This morning I listened (and listened again) to this insightful McKinsey podcast in which Paul Polman former CEO of Unilever and chair of Oxford Saïd Business School), and Dame Vivian Hunt of McKinsey, discuss the increased prominence of stakeholder capitalism.
Many family businesses will be concerned to adapt to a more socially responsible business model, in a post pandemic world. Paul makes the point that you can no longer simply look at the balance sheet to determine the value of a business; its about the non-financial attributes.
Going back to the routes of the business will often unearth a purposeful stakeholder core, which may have got lost along the way as shareholder capitalisation took priority. This can often prove a useful exercise in unifying business families and inspiring the next gen who may not have witnessed that original entrepreneurial spark of their ancestor who established the business.
Greater trust and confidence in businesses and business leaders will also prove incentivising to the next generation of business owners, who will want to see businesses giving back, to the environment and their communities, more closely aligned to their own values-based mindsets.
I particularly like this comment from Paul: "...I don't think you want to work for a company where you keep earning when the world is burning."
The fact that the crisis had multiple vectors—health, economic, social justice, technology, and uneven effects around the world—really reminded business leaders that we have to respond in a different way. Businesses have realized a pretty urgent need for change, not just because of 2020, but the cumulative effect of these crises. Whether they’re your employees, activists, different trenches of investors, or customers, understanding stakeholder needs and managing them better and in a more holistic way came to the fore.