The world is in another bear market, tech is preparing for a downturn, and startups are making layoffs.
During unpredictable times like the present, business leaders can use moments of crises as an opportunity to find purpose and articulate a vision for impact that extends far beyond the here and now.
Most companies that have gone through (or are going through) layoffs never close the loop with staff by saying to those who remain “OK, now all of you are safe.” The signaling coming from business leaders today can be rational, but also focused on long-term growth and people prosperity.
In the coming decade, Generation Z will account for the vast majority of our global workforce. This is a cohort that cares deeply about workplace flexibility, mental health, and other benefits, far more than previous generations. This is also a generation that expects to hold their employer more accountable for its actions than any other previous generation. In other words, once we make it through these difficult times, expect the questions “how did you treat your people during the 2022 bear market?” or “what type of impact did you deliberately choose to have during the 2022 downturn?”
While the private sector focus remains on building, growing, scaling, and dominating markets from transportation to healthcare to consumer goods to social media and beyond, lost in the shuffle of competition are the companies that “zag” while everyone else “zigs.” In an environment where everyone is “hunkering down,” my view is that businesses that ignore (or invest frugally in) the elements important to Gen Z, such as culture, impact, and corporate responsibility, will lose in the long-run regardless of how strong their market share or market cap is today.
It’s well established that consumer demand is shifting irreversibly in the direction of impact—71% of American consumers actively want to buy from companies committed to corporate responsibility. At the heart of this trend is the demand-side belief that a sharp focus on winning and retaining business shouldn’t preclude a company from spinning up an equally powerful impact infrastructure.
Corporate leaders, boards, and senior executives should take notice and make plans to respond in the near term. Why? Companies that publicly commit to helping underserved communities, contributing to specific causes (like fighting hunger, renaturing, reducing carbon footprints and pledging water positivity) or allocating resources to philanthropic endeavors will win passionate and loyal customers which, in turn, will drive sustained revenue growth.
Leaning into ‘impact infrastructure’
But that’s not enough. We need to institutionalize responsibility as a central business tenet aimed at building a common bond between companies and communities. Several organizations including Patagonia, Microsoft, Lego, Coca-Cola, and Salesforce rank high as leaders in the space, but every company should view impact as a core and essential element of business, like accounting, human resources, or sales.
As the World Economic Forum notes, organizations from large corporations to new startups looking to lean into this impact infrastructure should consider reporting responsible business outcomes and metrics along with customer acquisition numbers, balance sheets, and expansion plans in board reports. Transparency should provide the foundation for these efforts. Accountability should reside with department heads, C-suite executives, and board members on top of consumer pressure (many already highlighting gaps and failures among companies to do more for communities).
A few things leaders at every company can do today to invest in people and weather tough market conditions: improve employee benefits like health care or schedule flexibility and commit (or recommit) to a purpose that extends beyond the company’s day-to-day business.
Universal employee benefits—available to everyone from the C-suite to the newest junior hire—like comprehensive healthcare and life insurance, are table stakes, not the mark of a “best place to work.” Other benefits viewed as perks or nice-to-haves, like food or flexible work hours, should become full-fledged employee benefits that help fuel productivity in the workplace and improve life outside of it.
At Sharebite, we forged our business model around a mission to alleviate hunger—especially when economic conditions are tough and labor markets remain tight. Helping our client companies create a better place to work for employees, with food benefits, is a core part of our own impact infrastructure. This collective purchasing power of companies allows us to amplify impact for small businesses, as well as society. Each transaction made on Sharebite results in a donation made to charitable partners such as City Harvest and Feeding America, organizations that provide meals to people who are food-insecure.
Moments of crises and tough times come and go, but people and culture are enduring; not to mention, businesses with a mission or impact-oriented core simply perform better.
This environment presents a unique opportunity for business leaders to create their own impact infrastructure, which will pay outsized dividends in the long run. And investing (or reinvesting) in the welfare of employees, customers, and community should become a top priority for all private sector companies. That’s where doing the right thing for stakeholders becomes the right thing to do for shareholders.
Dilip Rao is the CEO and cofounder of food ordering platform Sharebite.
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