It used to be that businesses were judged almost exclusively on financial performance: Were they profitable? Did they generate returns for investors? Now, we’re seeing a whole new set of expectations for business, including the demand to play a deeper role in society.
We call this “the rise of the social enterprise.” Now, organizations must understand and respond in the context of broader society, their workplace and the evolving employment ecosystem, including employees, gig workers and other partners. In turn, we at Deloitte have recognized the need for different support in adapting to these disruptions and managing organizational and workforce performance in new ways.
Over the past 12 to 18 months, we’ve seen an unprecedented shift from the business enterprise to the social enterprise, driven by numerous converging factors:
• Rising power of the individual, as people raise their voices (and their likes, clicks and shares) in support of their beliefs. Individuals today not only have a very clear message but also a platform to share that message on social media.
• Mindfulness about the adverse impacts of technology on things like data privacy and jobs. These impacts have awakened society to the need for organizations to be cautious about how they manage technology.
• Powerful social platforms, which have put more pressure on organizations to respond to society’s biggest issues without waiting for the government to address them. The workforce has expectations that CEOs will take a stand on social issues, and do so publicly.
Of course, social enterprises must still manage financial performance, but they also have new responsibilities to actively listen to, respond to and collaborate with all of their stakeholders, both internal and external. They need to be more involved with their workforce ecosystem, which comprises not only salaried employees but a whole gamut of contingent workers. And they need to recognize — and respect —that individuals have more power than they’ve ever had.
All of this means organizations have to think about people (or “human capital,” in organizational terms) as the means to power their performance moving forward.
Organizations currently manage human capital in a very siloed and linear way: It’s typically seen as HR’s issue. But, for all the reasons above, human capital is an enterprise issue. Leaders of finance, IT, the business, marketing and risk, along with HR, all need to work together and operate as a symphonic C-suite to optimize the value of human capital. And they need a different sort of support.
In order to manage performance and purpose in the social enterprise, I recommend an approach that includes three components:
1. Sense the environment.
Organizations must start to leverage research, market sensing and focused analytics in order to know, not guess, the challenges and opportunities in the internal and external environment. Using insights discovered through market sensing and research, leaders can better understand the forces, recognizing that in the social enterprise, the workforce is in the driver’s seat. Having confidence in what is going on around and within the organization helps leadership pick the right path to navigate the complexity of the environment.
For example, say a large retail firm is moving to implement artificial intelligence and robotic process automation in its global service centers. To do so, it will need to sense the market for things like technological updates and progress in the automation space, public opinion on these technologies, political or business sector news updates that could affect the transformation, and changing expectations in the workforce. The internal insights help the organization understand what capabilities are needed to respond to these opportunities and to begin to compose the workforce needed to rise to the challenge. This sensing and intelligence-gathering helps the firm stay a step ahead in making the best possible business and workforce decisions.
2. Supplement the workforce.
The dynamics of the social enterprise require organizations to build capabilities quickly and often in new areas that may not have been part of their DNA in the past. Organizations need to start aggressively supplementing their capabilities with new workforces like gig workers, and also engage with external ecosystem partners they can “lease” hard to build capabilities from.
3. Take action.
At a time when leaders are very tuned into workforce expectations and the power of the social enterprise, human capital technology is increasingly important. To make the transition from business enterprise to social enterprise, organizations must leverage their human capital more effectively. Imagine if you had the data and insights to better manage your assets to balance your human capital balance sheet. By having clarity into internal and external factors affecting your business and your people, you could design a “simply irresistible organization” by understanding, foreseeing and intervening on issues that are important.