This week the World Economic Forum's meeting in Davos will give leaders from politics, business, and civil society the chance to connect on critical issues. This year's theme and focus for the forum, "The New Global Context," represents a critical issue for the business landscape and should resonate with attendees as we debate the huge transformations resetting how we operate.
Of the many exciting changes facing all of us, the most important has to be how we collectively advance society in the new global context. This particular undertaking is not being driven by the few thousand people meeting in the Swiss Alps, but by talent around the world. Take millennials, the world's future and, in some cases, current leaders. In a recent Deloitte Touche Tohmatsu (Deloitte Global) survey of nearly 8,000 young professionals from 29 countries, most said business is too focused on a narrow agenda of profit and product, rather than on improving society by addressing the purpose and people of business.
Simply put, they believe the business agenda needs a reset. I agree, and here are three ways I think we can do better business in 2015:
Identify and instill purpose throughout our organizations. Six in 10 of the millennials we surveyed globally said a "sense of purpose" was part of the reason they chose to work for their current employers. Employers they admire include Johnson & Johnson, whose affordable and accessible products improve health around the world; and Philips, whose mission is to improve the lives of three billion people by 2025 through its own health-care solutions, in addition to its lighting solutions that make neighborhoods safer and reduce municipal carbon footprints. And it's not just millennials — surveys have shown that all generations feel it's more important to work for a company that makes a positive impact on the world. In the end, a sense of purpose doesn't just positively impact society, it's been shown to make business stronger. It can unlock enormous individual potential, tremendous collective effort, and creative energy.
Rome wasn't built in a day, nor by a single real estate developer. We need to always think beyond borders, embrace partnering across sectors, and abandon any notions that our organizations are just fine on their own. We have to know who we're competing with and looking beyond our own backyards in order to sustain long-term growth. Global competitiveness is shifting toward emerging markets, and talent in those markets is exceedingly ambitious. In 2013, emerging-market companies comprised roughly a quarter of Fortune's Global 500 list. A year later, more than one-fifth of the companies in the top 50 came from emerging markets. Germany's Merck recognizes this; it's working with India's Dr. Reddy's Laboratories to co-develop several biosimilar cancer treatments. Dr. Reddy's is leading early product development, while Merck will lead manufacturing, late-stage product development, and commercialization in mature and predefined emerging markets.
Diversity is just a buzzword unless you bring it to life. Diversity of thought drives progress and needs to be cultivated throughout our organizations, especially at the top. In our survey of millennials, only 21 percent of women rated their leadership skills as "strong." I believe a confidence gap exists among women because they don't see other women in leadership roles. That needs to change. According to Credit Suisse research, companies with senior teams comprised of more than 15 percent women had a return on equity of 14.7 percent in 2013 versus 9.7 percent when teams had fewer than 10 percent women. At Deloitte Global, our chairman has been working to diversify our board. To do so, in 2014 the male CEOs of the Canada, France, UK, and U.S. member firms, gave up their board seats to alternates, all of whom in fiscal year 2014 are women. The resulting dialogue and impact has been dramatic. Diversity of thought leads to better solutions — period. The business community has talked for years about creating enabling opportunities for high-potential, diverse leaders within organizations. It's time for less talk and more action.
Purpose, collaboration, and diversity of thought all demand a greater sense of urgency from business. Effective leaders have been resetting their agendas for years, assessing what's working, what isn't, and what can be done better. It's how top organizations improve profit margins. But, leaders need to extend that thinking beyond profits to impact. Those who continually challenge their own agendas, and are not afraid to reset how and why they operate, will continue to drive long-term growth for their organizations.
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This is the new global context, one which makes me wish I had another 38 years in business.
Commentary by Barry Salzberg,Global CEO of Deloitte Touche Tohmatsu Ltd.