- A major global study shows companies are increasingly being expected to take a lead in society, rather than just concentrate on financials.
- Only 23% surveyed in Australia by Deloitte say social responsibility is a priority reflected in their corporate strategy.
- However, Australian business leaders are better at working together than their global counterparts.
Corporate Australia is falling short when it comes to building a strategy to making a difference in society.
The main thrust, despite a push from younger employees, is still more about getting a good set of numbers to put before shareholders.
The 2018 Deloitte Global Human Capital Trends report released today showcases the transformation of companies from business enterprises to social enterprises.
Deloitte says its global survey of more than 11,000 business and HR leaders, as well as interviews with executives from leading organisations, shows fundamental change is underway.
However, only 23% of Australian respondents say social responsibility is a top priority reflected in their corporate strategy. More than half (53%) say it is not a focus for them.
But demand for change is is there. Millennials in Australia are increasingly demanding that the companies they work for demonstrate social responsibility, says Deloitte.
The survey found 86% of millennials think that business success should be measured in terms of more than just financial performance.
The global trend means businesses now need to incorporate external trends, perspectives, and voices by maintaining positive relationships, not just with customers and employees, but also with local communities, regulators, and a variety of other stakeholders.
And doing so is critical to maintaining an organisation’s reputation — attracting, retaining, and engaging critical workers, and cultivating loyalty among customers.
Increasingly people look to companies to lead change. Globally, trust in business is greater than that of governments. The 2018 Edelman Trust Barometer reported that people place 52% trust in business “to do what is right” compared to just 43% in government.
“Society’s expectations of business are changing,” says David Brown, Deloitte Human Capital Leader.
“The focus is now clearly on business’ role in society as a driver of change, just look at the role they played in the marriage equality debate in Australia late last year.
“Social capital is just as important as – and inextricably linked to – human, financial and physical capital. Companies’ reputation, relevance, and bottom-lines increasingly hinge on their ability to act as good citizens and influence pressing public issues.”
The business focus is shifting to stronger relationships with employees, customers and communities.
“This year’s report is a wake-up call for organisations to look beyond their own four walls, cultivate these relationships in a meaningful way and reimagine their approach to their workforce – and their broader role in society — if they want to succeed,” he says.
The report also found that 90% of Australian businesses jointly ranked a connected workplace and C-suite collaboration as their top priorities to prepare for the future.
Yet only 38% and 43% respectively indicated a readiness to tackle these challenges.
“Australian businesses are clearly prioritising connectivity and collaboration but the scale of the challenge and the pace at which change is occurring is perhaps making businesses feel underprepared,” says Brown.
“Being disconnected geographically from the rest of the world can instill a need and necessity to find ways of connecting socially, the importance of which has now filtered through to the workplace.
“We’re seeing communication tools traditionally used for social purposes being embraced in the workplace and the lines between personal and business identities blurring.”
Survey respondents, both in Australia and globally, overwhelmingly point to the importance of collaboration among leaders, in the form of what is termed the symphonic C-suite, to tackle complex issues.
“To thrive in the future of work, organisations must be powered by networks of teams, but our research highlights that the C-suite has yet to evolve into a collaborative force,” says Brown.
“A lack of C-suite integration is the number one thing holding companies back from effectively tackling today’s human capital challenges.”
According to the global survey results, in companies where C-suite executives regularly collaborate, their businesses are 34% more likely to be growing faster than companies whose leadership operates in siloes. However, despite this potential advantage, 73% of survey respondents globally say their executives rarely, if ever, work together on projects and strategic initiatives.
Conversely, Australian C-suite leaders report that they are confident about collaboration among executives, reporting a higher rate of daily communication (61%) than their global counterparts (52%).
These Australian leaders also report they are increasingly dependent upon each other as an executive team (50%) with global leaders reporting less dependency (30%).
“Our research shows that those businesses able to integrate the C-suite to build a more social enterprise and create a differentiator to attract the right talent and drive loyalty will both lead the charge and sustain long-term growth,” says Brown.