In 2019, Bloomberg Businessweek invited subscribers to submit big technical ideas, from which a select number would be presented by the authors at their upcoming global conference. That motivated me to write the following article. Since it did not involve technology, I never submitted it; and it has lingered on my desk until now. So, here is my Big Idea!
We live in a unique period in our history. The underpinnings of our society, democracy, free-market capitalism and organizational development, have evolved to this critical point. Democracy as our political system continues to provide the greatest opportunity for free expression of ideas to advance and transform our humanity. Our economic system based on free-market capitalism continues to offer unlimited opportunities for innovation to solve our most pressing problems affecting the quality of our lives. The development of organizations of all sizes has provided us with a limitless number of people all over the world to work together to accomplish things we never could have dreamed were possible. When these three systems work in balance, there is nothing that we can’t do or become. When they are not in balance, we are at risk of seeing our way of life destroyed. That is what we are starting to experience in America and in the world today.
We see democracy being undermined by internal and external forces that can manipulate public opinion and voting behavior through distorted and false communications. We see capitalism and free markets being undermined by removing or reducing the controls to ensure equal opportunities and open markets. And we see organizations, especially large global entities, operating for the benefit of a few stakeholders at the expense of others.
People are at the heart of all three systems but it is the leaders of organizations who play a critical role of ensuring all three systems work in a state of equilibrium for the common good. It is especially so for leaders of large organizations who have the power and influence to shape democracy and our capitalist system to serve their organization’s and personal interests.
It’s not that these people are bad. They are just misguided. They are operating under the widely held belief that large for-profit organizations impacting millions if not billions of people must serve the interests of their shareholders above everything else. In today’s world where every action may have an impact upon people across the globe, we need to think differently about the role of organizations and whom they really serve.
What we need is a new context for leadership, which we call Purposeful Leadership, where every organization is clear about the difference it is making for all stakeholders, and pursue that Purpose or mission in a way that serves shareholders, customers, employees, suppliers, communities and others who are impacted or who impact them. We call all those stakeholders, their stakeholder world, the ecosystem in which the organization operates and contributes to society. When leaders lead from Purpose, they bring clarity and focus to their organization. They don’t get distracted by the demands of one stakeholder group over those of another; and they continue to reinvent themselves to remain relevant to their customers and to those who are served by the fulfillment of their Purpose. As stewards, organizational leaders must address the net impact or contribution their organization has on their stakeholder world. That is the metric their organization should be maximizing, not shareholder profit or value.
As humans we have the natural ability to organize to solve any problem worth solving. There is no other reason to organize. Capital has a cost, like any other resource. But its cost is not why the organization exists. The organization exists to make a difference for all of us.
Leaders who embrace Purposeful Leadership will see the value of having democracy and free-market capitalism work for the benefit of everyone. They will see that in the long run it will serve them better. For this reason, Purposeful Leaders will ensure that the principles that maintain this balance remain strong, valued and appreciated. To preserve our way of life, Purposeful Leadership must become the best practice in the world business community.