Deloitte recently released this year’s edition of the Global Human Capital Trends report, focused on the rise of the so-called ‘social enterprise’. In today’s world, a company’s success is increasingly measured not only by economic indicators but also by the relationship of the company with society as a whole.
In the past, companies were judged based on their financial performance and the quality of their products or services. Today, social capital is quickly gaining importance and some view it as equally important as ‘traditional’ metrics. This trend is being driven by three main factors: (1) the growing power of the individual; (2) increasing trust in business leaders over politicians; and (3) and advances in technology that allow us to work and communicate in new ways.
The growing power of the individual can be credited to an increasingly connected world where people can measure more about a company than just its financial performance. New technology allows individuals to easily track information and express their opinion about a company. Social capital now plays a significant role in where individuals want to work and what items they want to buy.
The shift in trust from politicians to business leaders can be traced back to the 2008 global financial crisis. Even though the economy has recovered, the new financial gains have not helped the government improve individuals’ lives, address social problems or manage the impact of new technologies. Frustrated by the political system, individuals are turning to businesses for leadership on such issues as diversity, income inequality and healthcare. More generally, citizens increasingly expect companies to serve a ‘social purpose’ – and this is even becoming a criteria by which investors evaluate companies.
New technology has vastly changed the workplace. How work gets done, who does the work, and how the work influences society have been impacted by the rise of technology. Individuals feel they need to constantly adapt to new technology or risk losing their jobs, or being seen as not technologically gifted enough for a promotion. However, new technology is also creating new opportunities for businesses to have a positive impact on society
Overall, it is crucial for a company to maintain well-rounded relationships not just with their customers and employees, but also with the surrounding community. This challenges business leaders to be more involved and actively listen to their constituents. Indeed, increased engagement – with both internal and external stakeholders – is one of the most important aspects in becoming a social enterprise.
Deloitte is currently already preparing the 2019 edition of the Global Human Capital Trends report. You can contribute to this by filling-out their survey.