New leaders are finding alternate forms of capital, demanding new structures and resisting arbitrary corporate norms that have existed for decades.
Today’s young business leaders are poised to outperform their more established counterparts – and that’s not just the usual energy and naivety of youth talking.
Today’s young leaders are emerging at a time when forces have converged to broaden people’s expectations of business. This generation contains some of the savviest and most connected consumers in history.
Many of them have seen their parents work in, and potentially be let go from, uninspiring business environments. They’ve grown up in an era when corporate scandal was frequent and corporate responsibility became a department.
On the other hand, they’ve also seen the extraordinary rise of social enterprises and start-ups that answer the question: “What problem are we trying to solve?” long before they ask: “What’s the next big money maker?”
And now they’re setting the bar higher.
“ Today’s young business leaders are poised to outperform their more established counterparts. ”
The big differentiator will be that successful leaders of the future will tap into the extraordinary value and competitive advantage that comes when their companies’ missions – their core reasons for being – draw others in.
They will hard-wire their operations to work effectively with others across society to deliver those missions and leverage resources in entirely new ways – and outperform the market as a result.
Here’s what the new generation of CEOs will do differently.
“ Tomorrow’s leaders are savvy enough to see profit as the end, not the means. ”
For the next generation of game-changers, the payday (and what a payday it will be) grows out of setting ambitious missions that people actually care about. It seems so obvious, doesn’t it?
After all, a mission statement is your most important declaration to the world about why your business even exists. But take a look at most company missions and you’ll find things like relevance and purpose woefully lacking.
Here are three red flags to look out for:
- Uninspired mission statements are chronically narcissistic. This business of “we’re going to be the #1” or “the industry leader” raises exactly one question: besides shareholders, who cares? Many up-and-coming leaders are starting to better understand that if consumers, employees, communities and even governments don’t care about their company’s mission, they’ll be in dire straits fairly quickly.
- Uninspired mission statements focus on the business model. A business model is not a mission and it never will be. Worse yet, elevating the business model to the level of mission makes a company far less capable of pivoting when market changes demand that their model evolves. Our future CEOs have grown up in an environment where the most agile businesses have been best at weathering storms.
- Uninspired mission statements talk about how a company will behave. I’m reminded of a retail chain that seeks to “please customers and treat employees well”. Since when did the bare minimum of behaviour constitute a mission?
Successful leaders of the future will understand the bigger picture. They will recognize the interplay between society’s most pressing issues and the ability of their industries and companies to simultaneously solve those issues and thrive. They will recognize that major problems, left unchecked, will eventually block their business objectives.
Think about it. Nike won’t survive if the world continues to become less physically active. Neither will ESPN. Banks lose relevance if the majority of a population can barely afford everyday expenses. An energy company doesn’t stand a chance if it runs out of product. The theory holds true for pretty much any company of any size in any industry.
Put simply, future leaders will embrace missions that are visionary and describe what their companies will deliver to the world. And those missions will matter to a much larger group than just shareholders.
2. Young leaders see untapped value that’s there for the taking
“ Missions that create shared purpose expand available market opportunity.”
First, they’ll need to learn how to play really well with others.
Corporations are famous for creating and then operating inside safe and controlled corporate bubbles. The new vanguard is about to burst that bubble.
Truly ambitious missions require other people’s participation – governments, non-profits, academics, to name just a few. Future leaders will need to define new ways to work with these groups more authentically and systemically than typical efforts seen today.
If they get this right, our young leaders will start to experience a level of broad-based support from unlikely actors who actually want their companies to win. It will create a tailwind experienced by very few in the corporate sector so far, and illuminate the ridiculous amount of untapped value being left on the table today.
When a more broadly supported corporate mission is delivered authentically and consistently, companies can realize surprising cost savings and fewer barriers to business.
The PR crises, risk-mitigation headaches, employee-retention or productivity issues that drain valuable dollars – they can all dissipate dramatically, freeing up resources for innovation and more strategic reinvestment.
Imagine an employee base so proud of what they are working towards that they consistently over-deliver with great products, services and efficiency savings. If your own employees or others want you to win because you stand for something worth fighting for, they’ll do whatever they can to help you.
Finally, missions that create shared purpose expand available market opportunity. Driving towards a mission that means something (and delivering on it) inherently expands the size of the pie versus an exhaustive and expensive effort to expand the size of an arbitrary slice.
Because these companies are fundamentally solving a bigger problem, there’s a bigger portion of the population to innovate for and a broader base of business opportunities to expand into legitimately over time.
There are some established companies we can look to for inspiration.
Take Google, for example. Its mission is to “organize the world’s information and make it universally accessible and useful”.
Democratizing access to information everywhere? That’s world-changing. And it shows up in a ton of different ways, from emergency alerts that are the product of government partnerships to a re-imagined ISP experience (currently being tested in a few US cities) that provides connection speeds that are faster, cheaper and more reliable than anything people have experienced before.
In an industry fraught with political challenges and sensitivities, Google is finding new ways to work across sectors. The result is expanded market opportunity and a roster of essential and valuable new supporters.
Indeed, those who lead the way will have big challenges pioneering how to get things done across the traditionally well-defined tri-sector territories. But they’ll also be poised to extract significant business value (and profitability) that has been left on the table for a very long time.
3. Young leaders will stay off the Titanic
“ While the next generation may be pre-wired for this, real shifts will occur as the most established leaders of today make this seismic shift. ”
You could argue that deeply embedded corporate norms and a very powerful establishment will continue to stand in the way of progress, but I don’t buy it. We’re now talking about a century-old corporate financing legacy system whose time has come and gone.
Young leaders don’t have to put up with that, and many of the world’s bravest CEOs today are already showing the way.
As an example, take a look at Tesla’s eight-year, infinite-mile warranty. This was a bold move in a world where three-year, 36,000-mile warranties have long been the norm.
Then Tesla did the unthinkable and extended its warranty to existing owners as well. CEO Elon Musk addressed investors and acknowledged the likely negative impact on short-term earnings. And then he went ahead and extended the warranties anyway.
That’s a clear signal that Tesla puts the interests of its customers and faith in its product ahead of any arbitrary, short-term KPI. It bucks the system in a big way, and it will also pay off far more in the long run.
A Generation of Change
“ Today, we’re seeing new leaders buck the system entirely.”
I can’t wait to see the group of revolutionaries who have the courage to go after missions that are bigger than themselves in the mainstream corporate world.
And really, while the next generation may be pre-wired for this, real shifts will occur as the most established leaders of today make this seismic shift.
These leaders will chart new territory for sure: resisting the creation of internal corporate bubbles and rewiring organizations for authentic multisector relationships – possible because they will lead business missions that unite, rather than separate.
From what I’ve seen so far, plenty of young people (and even a few current CEOs) have the guts to take this on. And if that’s the sense of entitlement this generation is supposed to have, then I say bring it on.
This article first appeared on World Economic Forum and was republished with permission.