Social Enterprises Redefining the Paradigms of Organizational Growth
Amid concerns about automation, the need for new skills, an aging workforce and tightening labor markets, the make-or-break issue facing companies this year is the need for realignment among the C-suite to focus on business’ evolving role in society. With more than 11,000 HR and business leaders weighing in, this year’s Deloitte Global Human Capital Trends report reflects.
The report discusses social enterprises at length and defines it as an organization whose mission combines revenue growth and profit-making with the need to respect and support its environment and stakeholder network. The rise of social enterprise therefore is a reflection of the growing importance of social capital in shaping an organization’s purpose, guiding its relationships with stakeholders, and influencing its ultimate success or failure.
Commenting on the significance of social enterprises, Gaurav Lahiri, Partner,Deloitte India said,“Today, more than ever, we are witnessing seismic changes in the workforce, the workplace, and the technologies used in the world of work. Organizations are no longer assessed based only on traditional metrics such as financial performance, or even the quality of their products or services. Rather, organizations today are increasingly judged on the basis of their relationships with their employees, their customers, and their communities, as well as their impact on society at large—transforming them from business enterprises into social enterprises.”
“As society grapples with daunting demographic, technological and social challenges, people want business leaders to fill the gap, but our research shows they have a long way to go,” said Erica Volini, Principal, Deloitte Consulting LLP, U.S. human capital leader. “This year’s report is a wake-up call for organizations to look beyond their own four walls and re-imagine their broader roles in society. Integrating the C-suite to build a more social enterprise will be a differentiator for businesses to attract the right talent, drive customer loyalty and sustain long-term growth.”
Three factors catalyzing the rise of social enterprise:
- Growing power of millennials
Millennials comprise a majority of the workforce in many countries, and their power is growing over time. Millennials are actively questioning the core premises of corporate behavior and the economic and social principles that guide it. Social capital plays an outsized role in where they work and what they buy, and 86 percent of millennials think that business success should be measured in terms of more than just its financial performance.
- Widening leadership vacuum in society
Across the globe, people trust business more than the government. Citizens are looking to business to fill the void on critical issues such as income inequality, health care, diversity, and cyber-security to help make the world more equal or fair. This expectation is placing immense pressure on companies, but it is also creating opportunities. Organizations that engage with people and demonstrate that they are worthy of trust are burnishing their reputation, winning allies, and influencing or supplanting traditional public policy mechanisms.
- Changing technological landscape
Advances in artificial intelligence (AI) and new communications technologies are fundamentally changing how work gets done, who does it, and how it influences society. People increasingly realize that rapid technological change, while holding out the promise of valuable opportunities, also creates unforeseen impacts that can undermine social cohesion. However, at the same time, technological advances will open up new opportunities for businesses to have a positive impact on society.
The report also throws light on some of the most compelling statistics by themes:
Filling Society’s Leadership Vacuum
Increased transparency and heightened political awareness have drawn widespread attention to business’ role in society as a driver of change. Organizations find they are increasingly expected to exercise their ability to do social good, both externally for customers, communities and society, as well as internally for their employees. True social enterprises must take a total stakeholder approach to pressing public issues to maintain reputation and relevancy.
“Corporate citizenship is now a CEO-level strategy and critical to a company’s bottom line, ”said Josh Bersin, Principal, Deloitte Consulting LLP, and founder and Editor-in-chief of Bersin. “It’s not about check-the-box CSR initiatives, but integrating citizenship, fairness, inclusion, and purpose as core values across work practices. Customers and employees alike are holding companies to higher standards than ever before and rewarding companies who demonstrate socially-conscious behavior with unwavering loyalty.”
Also, as constituencies look to how companies treat their own employees, tackling the alternative workforce takes center stage for socially-conscious organizations. Globally, by 2020, 37 percent of organizations expect a growth in contractors, 23 percent in freelancers, and 13 percent in gig workers. It is critical to successfully implement hybrid workforce strategies because they can have a significant impact on an organization’s employment brand and external reputation.
The power of the individual requires a holistic approach to jobs and careers
In the past year, organizations have become laser-focused on how automation induced job shifts will impact individuals. The Deloitte research shows that more than 4 in 10 companies believe automation will have a major impact on jobs, and 61 percent are now actively redesigning jobs around AI and robotics.
Against this backdrop, companies and individuals realize the traditional career model is becoming defunct. 62 percent of those surveyed consider building new career models and skills as very important, making it the most important Human Capital trend for India. However, only 14percent are very ready to address this challenge. Also the data shows a clear disconnect between development programs and today’s career paths in India.
In addition to investing in employees’ professional development, organizations must also rethink how they invest in their employees on a personal level.
According to Bersin research, only 3 percent of companies think their reward offerings are very effective at motivating talent.
“Personalized incentives and well-being strategies are key differentiators in talent acquisition and retention, particularly in a tight labor market,” said Volini. “Once-a-year reviews and bonuses are table-stakes in today’s enterprises. Expanding rewards and well-being strategies is critical for the C-suite if they want to attract and retain the right individuals.”
The symphonic C-suite - teams leading teams
Behaving as a social enterprise and managing the external environment’s macro trends effectively demands an unprecedented level of cross-functional vision, connectivity, and collaboration from C-suite leaders wherein organization’s top executives play together as a team while also leading their own functional teams, all in harmony.
The symphonic C-suite is the next stage in the ongoing evolution of leadership models. This new model is necessary to help leaders to understand, manage, and respond to the complex social capital issues that organizations face, enabling them to tap opportunities, manage risks, and build relationships with internal and external stakeholders.
Leveraging Technology for Sustainable Growth
Contrary to popular belief, rather than eliminating jobs, cognitive technologies will serve to create new jobs that are service-oriented, interpretive, social, and use essential human skills.
With the deployment of AI, robotics, and automation showing no signs of slowing down, companies must rethink their work architecture to maximize the value of both humans and machines.
Also, as technology permeates the workplace, people analytics is at the top of executives’ minds, with 90 percent of respondents in India rating it as important or very important, while only 13 percent of respondents feel very ready to deal with this challenge. In India, with 54 percent of the companies actively managing legal liability related to their organization’s people data, only 23 percent have excellent processes to safeguard this data, exposing them to additional risks that can threaten their status as a social enterprise if not proactively managed.