There are moments in history when everything seems to accelerate. Ten years in one. 2020 is such a moment.
All over the world, long-term trends have raced forwards and deep issues have surfaced, often pretty brutally.
In the turbulent late 1700s, William Blake said, “What is now proved was once only imagined.” The techno-evangelists must feel the same, along with climate change activists and human rights campaigners, as well as the neo-Keynesian monetary policy folk.
We have learned a lot this year. Business has shown an agility it could not have imagined. None of our crisis workshops modeled this one. Leadership has stood to the fore in its support of staff and other crucial stakeholders. Companies have accomplished things we wouldn’t have thought possible. Leadership has shown it really matters.
Trust in the corporate sector has risen in line with its resilience. In particular the banking and capital markets sector have been, to date, resilient. The markets have been volatile but the financial sector has worked in response to problems not as the cause of them.
All of those changes painfully put into place following the last crash, particularly in banking, have passed a test. We can only hope we apply equally well the learnings from this crisis.
It is now widely accepted that the full economic and social impact has only just begun and behind that the recognition of impact on the personal lives of people everywhere. Among our clients, leadership teams in all sectors have been incredibly focused not just on organizational challenges but also on the well-being and mental health of their people at every level. In many cases, it has a knock-on effect to their families and local communities.
The effort to create a more cohesive and caring culture internally has massively accelerated, even when a record level of jobs is being lost. The value of addressing these issues openly and honestly has, in our experience, never been higher, never more widely recognized. As ever, trade-offs have to be made. It is the nature of life and business. But the people issues weigh heavier than ever in decision making not as a result of union pressure or legislation, or even solely good performance and other reasons of business. A pandemic lays bare the impulse to serve humanity. At Brunswick, we are engaged in significantly more work in these areas and, no less important, work that is more substantive and impactful.
This pandemic has surfaced many deep, longer term issues. The depth of systemic inequity has been laid bare. The true depth of this shows up very poignantly in the COVID death statistics.
Racial inequity and gender inequity have accelerated onto board agendas in previously unimaginable ways and we do not see those movements declining. Actually, the increasingly impressive response of the leaders showing real leadership will demonstrate what is possible and make it easier for others to follow. Though the noise of a new media world makes analysis difficult, the message is clear, words are not enough. Action is what matters and that is what will build and protect reputation.
This is also true in the other mega-trend that we see accelerating rapidly, climate change. Those voices early in 2020 who thought this pandemic would put climate on the back burner are long gone. If anything, climate change concerns have been intensified by a powerful mix of concern about health and the environment. Governments have so far failed to deliver meaningful change and in response to this the recognition of the role of business is growing. External pressures are growing too, but the debate is shifting away from business as part of the problem towards business as the chief source of solutions.
Transitioning business models can be difficult and take time. Tech disruption has shown us that. One big difference in transitioning to a lower carbon world is that there is now far greater support from the investment community, even activism. Investors are increasingly looking for leadership to embrace change and get ahead of the curve rather than go slow into it, at ever-increasing risk.
Investor ratings on those embracing versus those avoiding necessary change are rarely as divergent as between Tesla and the old-line auto industry, but there are underlying investor trends that signal the direction. Also worth considering, a failure to fulfill promises to wider stakeholders can carry a more immediate risk for leaders than might a financial stumble, given the longer-term judgment of shareholders.