Leaders of 21st century enterprises face a rapidly changing context for global business and society. At stake is their ability to manage successfully their relationships with customers, investors, partners, employees and other key audiences and stakeholders. Indeed, corporations are increasingly engaging in fierce competition over their very identities. A new report and a survey of Chief Executive Officers commissioned by the Arthur W. Page Society examine the drivers and implications of these shifts. The report proposes a set of strategic options for CEOs and other “C-suite” executives to consider in helping the enterprise successfully respond to the new realities.
Businesses and institutions today are facing rapidly changing landscape: a) the emergence of a new digital information commons; b) the reality of a global economy; and c) the appearance and empowerment of myriad new stakeholders. Together, these forces have created a global playing field of unprecedented transparency and radically democratized access to information production, dissemination and consumption. They are overturning the corporation’s traditional ability to segment audiences and messages and to manage how it wishes to be perceived. Today the corporation’s relationship with one constituency is readily visible to all constituencies, who are multiplying in number and growing in sophistication. Further, some of these new players are not legitimate stakeholders at all, but rather simply adversarial or even malicious. At the same time, powerful new possibilities are being opened up for the corporation to reach genuine stakeholders, to advance its policy interests, to build its brand and enhance its reputation. In such an environment, the corporation that wants to establish a distinctive brand and achieve long-term success must, more than ever before, be grounded in a sure sense of what defines it - why it exists, what it stands for and what differentiates it in a marketplace of customers, investors and workers. Those definitions – call them values, principles, beliefs, mission, purpose or value proposition – must dictate consistent behavior and actions. In a word, authenticity will be the coin of the realm for successful corporations and for those who lead them. But when we describe the emerging business model as “the authentic enterprise,” two important caveats are necessary.
The first is that we are not suggesting that businesses of the past were somehow inauthentic. Rather, it is the general arena of judgment and differentiation that has changed – and changed fundamentally. That in turn requires a corresponding change in how the corporation operates. Its actions and reputation, which used to be safeguarded by a cadre of professionalized functions, are now the responsibility of everyone in the enterprise. What used to be controlled within the company’s “four walls” is now spread across multiple partners, communities and individuals around the globe.
The second caveat is that not all enterprises, groups or individuals will seek this kind of authenticity. Indeed, the very forces creating so much new opportunity are opening it up to everyone – including those who have no interest in building institutions, but only in short-term gains. The proliferation of ways to play today’s radically fluid and open financial markets – from arbitrage, to hedge funds, to short-selling, to outright fraud of many stripes – is only expanding. Some enterprises will choose to retreat from this conundrum entirely. The growth of private equity today may be testament to that. But for those corporations that remain public and that aspire to build trusted brands, sustainable marketplace success and community reputation, the imperative of authenticity will inevitably grow in importance.
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