The Changing World of Business
Business leaders face a new challenge as success is redefined as making profit and contributing to the protection of the planet. Such a shift in focus means businesses are expected to make money while also creating a better world for future generations.
Chasing profits
Customers and investors of all types make clear that they expect business leaders to create profits and show concern for the environment as a double measure of performance. Profit driven capitalism and the growth model of business success are at a point where care about the prudent use of resources is crucial. Every business leader today needs to embraces a vision that includes a long-term financial return and environmental sustainability in a way that works for companies, communities and the planet. Without a clear commitment to the delivery of both elements of such a strategy businesses will struggle in the future to attract customers, staff and investment.
Traditional business models that focus on generating profits with little thought for the environment are no longer desirable or defendable. New models emerge as leaders take on the challenge of meeting a dual role as part of their commitment to shareholders and citizens. Many companies of course suffer from taking too narrow a focus on generating profit only and as a result are unprepared for future growth opportunities. Many business leaders also focus on maximising profit to the exclusion of the social contract that underpins a fair, inclusive and properly balanced society. Communities and families are as a result alienated, excluded from economic gain, and left to deal with the isolation and suffering caused by economic failure.
Chasing sustainability
Global warming too has increased the need for business leaders to embrace corporate citizenship and help build a more ecologically supportive planet. The business community is now seen as an embedded part of the global community and therefore expected to contribute in a way that benefits everyone rather than just immediate beneficiaries. The need to protect the planet in a way that supports a growing population has moved centre stage and usurped the narrow values of the traditional hyper-growth capitalist model. Good business leaders will of course welcome the challenge and find opportunity in the new dual mandated business environment. And for those who don’t adopt the new agenda markets will shrink and customers disappear, as investors reward companies that adhere to the discipline of good practice.
New business models will include financial and non-financial measures too, as worth is placed on the values and purpose of an organisation and on how well it supports local communities and society. Such social impact measures will play a significant role in the minds of investors and form an essential element in the success of tomorrow’s leaders.
So, the world and the world of business are changing fast and leaders must create profits and support the well-being of the planet.
