Amid Uncertainty, Let Stakeholders Be Your Guide

The 2020 election marks a pivotal moment in a year of significant change. C-suite leaders may have many questions about what lies ahead for their organisations, but one force – stakeholder capitalism – is likely to continue gaining momentum regardless of

“The health crisis has highlighted health and income disparities, while the election has brought conversations about many social issues to the forefront. For corporations that have committed to making an impact on society, 2020 can be a call to action.”

The presidential race and the national conversation it has inspired are top of mind for C-suite leaders, but the election is just one of several major upheavals executives are facing this year. Today, organisations are also working to recover from the economic and health impacts of the ongoing pandemic, adapting to continued disruptions from climate change, and facing increasing pressure to address social issues including racial injustice, gender equality, and economic parity.

Regardless of the election’s outcome, these forces of change will likely continue to exert influence on corporate agendas. At a time when so much is unknown, one thing remains clear: The most effective leaders will likely continue to rely on organisational purpose – the reason their companies exist – to find their way. Increasingly, that purpose is oriented toward stakeholder capitalism, which prioritises the needs of all stakeholders – customers, employees, suppliers, and communities as well as shareholders.

In fact, the combined forces of the pandemic and the election have likely accelerated the momentum toward stakeholder capitalism, as more corporations recognise that businesses cannot succeed if society fails. The health crisis has highlighted health and income disparities, while the election has brought conversations about many social issues to the forefront. For corporations that have committed to making an impact on society, 2020 can be a call to action.

The Shift Toward Stakeholder Capitalism

Today, many businesses are influenced by the leadership of the Business Roundtable, which initiated a global conversation on the need for corporations to consider their responsibility to groups beyond investors. In 2019, the organisation released a new statement of purpose for a corporation, signed by 181 chief executives – including Deloitte Global CEO Punit Renjen – who committed to leading their companies on behalf of all stakeholders.

Since then, momentum has continued to build. Last month, the World Economic Forum’s International Business Council released a universal set of stakeholder capitalism metrics that include environmental, social, and governance indicators and disclosures for corporations, financial markets, investors, and society. Deloitte played a key role in helping develop those metrics – and is advancing on social impact commitments of its own.

One of those commitments is WorldClass, an effort to expand opportunities for traditionally underrepresented and marginalised groups. By 2030, we aim to help 50 million people worldwide by improving educational outcomes, reskilling, and creating new job opportunities. Like many other corporations, we believe that business can grow only when society flourishes as well.

Leading the Change

Given the many pressing issues of today, how can leaders decide which challenges to tackle – and how to prioritise them? How can they effectively identify and meet stakeholder needs? The following strategies can guide C-suite leaders as they seek to drive change in their organisations and in society as a whole:

Follow your purpose. Making decisions based on shared values can help steer actions when the next steps seem unclear. At Deloitte, we are guided by our purpose to make an impact that matters for our clients, employees, and communities. This purpose helps us recognise that, in difficult times, we have a responsibility to respond.

Listen to stakeholders. Understanding what issues matter most to stakeholders starts with listening to each of many groups. Deloitte’s global workforce is 82% millennial and Gen Z – and our research makes it clear that this subset is concerned about the environment and takes the issue of social purpose as a personal calling. Whether they’re employees, clients, or partners, stakeholders often have valuable feedback to share about business priorities.

Collaborate boldly. Grappling with the biggest challenges often requires cooperation across businesses, industries, sectors, and geographies. With Deloitte’s WorldClimate commitment, for example, we are engaging and empowering our people and clients to make responsible climate choices. Ultimately, we plan to assemble client ecosystems to address specific challenges, such as creating sustainable aviation fuel or reducing food waste in the hospitality sector.

Secure internal alignment. One of the most significant hurdles C-suite leaders can face in launching any new initiative is how to manage differing points of view. It’s important for executives to engage in candid, two-way communication with their teams so that members of those teams can ask questions, voice their opinions, and feel heard. Ongoing conversations are also key to helping ensure a productive dialogue that supports meaningful change.

Bring everyone on board. When an organisation launches a new initiative, communicating its relevance to shared values can help ensure stakeholders are personally committed. Fostering a sense of ownership can also be critical; Deloitte’s WorldClimate strategy, for example, depends on employees changing their own behaviours.

Measure effectiveness. Once a new initiative has been rolled out, it’s critical to track its success, seek feedback, and refine if necessary. Our diversity, equity, and inclusion strategy – ALL IN – has evolved from our initial objective to increase the number of women in senior leadership roles and now incorporates advancing LGBT+ inclusion and supporting mental health. We’re also working to improve our everyday culture through education designed to reduce microaggressions and uncover and mitigate unconscious bias.

Deliver on trust. When organisations make a commitment to take on societal challenges, they’re also making a promise to their stakeholders – and if they don’t deliver, that can erode trust and result in reputation damage and loss of revenue. Corporations can avoid that risk by measuring, enhancing, and amplifying their ability to deliver on trust, solidifying stakeholder relationships in the process.

Today, C-suite executives face polarising political forces, rapid technological change, and demands from a new generation of consumers and workers that are changing the nature of business leadership. Organisations are also being held more accountable to society for their statements of purpose. These shifts call for new models of thinking and a bold vision for the future – one that addresses the needs of customers, employees, communities, suppliers, and investors alike. In this time of upheaval, the commitment to stakeholder capitalism is likely not only to endure, but to continue gaining momentum.