[Column] Cameron Beveridge: The new business balancing act has leaders walking a tightrope
Business leaders are engaged in a delicate balancing act as radical workforce changes, new customer demands, external pressures and the impact of the pandemic collide to create a multitude of new challenges and opportunities.
Corporate leaders are having to balance traditional business objectives such as revenue and profit with the demands of the modern economy that include building a healthy company culture, playing a positive role in society and being a good corporate citizen.
The lines are being redrawn around what employees, customers and broader society expect of a modern business, especially as it relates to a company’s role in building a more equitable and sustainable world. Present trends indicate that we are moving toward a situation where environmental sustainability, fair employment practices and societal value trump pure profitability.
Businesses have traditionally focused on creating maximum value for shareholders, and short-term financial profitability continues to be vital to a company’s growth and success.
However, as the mounting costs and headline-grabbing impact of climate change starts affecting more people in developed and emerging economies, consumers are increasingly demanding that companies also make positive contributions to the environment and vulnerable communities.
Looking beyond quarterly results
Studies have found that 84% of global consumers try to shop from companies that support causes they care about, while another study revealed that two-thirds of consumers and 73% of Millennials globally are willing to pay more for a sustainable brand.
There is growing recognition that companies need to shift their focus from purely delivering quarterly results that drive the share price, to ensuring they minimise their impact on the environment and prioritise creating healthy company cultures, ensuring adequate worker pay, and act as exemplars or enablers of more sustainable business practices,” explains Beveridge. “If your positive quarterly financial results were achieved on the back of environmental devastation, for example, consumers today are more likely than ever to abandon you for a more equitable-minded competitor.
There are solid economic reasons for building sustainability into a company’s business model. One study found that companies with positive Environmental, Societal and Governance records produced higher returns, had a greater likelihood of becoming high-quality stocks, and were less likely to go bankrupt than their less ESG-focused peers.
Business leaders still need to produce solid bottom-line results and ensure the financial sustainability of the business,” says Beveridge. “This is forcing them into a delicate balancing act where the correct course of action is not always clear, adding pressure to decision-makers already besieged by the disruptive impact of the pandemic, a constrained global supply chain, and growing economic pressures. Even the World Economic Forum, highlighting the importance for the private sector to look beyond the bottom line, put the onus squarely on business leaders to figure out the correct balance between short- and long-term priorities.
The new talent battlefield
One of the most obvious examples of the new business balancing act is in workplace culture and employee engagement. During the early stages of the pandemic, businesses around the world shifted to remote models that saw millions of workers performing their day-to-day tasks away from the confines of corporate offices.
The past two years have marked a greater shift in how we work than the two decades preceding it. In the services industry, workers who previously completed their tasks within an office space under the watchful gaze of managers and HR specialists were suddenly asked to maintain high levels of productivity from home. Now that offices are reopening, many of these formerly office-bound employees now prefer to work remotely at least some of the time, creating new challenges in attracting, motivating and retaining top talent.”
The shift in how people view work came under the spotlight when millions of US workers shifted to more fulfilling or more accommodating jobs in a process dubbed the Great Resignation.
This shift in expectations of what people want from their jobs is forcing companies to rethink their company cultures, their salary packages, and the types of support they need to provide to employees to ensure high levels of productivity and retention.
Research indicates that real wages in the US have been stagnant for decades, while UN data points to growing inequality for more than 70% of the world’s population. Work-related stress is also growing and is now the most common form of stress in the UK, with only 1% of workers saying they’ve never experienced it.
“Business leaders are confronted with the task of balancing their teams’ productivity against the physical and mental wellbeing of each employee,” explains Beveridge.
As a company providing technology tools and expertise that help companies run better and become more successful, we are in the enviable position to act as both an exemplar of sustainable business practices and an enabler of more sustainable business models. The shift to remote work created a situation where many employees work longer hours than ever before, raising the chances of burnout and forcing companies to implement additional measures to support employees that are working under immense pressure.