companies that are creating something that has never been seen before and launching that product or service in the wild, it is a much more difficult variable to use in their decision making calculus. But what if they tried? How many bad choices have scaled up in unexpected ways these past 20 years, impacting human lives and the planet for generations to come?
Companies that embrace diversity of thought will benefit from the same checks-and-balances internally as they are judged against externally. By holding themselves accountable to a culture of inclusion and diversity, large multinationals will find that they are better representations of society as a whole. As boards of directors and leadership teams begin to take on the same diverse characteristics of society, investments that benefit the world around us will benefit the many at the expense of the few - not the other way around.
In the long run, the companies that thrive in the next wave of the Roaring Twenties will weigh their strategic decisions against factors that are much more impactful than pure profit. Those companies that remain monoculture in thought and approach will stagnate or fail completely.