“A crisis does not create character, it reveals it.” After years of economic expansion and a frothy stock market, many organizations’ unsustainable approaches to people, community, and planet are coming to the forefront, and Dennis Leary’s spot-on quote is showing that many leaders’ promises about corporate responsibility were little more than a public relations ploy.
The convergence of pandemic-induced supply constraints, the Black Lives Matter movement, the ESG investing demand, and now an acute labor shortage have forced many companies to take off their grossly-expensive and meticulously-crafted brand masks to reveal their true identity. The SEC approved Nasdaq’s rules on board diversity and more reporting requirements and standards are on the way.
The sudden surge of transparency demands on business is not only letting the public see what’s behind the corporate veil, but also forcing organizations to consider their “brand” as employers, community members, and environmentalists. People want to work for organizations that are fair and purposeful. Companies are being held accountable for breaking the rules and misleading customers. Investors are finding opportunity in cleaning-up dirty industries and demanding to know exactly how products impact the environment.
In short, organizations now must be clear on who they are, not just what they are worth.
Systems of non-financial accounting are catapulting this process from concept to practice. How do you treat your people? Is your community benefitting or hurting from your presence? What is your impact on the environment? Instead of just qualitative and subjective answers to those questions, organizations now need to provide quantitative and objective outcomes.
The Great Resignation highlights these demands. People would rather not work than spend their hours toiling for a company that does not share their values. Even with the pandemic-boosted unemployment benefits coming to end, 95% of organizations are having a harder time finding workers for open positions and talent is the number one challenge on CEOs’ minds.
Decades of careful and expensive research and development have created extremely efficient marketing systems that can target individuals based on their preferences, history, location, activities, photos, email and more. Yet, at the same time, there has been virtually no innovation in the employee experience and certainly very little progress—as evidenced by both the labor shortage and burnout epidemic.
Organizations need to accelerate progress in how they engage with their people, communities, and environment at a time when they are already being squeezed by other challenges. But the companies with the courage and foresight to do so will find their way out of crisis and into market leadership, growing not just in their transparency and treatment of all their stakeholders, but also generating more profit.