The recent US elections proved what many people have long known: the country is deeply divided, with people holding vastly different beliefs about the road forward. What does this mean for US business leaders? What should they do as the world continues to move toward a corporate purpose and governance that considers broader societal impacts?
A useful direction is re-examining their own organisation’s employment impact. Many citizens feel a strong sense of insecurity and fear about the future, as they sense their jobs and livelihoods have been under threat from globalisation, technology and policy changes — this has been the case since before they the Covid-19 pandemic.
As a result, they are attracted to a message that promises to protect them from those changes. Addressing this insecurity and fear is key to bringing unity to the US.
Policymakers and the new administration will have a profound role to play in setting labour market institutions, such as incentives for skilling and training, hiring and firing regulations and a minimum wage that are all fit for purpose. But business leaders too can ask hard questions and be part of the solution.
First, every organisation can review the quality of the wages paid, with an emphasis on identifying how it can help the most vulnerable employees that might be paid below living wage.
Second, it can create an environment where career advancement and personal growth is emphasised so employees do not feel their careers are stagnant.
Third, it can identify the potential for job creation in locations that have been left behind, experiencing a scarcity of jobs and high unemployment.
Fourth, it must move beyond just hiring racial minorities and women to creating opportunities for them to be promoted, thereby moving from diversity to inclusion and belonging.
Fifth, it must set benefits that allow workers to be truly healthy and bring their best at the workplace: paid sick leave and childcare support are key focus points in this area.
All dimensions can be measured in dollar terms to create impact-weighted performance metrics, allowing us to compare and benchmark how different companies impact employees.
Time is of essence and the role of business leaders will be immediately relevant in the months ahead, before the inauguration of president-elect Joe Biden.
Focusing on the ‘S’ of environmental, social and governance (ESG) factors is becoming increasingly important not only for organisational performance or human progress, but also for the health of the system which supports trillions of dollars of economic activity every year.
George Serafeim is Charles M. William professor of business administration at Harvard Business School