Deborah Westphal has supported hundreds of leaders, since 1999, by pushing them to challenge biases, ignite ideas, and build successful businesses. She is a consultant and former CEO of Toffler Associates. Her clients have included top minds and leaders of governments and Fortune 100 companies.
Below, Deborah shares 5 key insights from her new book, Convergence: Technology, Business, and the Human-Centric Future (available now from Amazon). Listen to the audio version—read by Deborah herself—in the Next Big Idea App.
1. Humanity is changing business.
Many people say that we are in the middle of a tech revolution. Companies spend billions advancing technology because they believe that it will be the driving force for change in our world. However, at the core of the revolution, there’s a human movement that reflects our need to connect, belong, and matter.
More than half of the world’s population has access to the internet. More than three billion people actively use social media. The boundless scale and reach of social networks has shifted the paradigm of citizen expression.
Consider Greta Thunberg. In a matter of months, she went from an independent protest for climate change to addressing world leaders at Davos to leading #schoolstrike. An estimated 1.4 million inspired young people in thousands of towns and cities, across over a hundred countries, stepped out of schools and into the streets to add their voices to hers.
“Technology may be pervasive and powerful, but ultimately a social revolution will have the greatest, most formative impact on our businesses.”
Information and communication technologies have opened up spaces of power, influence, and association to new configurations of actors. Technology may be pervasive and powerful, but ultimately a social revolution will have the greatest, most formative impact on our businesses.
Technology is a tool. Humans are the energy. Technology allows humans to connect, communicate, and collaborate. The proof of its power is that it only takes one voice to expand our aperture and get traditional leaders to take note. This public action and systemic disruption creates social influence because it is human-driven and amplified by connectedness. Remember little Greta.
In large and small instances across the world every day, people are organizing and energizing movements. Using shared social platforms, people are finding one another and banding together to achieve shared objectives.
2. Forces of technology, humanity, and the purpose of business are diverging—it’s time to rebalance them.
Despite its power to connect us and give voice to people around the world, the forces of technology, people, and business purpose are imbalanced and diverging. It is happening all around us, so we have to make a choice. Either we recognize what is happening and work together to rebalance these forces, or we ignore them—at our peril. Most of today’s businesses were built to prioritize shareholder returns. That thinking is creating an imbalance with the communities in which they operate. As the primary reason for business is changing, it’s creating a gap in what we believe is the purpose of business.
“The shareholder model is no longer useful. It can’t set up an organization for success in the future.”
People are demanding businesses take a more active role in solving problems such as diversity and inclusion, inequality, and climate change. Influential financial institutions and advocacy groups are putting pressure on companies to take active steps to address these issues. With this new reality as the backdrop for business, the shareholder model is no longer useful. It can’t set up an organization for success in the future. To grow and scale a business, we must refocus our perspective on being human-centric.
We are seeing the beginning of this commitment. For example, members of the Business Roundtable have signed a declaration that the purpose of a corporation has changed. In its “Statement on the Purpose of a Corporation,” the signing CEO members declared that companies need to take a broader view of those they serve. They concurred that it is no longer enough to serve only shareholders. They must also deliver value to customers, employees, suppliers, and the communities where they operate.
As leaders, we must think through our role in addressing the challenges we face as societies and humanity. We must create a new model for delivering on profit and being responsible to the future.
3. The layers and silos that once provided tidy categories for behavior are coming down.
The old universal laws of business are no longer universal. We are moving away from models of business that emphasized stability, order, uniformity, and equilibrium. Those of us who excelled at managing these closed systems are feeling as if we are losing ground in the race to succeed. That is because we are.
This shift demands new models for business. The transformation process is hard and humbling. Several things must happen to make change for the new organization: first and foremost, understand the human system and how it takes precedence over all other systems, including our business systems. And know that there is a growing gap between what was expected from business and what is expected.
“We have to be willing and able to disrupt how and why decisions are made.”
Every day we are seeing new evidence to accelerate change. On any given day, we hear leaders voicing concern that something just isn’t right. Growing numbers of guests on mainstream business outlets from Bloomberg to BBC to Squawk Box and others are asking hard questions about business purpose and focus. They’re challenging their peers to answer: What are we giving back? How are we solving the problems in our communities? How will we be able to continue to operate among the shifting sentiment of customers? And what are we doing to achieve net zero carbon emissions?
We also see unprecedented action being taken to force change. An activist hedge fund successfully replaced existing members on the ExxonMobil’s board of directors, hoping that new members can push the corporation to take climate change more seriously. We have to be willing and able to disrupt how and why decisions are made. This disruption must happen in every meeting, every day, until the new model takes hold and our organizations can satisfy a new purpose.
4. There is an urgent necessity to orient business and technology with a human-centric perspective.
Success is defined by accomplishment of an aim. As the stated purpose changes, so must we change our decision-making processes and priorities. Instead of making decisions based on what’s best for shareholders, we must also address what is best for our communities, our environment, and our future. If we are doing things today that have negative impacts on our future markets, we’re not going to have a sustainable business.
As an example, water is important in almost every company that is manufacturing anything–electronics, pharmaceuticals, food, clothing–you name it. Besides air, water is the most important thing to sustain human life. If we destroy our water sources, businesses won’t be able to make things, but more importantly, people will die. You may not get rewarded directly for having a water management strategy, but no short-term gain is going to be worth what you lose long term. We must rebalance our decisions for today—and tomorrow.
[pullqutoe]“Instead of making decisions based on what’s best for shareholders, we must also address what is best for our communities, our environment, and our future.”[/pullquote]
5. A new type of leader has emerged. Be one of them.
Effective leadership cultivates a deep understanding of who we are as individuals. Knowing how we make decisions and why we make them the way we do is critical. Recognizing our individual biases and belief systems is foundational. Nurturing the ability to determine when these parts of ourselves get in the way of our capacity to lead from a place of transparency is required. Effective leadership leads with authenticity, vulnerability, and courage.
Together we must adjust our way of thinking about the purpose of business. Let’s move away from believing the primary purpose of business is to maximize shareholder profit. We must open the aperture of our thinking about business as being human-centric. To do these things, we must reexamine and update organizational designs that worked in the past, along with the behaviors that guided those approaches. This will be hard. These ideas and beliefs are integral to who we are as professionals. We have imprinted thoughts and behaviors through time and experience, and they are deeply set. Taking the step towards disruptive, creative thinking will level us up as leaders for the future.
Today’s leaders must think through their role in addressing broader worldly issues by making the shift from a shareholder mindset to a stakeholder mindset. The result is we clean up the environment and address human suffering.
To listen to the audio version read by Deborah Westphal, download the Next Big Idea App today: