Just when it seems like global issues such as poverty, income inequality, and climate change are too big to solve, Lynda Gratton suggests and unlikely superhero: Corporations.
A human resources expert and professor of management practice at London Business School, Gratton has studied corporations for roughly three decades. She says there has been a shift in what makes companies successful today.
“There might have been a time when we taught business school students that it was all about competition and it was all about winners and losers. I think everyone realizes now that’s not the case. What you want to do now is really learn how to collaborate with people, how to build networks, and how to share and be generous,” she says.
In her book, The Key: How Corporations Succeed by Solving the World’s Toughest Problems, she explains how companies can become stronger by using their considerable resources in three key areas.
Gratton maintains that when you use training, technology, and culture to develop your employees and create work environments that “amplify the intelligence and wisdom of people,” your company wins.
When your employees are working on boring tasks that don’t relate to their interests or talents, it won’t be long before many seek other opportunities. Similarly, employees who are constantly exhausted and stressed will have difficulty being innovative and creative.
They should be able to take time off and come back without resentment or difficulty. Employees should be able to migrate toward areas within the company that interest them. Those are the areas where they’re typically going to bring value and new ideas, Gratton says.
Companies also need to foster “emotional vitality,” which stems from company culture and relationships. Important social connections happen in the workplace, whether in-person or virtual.
Gratton says companies should recognize the importance of those connections in retaining good employees. Look for ways employees’ can better collaborate and develop respect, trust, and relationships as well as more effective ways of working.
Gratton reports that Procter & Gamble’s shift to an open innovation process in its research and development is projected to contribute $3 billion to the company’s annual sales growth by 2015.
Another area of importance for companies’ long-term success is the immediate vicinity in which they do business. When a company supports and makes positive contributions to its community, suppliers, and others who are directly affected by the company, it is rewarded with good will and support in return. Alternatively, when companies ignore or damage these people or entities, the results can range from nuisances to legal action, depending on the severity of the damage inflicted.
“Large-scale research of many thousands of companies shows that those that actually really make and effort in their environment, in their neighborhood, in the world actually have higher shareholder return than those who don’t. So actually it’s in everybody’s interest to try and build a world that is resilient because no company is isolated from the rest of the world anymore,” Gratton says.
Companies that use their specific strengths to solve global issues are reaping great rewards, Gratton says. One example she says it Google, which is an undeniable master of harnessing information. Google Ideas, a think tank that uses the company’s vast information networks to work with other organizations to solve complex challenges like human trafficking and gang violence.
This isn’t about corporate social responsibility, Gratton says. Instead, it’s about companies that have developed significant capabilities in a particular sector demonstrating that they’re using those powers to solve important problems that don’t directly benefit the bottom line.
That helps build trust in the company and strengthens the business, whether it’s developing information networks or putting shampoo on heads around the world, she says. Having such goals also increases employee retention, because people want to feel good about the company for which they work.
When you put time and effort into caring for your employees and community while demonstrating that your company is willing and able to solve bigger challenges for the common good, you’ve created a strong foundation on which your business can grow.
Developing a loyal, motivated team of employees, and a positive brand association are areas on which some companies spend many millions of dollars, says Gratton.
She maintains that without the basic yet widely ignored concept of focusing on employees, community, and solving the global problems that challenge us all, companies not only can’t succeed, but they’re doomed to struggle in an environment that demands more.