I’m in Philadelphia this morning, but rather than dwell on the Democratic convention, I want to focus on what it symbolizes. We live in a time of unprecedented prosperity – the last two decades have seen more people around the globe lifted out of poverty than at any time in human history. Yet, we also live in a time of growing uncertainty, especially in developed countries – as the Brexit revolt in the U.K. and the rise of the Sanders and Trump in the U.S. indicate. Support for the twin drivers of post-World War II prosperity – globalization and digitization – is eroding.
How should global business respond? Rich Lesser and Martin Reeves of BCG have an interesting piece out this morning that calls on business leaders to adopt a new “corporate leadership manifesto.” It “won’t be easy,” they say; but failing to adopt it may mean companies lose their “freedom to operate.”
You can read the full piece here
, or read my summary of their “seven imperatives” for business below:
1) Use technology to rethink globalization. In the future it must be less about global supply chains and low-cost offshoring, and more about serving the needs of individual markets.
2) Create business platforms and ecosystems that allow more people to participate. That’s not just for tech businesses, but also for things like energy, with decentralized grids, or manufacturing, with decentralized supply chains.
3) Deploy technology from front to back. Business often adopts technology with a view toward increasing efficiency and eliminating jobs. Lesser and Reeves says they should start with serving the needs of customers, and work back from there.
4) Invest in human capital. The rapid pace of change requires people to constantly be acquiring news skills to survive. Companies should facilitate that re-skilling.
5) Apply a social business mindset. Business must think about the effects of their operations on communities and underserved populations. The Milton Friedman construct – that the social responsibility of business is to make a profit – is no longer sufficient.
6) Rethink compensation. Workers need a living wage, and exorbitant pay for corporate leaders, particularly when not linked to performance, undermines support for business.
7) Own the narrative. Business leaders need to do a better job explaining to the world how capitalism solves problems and creates prosperity.
Simple enough? Let me know your thoughts.