The growing divide between winners and losers has become a specter that haunts both business and society — and the Boston Consulting Group says it’s time for business executives to step up and confront it.
The Brexit revolt in the United Kingdom was a warning for greater economic uncertainty but corporate leaders can take a larger role to transform and improve the economic landscape.
Their key point:
Business leaders need to balance two apparently conflicting objectives. First, they need to secure the sustainability and prosperity of their own companies. This remains a CEO’s prime responsibility, and it has become much harder in an era defined by lower growth, impatient investors, geopolitical uncertainty, and extremely rapid technological change. Second, they need to shape the conditions for continued and more inclusive economic prosperity and, in particular, for global economic integration and technological progress.
To achieve these ends, the authors propose that CEOs embrace a 7-point agenda:
1. Shape the next wave of globalization. “Business leaders can take an active role in shaping the next phase of globalization, looking beyond cost-based offshoring and emphasizing the benefits of trade and technology across a wider geographic and demographic base. Technology will be crucial.”
2. Support entrepreneurial business ecosystems. “As corporations rethink their global supply chains and business models, creating ecosystems of suppliers and aspiring entrepreneurs could be part of the journey.”
3. Leverage technology from front to back. “Using technologies to spur innovation and give people more fulfilling lives is an opportunity in nearly all sectors of the economy. But this inclusive approach may require some uncomfortable choices.”
4. Invest in human capital. “Finding effective and affordable ways to help people acquire transferable skills during their careers, not just before they start out, is a large social challenge.”
5. Apply a social business mindset. “To contribute to society, and to gain its support, businesses must be deeply embedded in it. One way corporate leaders can achieve this is to establish social businesses that are adjacent to their core business models.”
6. Rebalance and align rewards. “Mismatches between rewards and performance along the entire pay scale, from entry-level workers to leaders, undermine perceptions of fairness and faith in the system. Aligning performance with rewards presents an opportunity for corporate leaders to directly shape people’s perceptions of self-worth, fairness, and access to opportunity.”
7. Renew and own the narrative. “Narratives shape perceptions and political reality, which in turn shape economic reality. Business leaders have traditionally avoided broader societal issues and have focused on their narrower role.”