Why Converging Crises are Prompting Businesses to Examine the Social Contract 

Digital and societal disruptions of the last decade, accentuated by the events of 2020, are forcing organizations to reckon with the fact that normal wasn’t working. The confluence of crises– pandemic, climate, economic, racial, technological, and trust– is forcing businesses to recalibrate their operating models while confronting rising tensions. This is not merely an exercise in “purpose-building,” as has been en vogue in recent years, this requires a fundamental rethinking of their “social contract,” the relationship and responsibilities organizations have with all stakeholders (customers, employees, their communities)– not just shareholders.

2020 was the inflection point. According to Edelman, half of people globally believe business is doing poorly or completely failing at putting people before profits during the pandemic. But the unravelling of the implicit value exchange started long before the pandemic upended the economy, shifting millions into remote working environments, and laying bare society’s ugliest and most deadly inequities.

As tensions compound, digital underlies emergent risks and opportunities. In recent years, questions of digital investment and transformation have been increasingly saddled with questions of power vs. stewardship, speed vs. ethics, and profits vs. environmental and societal impact. Emerging technologies are only accelerating these questions, not only in cases of AI displacing jobs, widening the digital divide, or environmental degradation, but with the digitization of “identity” and “wellness” via biometrics, sensors, wearables, voice and facial recognition (and beyond). Questions of data ownership, business models, consent, safeguards, and value(s) smolder as organizations amass, analyze, and monetize ever more behavioral, biometric, and other data. Simultaneously, digital tools underlie several emergent, more equitable and participatory structures, such as distributed governance platforms, crowd equity models, and community-driven solutions.

Today’s tensions will be the differentiation for tomorrow’s leaders. While 2020 upended our lives and assumptions and accelerated several digital trends, it prompted countless organizations to step up, fill the void, and take responsibility:

  • Supporting their employees with expanded mental health and benefits offerings
  • Investing in security, safety, inclusion programs
  • Offering free or discounted services to communities in need
  • Pivoting business, production, distribution models in support of societal needs
  • Enacting new or relaxing existing policies in support of safety and health
  • Participating in open data models to accelerate research and innovation
  • Accelerating community equity models, mutual aid, and digital peer-to-peer networks

Global crises call for global solutions. What these efforts have in common is not merely about crisis response; it is about prioritizing “good” for stakeholders, while exploring alternative (often digital), more collaborative and inclusive economic models. And it may well be laying the foundation for how today’s innovators will steward value at much greater scale tomorrow.

 

 

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