The New Leaders of Purposeful Capitalism
Purposeful leaders respond unhesitatingly to their shareholders, but also to their employees, customers, suppliers, investors and communities in which they operate, to the question of “what does society need a company like the one you lead” for.
The current moment is, without a doubt, the beginning of a very complex but also exciting decade, with great opportunities and great challenges for humanity.
A new era marked by United Nations 2030 Agenda to achieve sustainable economic growth. An era that obliges all of us, as economic agents and as citizens of the world, to make conscious and responsible decisions that not only promote economic benefits - which are undoubtedly necessary for the survival of every company - but also that rely on impact as a competitive advantage to improve business results.
The impact is the clear commitment to contribute positively to the quality of life of people and the planet without leaving anyone behind.
A new era marked by the re-emergence of a new capitalism, whose engine is a clearly defined “purpose” based on the principles and values of the company. The purpose defined by John Elkinton In the 3Ps of Triple Bottom Line: profit-people-planet joins the fourth P driving force: purpose. The purpose, based on principles and values such as sustainability and the generation of positive social impact, becomes a lever for innovation and growth for the generation of long-term value for all the company's stakeholders.
New Era, New Leaders
Immersed in a profound and perhaps “invisible” transformation accelerated by the Covid 19 pandemic that is radically changing the way we live, work and relate, this new capitalism with purpose and impact, manageable and measurable, needs new courageous, conscious and responsible leaders. These leaders, men and women, are what we call leaders with purpose and that society demands for voices today more than ever.
Los Purposeful leaders they respond without hesitation to their shareholders, but also to their employees, customers, suppliers, investors and communities in which it operates to the question of “what does society need a company like the one you lead”.
“Step up or get out of the way”
Faced with the new challenges we face, such as climate change (which, according to Bill Gates), will have greater consequences than the Covid 19 crisis, if we do not manage to be neutral carbon in 2050), our economic system no longer offers viable solutions.
We are living in a health crisis that has accumulated more than 110 million people infected and more than 2.5 million deaths worldwide. An economic crisis that skyrockets public debt to unprecedented levels to alleviate the massive destruction of thousands of jobs, companies and sectors where massive public aid will not be enough to alleviate disasters at levels of unemployment and poverty.
The pandemic adds to other major humanitarian challenges such as hunger, refugees, access to drinking water or the loss of wild species and biodiversity.
“Take a step forward, or get out of the way“was the provocative slogan of Tomorrow's Capitalism Forum, led by John Elkington, a great thinker and world leader in sustainability, held in the heart of London's financial district last January.
John Elkington says that “we are living in the positive Exponential Decade and business leaders and financial markets will have no choice but to take a step forward in radically new ways if they want to move their companies forward”.
Make the purpose a behavioral model
There's a lot of talk about two purposeful leaders, Paul Polman former CEO of Unilever, and Emmanuel Faber, former CEO of Danone. Both have pioneered the transformation of Unilever and Danone into entities with a strong purpose backed by ethical and socially responsible principles and values that have exponentially increased the income statement, while satisfying the creation of value for their customers, employees and for the community in which they operate (the so-called “stakeholders”).
But there are also many purposeful leaders in our country. José Ignacio Goirigolzarri, the next president of the new Caixabank, is a leader for whom purpose is part of his DNA. Educated in Deusto by the Society of Jesus, he speaks of purpose as an “cultural” term in Europe since the term social purpose is part of our way of being and working, as he experienced it from school with his classmates.
In all his speeches, the number of times he mentions people as the engine of success in any company or business project is surprising. Goirigolzarri highlights “the importance of teams feeling deeply proud of belonging to the company in which they work” and speaks of these teams as “our people” - he says this with a naturalness and closeness worthy of admiration.
In this regard, the words of Antonio Garrigues, another great pioneer and purposeful leader, who defends that values and principles always come first. Garrigues says that the leader's great challenge is to lower the purpose to the ground so that everyone works to achieve that purpose. In short, it's about making the purpose a comprehensive behavioral model for all employees and executives of the company.
“Our capitalism is no longer fit for purpose”
“Our capitalism no longer responds to an ideal of true purpose.” These are the firm and harsh words of the president of the Global Steering Group, Sir Ronald Cohen, the purposeful leader who has spoken the most about the need for a new capitalism based on Do good by doing good (Doing Well by Doing Good). Ronnie, as everyone who comes into contact with him (from his closest friends to the President of the United Kingdom or Bono, the American singer) calls him, defends in his book Impact Reshaping Capitalism to Drive Real Change that a new, more humane capitalism is urgent.
In this fascinating book, he appeals to governments, investors, entrepreneurs, employees, savers, consumers, entrepreneurs... in short, to each and every one of us to lead a new capitalism with purpose. To introduce “impact” into our daily decisions, demanding that our governments, financial managers and business leaders act “without leaving anyone behind”.
The measurable and comparable impact in monetary terms it becomes a competitive advantage for companies that activate it in the Core of their businesses, so that the more positive impact they generate on the production of their goods and services, the greater the economic return and the lower the risks that the company assumes. In short, a new capitalism based on the optimization of the triple return-risk-impact equation to achieve more inclusive and more sustainable growth that generates benefits for shareholders and society as a whole.
Governments also have their role
For this we will need a good battalion of purposeful, courageous and sensitive leaders, trained and prepared to make the new company 2.0.
Finally, Cohen reminds us of the strategic role that governments play in their unique role as regulatory agent of the economy. It is in their hands to prioritize and help those who generate the most positive impact against those who generate the most damages and to activate, as our European neighbors have done, greater efficiency and cost savings through public policies “that pay for results” and not for “activities (outputs)”.
A new and exciting capitalism where we all have a role to play, what will be yours? Find out more in the Transcendent's blog!
