Tomorrow’s global company should expand its view of success and redefine it in terms of lasting positive impacts for business, society and the environment.
Having redefined success, tomorrow’s global business leaders should stand firmly behind their convictions and use them as a basis for their business strategy and decision making.
Internal processes, especially measurement and reporting and external communications with all stakeholders, need to be consistent with this view of success.
At the turn of the last century Henry Ford quite deliberately defined success in terms that were broader than the accepted view of profit at that time. He said: “I hold that it is better to sell a large number of cars at a reasonably small profit. I hold this because it enables a larger number of people to buy and enjoy the use of a car and because it gives a larger number of men employment at good wages. Those are aims I have in life.” 22
Ford addressed people’s needs for mobility and skilled employment and in so doing built a great company. By paying above average wages and selling cars at small margins, to the dismay of his peers, he created a new business model and defined success in a new way. He was convinced that a commitment to serving customers’ needs and behaving ethically would result in healthy profits and his approach was vindicated as 15 million Model T Fords were manufactured and sold.
Tomorrow’s global company needs to apply similar thinking, but in the vastly more challenging setting of today’s changing world.
Without losing its focus on profitability, it needs to be creative in expanding its view of success and redefine it in terms of lasting positive impacts for the business, society and the environment.
Once success is redefined in a wider, longer-term context, the leaders of tomorrow’s global company should hold to this vision without losing sight of the need to maintain the support of shareholders in the short-term through the generation of cash for investment and dividends.
Their view of success must be widely and openly communicated. Companies should seek to win support for it by engaging investors and others, and should make sure that all their decision making processes, especially measurement and reporting, are consistent with this view of success. This is not easy to achieve and takes both time and commitment at all levels from the board downwards.
Open and honest communication are key to gaining the support of all stakeholders, inside and beyond the organisation, and building the trust required to work towards a more broadly defined vision of success. Internally, an organisation’s values are a vital part of this process and this is discussed in the next section.
One critical factor holding companies back from defining success in a broader way is the pressure - sometimes real and sometimes perceived – to deliver short-term results to please impatient investors. However, we believe that the market will reward those who set and explain long-term goals in building sustainable businesses of lasting benefit to society.
In the financial markets, growing numbers of players are attaching importance to social and environmental impacts and support a wider definition of success. This should encourage companies to be much bolder in describing long-term strategy and explaining their short and medium-term performance in that context.