The New Business Mindset
Thursday 26th January 2012 - 9:00am - 10:00am
Thursday 26 January
This session was conducted under the Chatham House Rule.
What critical societal, stakeholder and regulatory concerns are reshaping the mindset of business?
Dimensions to be addressed:
- Aligning short-term interests and long-term goals
- Incentivizing responsible conduct
- Understanding the changing nature of corporate ownership
- Declining public trust in leaders signals social changes that are making many traditional leadership approaches obsolete.
- Core values are a key to aligning a corporate leadership strategy.
- Maximizing shareholder value is no longer enough by itself, since external factors can have a direct impact on a company’s competitiveness and its ultimate profitability.
- The younger generation coming on line is very socially conscious and committed to change, effectively challenging the current generation of leaders to keep up.
The environment that chief executive officers are expected to operate in is undergoing dramatic change. A few years ago, a food company might have prospered by offering pleasant tasting meals at an affordable price. Today, the consumer wants to know the chemical content of packaging, the company’s labour practices and its impact on the environment.
Modern leaders need to be especially sensitive to changing attitudes in the real world as well as to the mindset of their employees. Increasing share value is still an objective, but it does not constitute much of a value. Starting off the day by believing that one’s work will save lives or change the world is much more of an incentive to produce impressive results than the goal of simply making more money. Shareholder value follows once the company has created staff commitment and a shared vision.
Leaders need to develop and visibly stand by their core values. The company’s strategy will then align itself along the value line, creating an environment conducive to internal harmony. Developing an effective value system depends on the leader being in touch with all constituencies that affect the company, from customers to employees. Creating an environment in which employees can express and remain true to their personal values greatly increases loyalty and commitment to the company’s goals.
A major goal for any chief executive officer is to attract the best available talent. The new generation graduating from leading schools is both extremely smart and highly socially motivated. For many of these new graduates, the impact of a company on society is more of an attraction than the size of the starting salary. The one thing that the new generation is certain about is that it wants to create change. The leadership challenge is to integrate the best ideas emerging from that desire into a functional organizational structure.
This summary was written by William Dowell. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.
Copyright 2012 World Economic Forum
This material may be copied, photocopied, duplicated and shared, provided that it is clearly attributed to the World Economic Forum. This material may not be used for commercial purposes.
Keywords: World Economic Forum Annual Meeting 2012, Davos, Klaus Schwab, great transformations, new models, economics, leadership and innovation models, values, shareholder value, talent, goals, objectives
Shumeet Banerji, Chief Executive Officer, Booz & Company, USA
Kendall J. Powell, Chairman and Chief Executive Officer, General Mills, USA
Azim H. Premji, Chairman, Wipro, India
Ruth J. Simmons, President, Brown University, USA
Daniel Vasella, Chairman of the Board, Novartis, Switzerland
William W. George, Professor of Management Practice, Harvard Business School, Harvard University, USA; Foundation Board USA Member
- Daniel Vasella
- Shumeet Banerji
Kendall J. Powell
Chairman and Chief Executive Officer, General Mills, USA
1976, BA, Harvard; 1979, MBA, Stanford. Since 1979, with General Mills: marketing and general manage...
- Ruth J. Simmons
Azim H. Premji
Chairman, Wipro, India
Graduate in Electrical Engineering, Stanford University. Since late 1960s, at the helm of Wipro; cur...
William W. George
Professor of Management Practice, Harvard Business School, Harvard University, USA
BSc in Industrial Engineering, Georgia Tech; MBA and Baker Scholar, Harvard Univ. Formerly: 10 years...