The Future of Business
I am writing from a perch above Fifth Avenue in New York City—watching the strolling hominids with keys and supercomputers walking to their destinations. I happened to be in the city the same day as the Business Roundtable—a lobbying organization that represents many of the largest companies in America—convened a “secret” meeting of nearly 200 business leaders, including the CEOs of Best Buy, Land O’Lakes, and 3M. They drafted a new purpose statement that fundamentally shifts the prevailing focus of public companies for the last many decades from “a duty to the corporation’s stockholders” to using business for the greater good.
Typically, bad things come out of meetings that we don’t hear about until after the decisions are made. But this time, some of the most powerful CEOs in the U.S. are focused on the role business can play, beyond making a profit.
You can read the radically altered Business Roundtable statement online, but here are some of the notable additions that stood out to me: “Delivering value to our customers.” “Dealing fairly and ethically with our suppliers.” “Investing in our employees.” “Supporting the communities in which we work.” “Generating long-term value for shareholders.”
The last time the Business Roundtable issued a purpose statement was 1997, and customers weren’t even mentioned in it. But that’s the least of what you should be thinking after reading this new purpose. Is business replacing the role of government? Is business replacing the role of religion? Is this an overreach or the future of a more sustainable, responsible role for the modern corporation?
Nope, this is the future of business, and it should inspire you.
In our country, government was designed of the people, by the people, and for the people. Currently it’s in a strange place—all three of those pillars are under question, scrutiny, and sometimes even attack from both sides of the political spectrum. So an influential group of executives took it on themselves to advance the role and responsibility of business.
This change has great implications for where the next generation of business leaders can take the practice of creating business. I like to think our community in Minnesota is more culturally aware and capable of moving business in this new direction. But we need to make an essential shift in how we think about charity versus impact in the businesses we design. Charity is the easy way to erase wealth guilt. In contrast, impact is taking responsibility for the economics of your behaviors and earnings. It means giving a job, essential knowledge, a purpose, or a second chance instead of a buck to the next person you see on the street corner with a handwritten cardboard sign. And it requires corporations to be more focused on using the resources of business to improve our communities, rather than just giving away a percentage of profits.
Now you’re thinking I’m a hippie (my father) or a Gen Yer (my daughter). Actually, I’m a realist, an optimist, a Gen Xer, and an entrepreneur.
The purpose of business has been changing for a long time, with Thrivent, Target, and Cargill, three of our local notables that make doing good part of their mission. This new set of words and signatures by 200 leading CEOs solidifies this growing philosophy.
In fact, a business can free people from poverty and dependence on charity. If you’ve watched the microlending community, mission-driven brands, and those that do good while doing well, you’ve noticed it. Now, consider it a competitive advantage in this new marketplace. What does it mean to have your business designed to achieve a purpose not solely centered on selling more widgets to widget users for a profit? This can be an even better definition of a sustainable competitive advantage.
From this seat in the center of New York City, my hope is the Business Roundtable meeting was a leading indicator of the great change coming. And if you see a larger purpose for business, perhaps you could help me focus more attention on this issue.
Start by talking with your team about the idea of purpose and the impact your business and brand makes in your community and in the world. Allow your team to imagine the impact you could have by looking closer at your supply chain to source better. Or reconsider how powerful your brand is and what behaviors it motivates beyond just buying your offering.
Next, go to a faraway place—not just the cabin, but a place where you can look at your approach to business and brand building from a distance. See the impact you make today and think about the impact you could have. Give yourself a moment to dream.
The Business Roundtable has given us permission to make the changes we know are better for business and the communities we serve. Take this moment, and get to work dreaming about how to make a larger impact on our world.