Guest Post

As the world celebrated New Year’s recently, I can imagine a resolution on the minds of many business executives: bring greater purpose to work in 2019.

Across every dimension of the economy, there is a growing movement to integrate business strategy and social purpose. Investors are now measuring environmental and social impacts alongside financial returns. Companies are developing new products with the simultaneous goals of creating shareholder and societal value. And consumers are increasingly expressing their values through their buying decisions.

Indeed, our colleagues at Deloitte recently published a report on the rise of social purpose in business, indicating that 77% of business leaders now see “social impact” as “important or very important” to their company strategy.

What is behind this rise in socially conscious business? And how do we accelerate the movement from here?

The Rise of Social Purpose in Business

Three influences are driving the private sector to do well and do good, together:

1. Top talent is demanding purpose at work.

The greatest driver of change in business today is coming from our economy’s most important ingredient: human capital. Top talent is demanding jobs where they can make a difference and make a living. More than nine in ten students in our business schools, according to a survey, now say they want to learn about social and environmental issues as a core part of their education. More than half the students in the survey said they seek to explicitly find a career in the private sector where they can make a difference. Indeed, a majority of students in the poll said they're even willing to take a 15% pay cut to find a company that aligns with their values.

Numerous theories exist for why this change in expectations is taking place, but I find the most convincing answer to be that the rising generation of talent is finding a new source of identity and meaning amidst the decline of traditional guideposts. The old saw in the U.S. is that people find their identity in “God, family, and country.” But that norm is quickly changing: one intergenerational survey found that millennials were about half as likely as their elders to rate religion and being American as an important part of their personal identity. At the same time, this generation has a greater connection between their identity and their career than ever before. As professional identity takes greater priority, employees are demanding that what they do every day for their careers aligns with their core values as people.

2. Business is viewed as better positioned to solve social challenges.

At the same time that talent wants to find purpose at work, business is emerging as the last best hope for solving urgent social challenges. In the U.S., business is now more “trusted” for information than government sources and news media. And it’s simultaneously viewed as more effective than government in leading change; in the minds of employees and consumers alike, this greater trust and effectiveness comes with a responsibility to take action.

3. Social media is forcing business to take a stand.

Alongside changing perceptions of the role of business in society, social media is holding business accountable in new ways. After the death of journalist Jamal Khashoggi, for example, Twitter lit up with news of which companies would still be sending CEOs to the so-called “Davos in the Dessert” summit in Saudi Arabia and which companies would be withdrawing. Companies could not be neutral; sending a leader to the summit would be seen by employees and customers alike as a failure to stand up to an authoritarian government's civil-rights abuses.

In this new social-media environment, many companies are even taking stands on controversial social issues. For decades, the conventional wisdom has been that CEOs and the companies they lead do not enter this territory. But that wisdom is quickly being replaced by a new reality where CEOs and companies are taking stands on issues that matter to their business, to their employees, and to their consumers.

Investors are still making sense of whether this new trend is good for the bottom line. In the three months immediately following its Colin Kaepernick ad, Nike saw a sales increase of 10%. Meanwhile, Dick's Sporting Goods saw a 3% decline in same-store sales following its more restricted approach to gun sales after the Parkland school shootings. But the sporting-goods chain's CEO Ed Stack has been unwavering amidst this decline. “I don’t really care what the financial implication is,” he said, because it was the right thing to do.

What Comes Next: Changing Business Education

All signs point to the rise of social purpose in business accelerating in the years ahead. Early studies of Generation Z indicate even greater commitment to integrating purpose into their careers. Meanwhile, the greatest challenges of our time, from climate change to poverty, require greater business involvement—not less—in designing social solutions.

But a key challenge is that businesses do not currently have the talent they need to fully deliver on their social purpose; only half of companies currently say they are “ready or very ready” to execute on their citizenship and social impact vision.

At Loyola, where I teach business ethics, we see this gap in talent as a charge to design new educational programs to prepare executives of the future. We aim to equip them with the full toolkit to lead business for good. Last fall, we gathered business school deans from across the U.S. to meet with Chicago’s corporate leaders and collectively identified a need to be even more intentional in business school-curriculum around preparing students to simultaneously solve for business and social value.

Energized by that conversation, we are developing new educational programming in our MBA program at Loyola to equip purpose-driven professionals with the skills, values, and networks to do well and do good in their careers.

We see this focus on marrying profit and purpose in business education as just the beginning of developing the business leadership of the future. As the private sector continues to move toward a tipping point where purpose is a “must have” for all businesses, we see a future where all business education is about achieving environmental, social, and financial goals, together.

Seth Green is the founding director of the Baumhart Center, an interdisciplinary center at Loyola University Chicago that equips executives and students with the business tools to accelerate social impact.

The Power Gap Among Labor Unions: Why Some Have New Strength–and Others Don’t

As the United Auto Workers set up picket lines last week outside of plants for General Motors, Ford and Stellantis (maker of Chrysler, Jeep and Dodge), there was a sense of familiarity, of economic history repeating itself. In times past, the UAW would roll up to a contract negotiation with all eight cylinders of its union engine roaring. There were work stoppages, but when the Big Three controlled 80% of the market, the car companies had a lot of sales to lose in enduring a long strike, so they had some willingness to compromise.Since the 1980s, though, the UAW–not to mention the United Steelworkers and other large industrial unions–have been squeezed by the global labor arbitrage that shifted work to Asia. They’ve become fewer in number, less powerful politically and forced into waves of givebacks to keep their jobs. Most galling, for the UAW, was the adoption of a two-tiered wage system—a lower rate for new hires, vs. legacy workers. The scoresheet has not been kind to labor; its share of national income has been in a long decline, one that has accelerated in this century.This year, the wealth and power pendulum has started moving the other way. The post-pandemic reordering of the global supply chain that enriched some U.S. industries–think greedflation–has given the UAW, and a few other unions the chance to muscle up again. They’re seizing the moment to demand a share of that new wealth. This is a workforce that has done everything asked of it during the pandemic to meet the needs of corporations and their customers.Which is making labor more militant, more willing to hit the bricks for better pay and benefits. We're going to see this soon in Las Vegas, where the Culinary Workers Union, 50,000 of them, may strike the major hotels and casinos if there’s no new contract. Las Vegas has been recording record month after record month of revenues since the end of the pandemic, and the unions quite reasonably expect to get a piece of those winnings. Some corporations have acknowledged as much, with the Teamsters winning a big contract with UPS. Likewise, American Airlines just settled with its pilots on a new contract in August, providing a 46% increase in compensation, as “revenge travel” hasn’t slowed. Why wouldn’t you settle with workers if your airline is filling every seat, and facing a pilot shortage over the next decade? Pilots are United and Delta have also settled. That’s the benefit of a healthy economy, when labor and management each have more to gain than lose.The economy can’t solve every labor issue. In Hollywood, both the Writers Guild of America and the Screen Actors Guild have been on strike for months against the movie studios and the streaming companies. And in warehouses and coffeeshops nationwide, Amazon and Starbucks are fighting bitterly against determined unionization efforts. Every labor negotiation rests on the extent of the common interests among the two parties. In the UPS negotiation, each side had too much to lose to take a strike. Shippers had already been moving their UPS business to other carriers as talks dragged on. And with drivers now earning more than $100,000 annually in some places, the urge to walk rather than deliver wasn’t strong. So UPS and the Teamsters settled and each can claim victory. This is the same Teamsters union that refused yet more givebacks with foundering Yellow Freight, and allowed the company to go under. Yellow had been in the red for years and the union could not see a way forward. With demand for truckers still high, and Yellow’s assets going on the block, there will still options for its drivers.For the auto companies, business is great but business is also changing rapidly–and that’s where the mutual interests are parting. Detroit has been able to sell every pickup truck it can build, for instance. These are the industry’s most profitable vehicles. How much of that business is worth risking? But the switch from internal combustion engines to EVs has introduced a host of new technologies that is reordering the workplace, and the unions are wary. Transmission plants get replaced by battery plants, for example, and the automakers are placing some of those plant in less union-friendly geographies in the South. The UAW has seen this movie before, when robotics came on the scene and eventually displaced a wide swath of jobs.Yet neither side is playing hardball, it seems. The unions are picketing at three selected plants–one from each automaker, a switch from the days when it would focus attention on one company. That includes a Stellantis factory in Ohio, for instance, that makes the ever-popular Jeep. The union calls it a “standup strike.” The idea is to get the message across without crippling the entire industry. GM CEO Mary Barra, a lifelong GMer and the daughter of a GM engineer, has tried to keep the temperature low: “If you’re asking for more than the company made, I think that’s not a good position,” Barra said, but added, “I think we’re in a good position to get this done.” The gap remains wide, but that was also the case with UPS and the Teamsters.Technology is also a feature in the Hollywood strike by creatives against the studios and streamers. The actors and writers see AI technology being used to deprive them of earnings and intellectual property. Talks stalled, but there is still talk. Warner Bros. Discovery CEO David Zaslav tried to spread optimism, telling analysts: “We are just hopeful as a company, and I am very hopeful, that we can get that resolved. If we can get it resolved soon, then the long-term impact will be minimized.” But that optimism sounded a bit scripted, given that Warner has been willing to take a $500 million hit to earnings during the strike, and Zazlov’s lavish pay packet, $285 million over the last two years, has further impassioned workers over lavish media CEO pay.The dissonance could not be any greater in the case of Starbucks and Amazon, whose founders still exert a powerful influence on labor relations, leading to conflict. For Starbucks former CEO and chairman Howard Schultz, the battle with unions has been particularly difficult. Schultz, who grew up working class in Brooklyn, is a progressive. Starbucks pays well and has good benefits. He cares about the workforce, so he can’t understand why workers would want a union. He believes that he’s in the right position to know what they need, moreso than a union. But his view is from the top down. From that vantage point, understanding the workers’ point is view is difficult–very few business owners can do it. Henry Ford had the same stance–and his hired goons’ violent confrontation with union organizers was a turning point in UAW history.At Amazon, founder Jeff Bezos built a company by being a control freak over costs and operations and trained his senior managers that way. Unions represent a threat to that control mantra. And threatens to bring higher costs. Workers, for their part, see themselves as dehumanized labor inputs within Amazon’s system, not people. So the fight goes on, in both companies.The capital vs. labor issues this year are unique to their time–an economic situation unlike we’ve ever experienced and rapid technological developments that are rearranging traditional conflicts. The path to labor peace in the auto industry, then, may require these two old adversaries to bring more imagination and innovation to the negotiating table. Bill Saporito is an editor at large at Inc. magazine. Previously, worked as an assistant managing editor at Time magazine and as a senior editor at Fortune.(Featured photo: United Auto Workers members walk the picket line at the Ford Michigan Assembly Plant in Wayne, Mich., on Sept. 18, 2023. AP Photo/Paul Sancya)

The Myth of the ‘Woke’ Corporation

“Whatever you do, lead with your values,” Apple CEO Tim Cook recently told the graduating class at Gallaudet University. Well, that leaves it wide open, doesn’t it? In Apple’s case, what values allow it to manufacture in China, a country that has crushed democracy in Hong Kong and violated the rights of millions of Uighurs on the mainland? Yet iPhones today are allowing citizens and soldiers of Ukraine to use technology to fend off the invading Russian hordes. Or consider McDonald’s, which closed some 850 stores in Russia, laying off 62,000 people. This is the same McDonald’s that is being accused by investor Carl Icahn of being complicit in ruthless treatment of pigs by vendors who supply meat for McRib sandwiches. Then there’s Tesla CEO Elon Musk, who claimed to eschew politics before tweeting, disingenuously, that he was becoming a Republican because the Democrats are the party of hate, notwithstanding the GOP affiliation with the clearly hateful and racist “replacement theory” that motivated an 18-year old domestic terrorist in Buffalo, NY, to murder 10 people. That’s not going to play well among California’s liberal Tesla owners—who now have many more EV models to choose from. And there’s no more emotional and potentially divisive topic than abortion rights. The issue is so fraught that the public relations firm Zeno advised its corporate clients to do zero–to run and hide. No, you don’t. Businesses that don’t confront such issues face the possibility that a relatively small group of white, male, you-don’t-even-have-to-say conservative legislators and regulators in states such as Texas and Oklahoma are going to dictate national policy. Which is why companies as diverse as Citigroup and Chobani quickly revised their benefits programs to include travel for out-of-state abortion services. If young people today want to work for a company that has a purpose, then defining that purpose in all its forms–political, social, environmental, racial and even local–has never been more complex for corporate America. Likewise for investors and investment companies. BlackRock has drawn fire from both conservatives for its stance on environmental, social and governance (ESG) issues, and from liberals for its investments in China. In Florida, the Walt Disney Co. first tried to escape the debate over that state’s so called “Don’t Say Gay” bill. But Mouse House employees, particularly its creatives, were having none of it. The company then broadcasted its dissent against the gay-bashing legislation. Disney’s support of its own LGBTQ community, in turn, made it a target for Florida’s reactionary governor Ron DeSantis, who orchestrated legislation that stripped Disney of its special tax and government status in the two Florida counties where Disney World operates. (Also potentially leaving the state on the hook for hundreds of millions of dollars of bond payments.) Then DeSantis vetoed funding for a training facility for the Tampa Bay Rays in part because the team spoke up against gun violence. Apparently, the governor favors it. But Disney’s customers voted Mickey over Ron—that is, they continue to flock to the Orlando resort and watch Disney movies. Those include the thousands of LGBTQ customers who show up, and are welcomed, for unofficial Gay Days at the resorts. A Dick’s Sporting Goods store in Michigan, one of more than 700 in the U.S. In 2018, the company halted sales of assault weapons in all of its stores (Photo by RiverNorthPhotography/iStock by Getty Images) The fact that a Republican governor would try to harm a Fortune 100 company that employs more than 70,000 Floridians underscores how divisive the politics have become. The fact that consumers have largely ignored DeSantis shows that they respect thoughtful corporate decisionmaking about controversial issues. And well they should. Yet another mass shooting event in Texas, in Uvalde, once again focused attention on assault rifles. But it was following a mass shooting at Parkland high school in Florida, in 2018, when Dick’s Sporting Goods CEO Ed Stack pulled assault rifles from the company’s stores and halted gun sales to anyone under 21 years of age. That decision would cost the company some $250 million in sales initially. But Stack, a gun owner, had had enough. He told me: “After Parkland, I said, ‘We’re done. We’re not selling these guns, we’re not selling high-capacity magazines, we’re not going to sell any guns to anyone who’s under 21.’ That was it. We’re never going to change our mind on any of that.” Sales would eventually rebound because most Americans want to ban assault rifles, too. Walmart, no paragon of wokeness, made a similar call on behalf of its customers. This is a company that is now making a big investment in health care, because it can see the great need, and opportunity, among its customers and employees. To that end, Walmart recently banned cigarette sales in many of its stores even though the company, via a subsidiary, was once the largest tobacco wholesaler in the country. Selling death while at the same time trying to prevent death is a mixed marketing message at best, so Walmart made a choice: your health matters. We’ve already watched the Trump Administration play divide and conquer with corporate America in its defenestration of the Environmental Protection Agency and the trashing of pollution regulations. In clashing with the state of California over its stringent automobile standards—Trump demanded lower fuel efficiency—the administration forced automakers to choose sides. GM, Fiat Chrysler and Toyota, conservative by nature, backed into Trump’s garage. Honda, Volkswagen, BMW and Ford (with the support of executive chair Bill Ford), boldly backed California. These firms were already moving swiftly to expand their EV offerings; siding with California enhances their EV cred and offers a market advantage by doing so. Ford’s F-150 Lighting EV pickup, for instance, is already a breakout star. Corporations need to look a decade ahead to stay ahead. Any company that wants to be aligned with the future can’t avoid addressing human rights, animal rights, government actors, health care, sustainability and the environment. Not that the path is straightforward or even logical. Consider that Texas (once again) bars state retirement and pension funds from investing in companies that want to reduce fossil fuel consumption. Also consider that Texas is the nation’s leading producer of wind energy. If you build wind turbines, doesn’t that make you anti-fossil fuel by definition? Texas pols can deny climate change, but those denials will provide little protection when a monster hurricane–one of the consequences–wipes out Galveston. (Again. In 1900, more than 6,000 people died in such a storm.) And even if Galveston is spared, homeowners in coastal areas that haven’t prepared for extreme weather tied to a warming climate are already seeing sharp increases in flood insurance, if they can buy it at all. Which is to say that even if the free market doesn’t have a conscience, it tends to be rational. The defeat of two ExxonMobil board nominees last year by an activist hedge fund that criticized its strategy around climate change didn’t suddenly transform a hydrocarbon giant into an alternative-energy outfit. But that outcome did demonstrate that ExxonMobil wasn’t as focused on the future of clean energy as it might be—and that’s a market risk shareholders don’t care to face. ExxonMobil’s investors were indeed following their own values–while at the same time addressing shareholder value. That shouldn’t be such a rare event in corporate America. And if the graduates at Gallaudet follow the advice of Apple CEO Cook, it won’t be. Bill Saporito is an editor at large at Inc. magazine.

Why Social Purpose in Business Will Rise in Importance in 2019

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