Big business needs to step up and take the reins of leadership from the politicians

 
Atif Sheikh
House Of Representatives Passes New Anti Terrorism Bill
There's a power vacuum in politics, can business leaders fill it? (Source: Getty)

I wanna be the leader
I wanna be the leader
Can I be the leader?
Can I? I can?
Promise? Promise?
Yippee I'm the leader
I'm the leader


OK what shall we do?

Roger McGough did not know how prescient his poem was. The days of Churchill, Thatcher and Mandela are gone. Whether you agreed with them or not, they led with clarity and conviction, inspiring millions to follow their vision. Today’s political leaders, by contrast, struggle to answer a basic question – why do you want to be President or Prime Minister?

A leadership vacuum has opened up, and we are left with either career politicians or populists. Neither offer a positive way forward.

Strangely, in this era of institutional scandal and outrageous executive pay, the answer may lie in big business.


While many companies are berated for their tax-dodging, data-careless ways, there are some that are revered by their customers for the difference that they make. Think of Ikea or Tesla. They demonstrate a new kind of leadership, bringing clarity of purpose and an unwavering commitment to delivering it. This in turn has earned their customers’ respect and loyalty.

As politicians trip up, will business leaders step up and assume ownership for shaping a better world?

At Davos last month, business leaders jostled with politicians to set the world’s agenda. Among them was Alan Jope, new chief executive at Unilever, who emphasised the importance of creating a company that makes “society and the planet a little better”.

He also spoke of putting purpose before profit – shifting focus to products with a clear social impact to drive customer loyalty and better results.

But profit and purpose must be equal to ensure that a firm’s social mission is sustainable. Finding this balance is a tightrope that many fail to walk. So why is it so tricky to get right?

Emotional vs commercial

It’s not either or – it’s both and. Purpose should inspire strategy and create innovation potential, leading to new commercial opportunities. Too often, businesses veer one way or the other – emotional connection with no business substance, or overly functional with no galvanising call to action.

The result is that no one does anything differently, and at worst they become cynical about the whole idea of their business acting with purpose.

Not enough stretch

A purpose should be almost unattainable in order to constantly motivate new thinking, better performance, and greater courage. Too often firms talk to the sector they’re already in (too close), or speak of grandiose ambitions that don’t feel real (too far). It’s critical to get the level of stretch right, so that people believe that what they’re doing every day will make a real difference.

No real sacrifice

Purpose is about more than adopting some social cause. It takes commitment, and involves personal and commercial sacrifice.

In 2018, Patagonia founder Yvon Chouinard (who traditionally avoids politics) announced that his firm had accrued an additional $10m in profits as a result of Donald Trump’s “irresponsible tax cut”. Instead of holding onto the money, Chouinard gave all $10m to grassroots groups fighting climate change.

A company’s embrace of purpose creates real hope – and a transformational opportunity. It is time for business leaders not just to heed Alan Jope’s rallying cry, but to answer it with yet greater ambition. This is about companies playing the leadership role that they can and must – and making that their path to profit.

Purpose done right will force businesses to innovate with the vigour required to make big leaps forward for their customers – and generate sustainable profits.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.