Go Boldly: We Can Build Companies That Care

Welcome back to the #GoBoldly series, where I share learnings and observations from my conversations with chief executives and experts on how senior leaders can guide their organizations into a post-Covid world.

When William Hesketh Lever founded Lever Brothers, his mission was to eradicate disease through hygiene. When Henri Nestlé founded the company that bears his name, he wanted to reduce infant mortality through nutrition. Many other influential companies got started with a higher purpose in mind, but over the years that purpose has sadly become detached from corporate strategy and focus.

Today, we live in a challenging time. But I am inspired that the Covid-19 pandemic and rising awareness of racial inequity is spurring so many executives to acknowledge the higher and purposeful contributions that are our responsibility—and privilege—as corporate leaders. It comes up in almost every CEO conversation I have.

As we guide our companies, we can be more compassionate toward our planet and with one another, including our employees, customers, suppliers and the communities where we do business.

When the Covid-19 pandemic arrived, it found leaders struggling just to keep their companies operating. With businesses stalled in many industries, threatening millions of jobs, executives faced the need to protect their work forces despite plunging revenues. It also reordered priorities. It made CEOs more aware of the need to ensure safe working environments. And it brought some critical issues to the fore, such as the unequal health and financial impact on under-served populations and the widening divide between the haves and the have-nots around the world.

The World Economic Forum’s 2021 theme is slated to be “the Great Reset,” an urgent joint commitment to build the foundations for an economic and social system that will lead to a more fair, sustainable and resilient future. This comes as no surprise. As we began retooling our businesses for an uncertain future, growing awareness of racial inequity made it more important than ever to embrace our civic duty and to work for racial and social equity throughout the world. Our employees and customers were fighting for these causes; as powerful corporations, we could lend might to their efforts.

Most executives I know fully support these objectives and have made progress in their efforts. We also know that we need to be more action-oriented to create widespread and lasting change. We have demonstrated that we know how to deliver a financial impact. Now we need to show that we can create an equally powerful social impact. For many CEOs, this means making a big corporate shift from passive allyship in these causes to active engagement.

But this is by no means simple. We need to balance championing issues while also protecting and growing our businesses. Also, we will have to grapple with the challenge of maintaining momentum as active advocates for stakeholder causes, especially when the focus of social issues changes over time.

I think about managing through this complexity along three axes: waterfront (or frontier), depth and longitudinal choreography. 

The X-axis is what I refer to as the waterfront. It’s about understanding the huge and growing range of issues that have been brewing for years and the opportunities for embedding them into your business model. At Bain, we have built up a sustainability and corporate responsibility practice to help clients use a sustainability lens to guide their business decisions - everything from how they source materials to how they innovate new products. 

The Y-axis is the depth. Anything we do is the right thing to do, but we quickly need to determine how deep we can go in each area. In the past, the deepest vector was the environment. That is why so many companies are working so hard to reduce their carbon footprint, for example. As the scope expands beyond the environmental, to encompass a broad range of critical social and governance issues, it forces leaders to make trade-offs in timing.

The Z-axis is the choreography. After defining our priorities and the degree of change, we also need to establish the timing and sequencing—and governance to ensure progress. The fact is, people and organizations risk overload, even when it is for the greater good.

At Bain, we balance this by setting short-, medium- and long-term guideposts. Among our long-term commitments: establishing a Global Diversity, Equity and Inclusion (DEI) practice and governance board and coinvesting in EcoVadis, the leading provider of business sustainability ratings for global supply chains.

Every business I know is preparing for a future that will be nothing like the past. One of the ways it will be different is that purpose will be a key component of the corporate mandate. At Bain, our mission is to define a bold ambition with clients, then work together as one team to create such high levels of value that we set new standards of excellence for our industries. At our founding, that mission was framed as “economic value,” yet three years ago we broadened our impact aspiration, and removed the word economic. We wanted to emphasize that our purpose extends beyond helping our clients achieve financial success to enriching the greater good. 

The right thing to do is good for business. More than 70% of millennials now expect their employers to focus on societal or mission-driven problems, according to one survey. And 90% of consumers would switch to sustainable brands given equal price and quality.

The message is clear: Future winners are going to be more purpose-driven. What is just as obvious to me is that companies that fall behind in this critical dimension will fall behind overall.