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How are businesses of all sizes responding to the changing values of our time? At Grayling, we asked 500 senior business decision-makers across Europe about their organisation’s purpose. The results indicate a shift away from the economist Milton Friedman’s vision of business existing solely to increase profits towards one more akin to the benevolent philanthropy of Victorian industrialists. What does this mean for your organisation in the era of ‘New Collectivism’? Tom Nutt, Grayling’s Head of Corporate, UK & Europe, shares his thoughts.
In 1970, Milton Friedman stated that businesses’ main social responsibility was to increase profits. This economic thinking peaked arguably in the 1980s with a ‘greed is good’ culture that was captured so well by the 1987 film, Wall Street.
Fast-forward to the present in a world slowly emerging from a disruptive year of lockdowns and we’ve learned that the pandemic has accelerated movements that were already active, with racism, gender equality and the environment as key themes. Younger generations are rejecting the status quo and spending their money with brands with a purpose beyond profit.
What business leaders tell us about purpose
At Grayling, we wanted to see how business leaders defined their organisation’s purpose in a post-pandemic world. In early 2021, we canvassed 500 senior decision-makers from across Europe*. We found that just a third (32%) of senior decision-makers across Europe believe that the sole responsibility of business is to maximise profits without breaking the law.
However, the majority (63%) believe that – alongside making a profit – businesses have a collective responsibility to the societies they operate in. Just 17% of micro-business owners believe that making a profit is the sole objective of business. We outlined our findings in our New Collectivism Report.
The pandemic has highlighted several societal and economic factors that were already in play, and three in ten (29%) of business decision-makers that we surveyed say they expect communication around COVID-19 to limit conversations around sustainability during 2021. A much smaller number (14%) say they feel pressure from customers, consumers or governments to move more quickly on ethical issues than is possible at the moment.
A fast-changing dynamic is forcing a rethink
The demographics of business are changing. Younger, tech-native Generation X and Millennials are rising through the ranks into positions of power, and we can expect them to bring a new management style that includes a purpose beyond profit. At a political level, younger politicians in Finland and New Zealand are indicative of this move, supported by a new progressive administration in the White House.
A politically active younger generation, invested in social and environmental movements, are voting with their e-wallets by buying from companies whose ethics and purpose they align with. Young talent also wants to work for progressive employers, with competitive benefits beyond the salary. Businesses must keep up. They must find a purpose beyond profit and vocalise it in an authentic way, not with greenwashing or tokenism that can be called out in an instant on social media.
The nascent era of ‘New Collectivism’ is a huge opportunity for organisations of all sizes to reassess their purpose and what kind of conversations they want to lead going into the future. This new direction must filter throughout the organisation from a cultural perspective and will impact everything from the products and services you offer, to your messaging, your human resources policies and your recruitment strategy.
If this is a challenge you recognise within your organisation, Grayling can help. We provide a wide range of expert communications services across Europe, including public affairs, public relations and digital communications.
*Study conducted of 500 senior business decision makers in international businesses across micro (1-9 employees, small (10-49 employees), medium (50-249 employees) and large corporations (250+ employees). Field study conducted 3-8 Feb 2021 by Opinium Research.