The Ultimate Strategy
Is “be good” a part of your 2021 strategy? If not, you should reconsider.
When I was in business school, we learned that companies exist to do one thing: maximize shareholder value. At Outthinker, we’ve been talking for years about how this belief has become defunct. Companies are realizing that focusing solely on shareholder value creates resistance to growth that ultimately diminishes value to those shareholders.
A better strategy is one that aims to help shareholders by benefiting all stakeholders: the community, employees, the government, the environment, and the world.
Becoming a force for good is the ultimate strategy.
The Pope on Big Business
Last week, in an unlikely pairing, Pope Francis met with a group of businesses, investors and other groups to form the Council for Inclusive Capitalism with the Vatican. The council, whose leaders include Ajay Banga of Mastercard, Marc Benioff of Salesforce, and Brian Moynihan of Bank of America, intends to create a more just economic system and address the biggest challenges facing humanity and our planet. Their commitment to focus on environmental, social, and governance, or ESG, practices in business reflects a growing global trend and a serious step forward for the “be good” movement.
I have gotten to speak with some of these leaders personally, and I can assure you their intentions are authentic. Why? Because they make business sense.
Customers, Employees, and Regulators Care about ESG Practices
You don’t have to choose between doing good and making money. It turns out, doing good is good for business.
As the chaos of the past year has resulted in upheaval of existing paradigms, consumers are directing their focus toward organizations with a purpose greater than profit. Gartner named equality as one of the top consumer trends for 2021. The pandemic continues to highlight inequities in our society, and customers are choosing companies with values that speak to their concerns for social justice and civic engagement.
Employees, too, are looking past workplace perks for a company mission that aligns with their own. “Millennial and Gen Z employees want a work experience … that prioritizes ethical and sustainable practices,” says Fast Company. According to global trends, employees of all ages recognize the importance of a company’s values and purpose.
In tech, companies are realizing the impact of their carbon footprint and taking steps to minimize destruction to the environment. Dell has announced plans to redesign all of its products for circular reuse. By 2030, the company aims to recycle an equivalent product for each product sold. Such disclosures on ESG factors are expected to become standardized by the end of the decade, and adherence to regulations will determine what differentiates organizations of the future.
Consumers, employees, and regulators are paying attention to ESG practices. Do you have a strategy in place that addresses them?
For tips on finding out which of these practices are important to your customers, join our latest Insight to Impact Adventure with Rita McGrath. Rita shares important methods for determining the behaviors and needs that inspire your customers’ actions.
How to Design Your Strategy to “Be Good”
As more of your customers are tuning into companies that are making a difference, “be good” is an essential part of strategic design.
To highlight your organization’s contribution, ask yourself these three questions:
- How can we profitably solve a problem in the world?
- How can we better and more authentically communicate the good that our work does in the world?
- What could we start and what could we stop doing to do better in the world?
Taking the time to answer these questions will reveal a series of “fourth options” to generate innovative strategic ideas and help you determine your mission to “be good”. If you want to learn the complete Outthinker Process for developing your 2021 strategy, click here to register for my Outthink the Competition course.