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The Rise of the Social Enterprise 2018 Deloitte Global Human Capital Trends the Rise of the Social Enterprise

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The Rise of the Social Enterprise 2018 Deloitte Global Human Capital Trends the Rise of the Social Enterprise The rise of the social enterprise 2018 Deloitte Global Human Capital Trends The rise of the social enterprise Experience Deloitte’s Global Human Capital Trends like never before. Access the new HC Trends app featuring exclusive content. Deloitte’s Human Capital professionals leverage research, analytics, and industry insights to help design and execute the HR, talent, leadership, organization, and change programs that enable business performance through people performance. Visit the Human Capital area of www.deloitte. com to learn more. COVER AND CHAPTER ILLUSTRATIONS BY TRACI DABERKO 2018 Deloitte Global Human Capital Trends CONTENTS INTRODUCTION: THE RISE OF THE SOCIAL ENTERPRISE | 2 THE SYMPHONIC C-SUITE: TEAMS LEADING TEAMS | 17 THE WORKFORCE ECOSYSTEM: MANAGING BEYOND THE ENTERPRISE | 25 NEW REWARDS: PERSONALIZED, AGILE AND HOLISTIC | 33 FROM CAREERS TO EXPERIENCES: NEW PATHWAYS | 41 THE LONGEVITY DIVIDEND: WORK IN AN ERA OF 100-YEAR LIVES | 49 CITIZENSHIP AND SOCIAL IMPACT: SOCIETY HOLDS THE MIRROR | 57 WELL-BEING: A STRATEGY AND A RESPONSIBILITY | 65 AI, ROBOTICS, AND AUTOMATION: PUT HUMANS IN THE LOOP | 73 THE HYPER-CONNECTED WORKPLACE: WILL PRODUCTIVITY REIGN? | 81 PEOPLE DATA: HOW FAR IS TOO FAR? | 89 1 The rise of the social enterprise Introduction The rise of the social enterprise The 2018 Deloitte Global Human Capital Trends report showcases a profound shift facing business leaders worldwide: The rapid rise of what we call the social enterprise. This shift reflects the growing importance of social capital in shaping an organization’s purpose, guiding its relationships with stakeholders, and influencing its ultimate success or failure. N 2018, we are witnessing seismic changes in the relationships challenges business leaders to listen workforce, the workplace, and the technologies closely to constituents, act transparently with infor- Iused in the world of work. Based on this year’s mation, break down silos to enhance collaboration, global survey of more than 11,000 business and HR and build trust, credibility, and consistency through leaders, as well as interviews with executives from their actions. This is not a matter of altruism: Doing some of today’s leading organizations, we believe so is critical to maintaining an organization’s repu- that a fundamental change is underway. Organiza- tation; to attracting, retaining, and engaging critical tions are no longer assessed based only on tradition- workers; and to cultivating loyalty among customers. al metrics such as financial performance, or even the quality of their products or services. Rather, organizations today are increasingly judged on the basis of their relationships with their workers, their WHAT IS A SOCIAL ENTERPRISE? customers, and their communities, as well as their impact on society at large—transforming them from A social enterprise is an organization whose business enterprises into social enterprises. mission combines revenue growth and profit- making with the need to respect and support In many ways, social capital is achieving a new- its environment and stakeholder network. This found status next to financial and physical capital in includes listening to, investing in, and actively value. In a recent survey, for instance, 65 percent of managing the trends that are shaping today’s CEOs rated “inclusive growth” as a top-three strate- world. It is an organization that shoulders gic concern, more than three times greater than the its responsibility to be a good citizen (both proportion citing “shareholder value.”1 Today, suc- inside and outside the organization), serving cessful businesses must incorporate external trends, as a role model for its peers and promoting a perspectives, and voices by maintaining positive high degree of collaboration at every level of relationships, not just with customers and employ- the organization. ees, but also with local communities, regulators, and a variety of other stakeholders. Building these 2 2018 Deloitte Global Human Capital Trends Figure . The evolution of the social enterprise Ecosste External focus Increased engageent Social with external enterprise actors Increased Traditional collaboration LEVEL OF EXTERNAL FOCUS organiation and internal integration Enterprise Internal focus Functional Sphonic Siloed operating LEVEL OF COLLABORATION “Network of teams model AND INTERNAL AGILITY operating model Source Deloitte Global Human Capital Trends survey, 2018. Deloitte Insights deloitte.coinsights In past Global Human Capital Trends reports, Despite the economic recovery the world has seen we have noted the movement of many organizations since 2008, many people feel frustrated that finan- toward a “network of teams” operating model that cial gains have failed to improve individuals’ lives, aims to enable greater collaboration and internal address social problems, support political stability, agility.2 Now, this movement has been joined by the or mitigate technology’s unintended consequences. growing shift from an internal, enterprise focus to People today have less trust in their political and an external, ecosystem one (figure 1). Organizations social institutions than they have in years; many ex- on the leading edge of both of these changes em- pect business leaders to fill the gap. body our concept of the social enterprise: an organi- This point was made this year by BlackRock zation that is alert enough to sense, and responsive chief executive Laurence Fink. In his annual let- enough to accommodate, the gamut of stakeholder ter to CEOs, Fink noted that people are increas- expectations and demands. ingly “turning to the private sector and asking that companies respond to broader societal challenges” and demanding that organizations “serve a social The last decade: Building purpose.”3 Fink stated that shareholders, includ- toward today’s tipping point ing BlackRock itself, are now evaluating companies based on this standard. A New York Times report Why has this shift occurred? We believe that it suggested that the letter could be a “watershed mo- is driven by social, economic, and political chang- ment on Wall Street” that raises questions about es that have grown since the global financial crisis. “the very nature of capitalism.”4 3 The rise of the social enterprise Among the many factors contributing to the rise ness to fill the void on critical issues such as income of the social enterprise, we see three powerful mac- inequality, health care, diversity, and cybersecurity ro forces driving the urgency of this change. to help make the world more equal and fair. First, the power of the individual is grow- This expectation is placing immense pressure ing, with millennials at the forefront. For the on companies, but it is also creating opportunities. first time in mature markets, young people believe Organizations that engage with people and demon- that their lives will be worse than their parents’— strate that they are worthy of trust are burnishing and they are actively questioning the core premises their reputation, winning allies, and influencing or of corporate behavior and the economic and social supplanting traditional public policy mechanisms. principles that guide it.5 Among this group, social CEOs such as Amazon’s Jeff Bezos and Salesforce’s capital plays an outsized role in where they work Marc Benioff have an unprecedented ability to ac- and what they buy, and 86 percent of millennials tivate their companies for the good of society.10 think that business success should be measured in Consider the organization jointly created by Ama- terms of more than just zon, Berkshire Hathaway, financial performance.6 and JP Morgan Chase to Millennials comprise a lower health care costs majority of the work- for employees—tackling force in many countries, an issue that government and their power will like- People today have less cannot solve on its own, ly grow over time. trust in their political while also promising to This shift in power deliver business ben- to the individual is be- and social institutions efits.11 On the other hand, ing propelled by today’s companies that appear hyper-connected world, than they have in years; aloof, tone-deaf, or dis- which enables people to many expect business engaged face harsh head- track information about lines, negative attention companies and their leaders to fill the gap. on social media, and products, express their tough questions from a opinions to a wide audi- range of stakeholders. ence, and sign onto so- Third, technologi- cial movements, globally cal change is having and in real time. Back in 2015, we called this trend unforeseen impacts on society even as it toward greater transparency “the naked organiza- creates massive opportunities to achieve tion”;7 in 2018, individuals know and expect even sustainable, inclusive growth. Advances in ar- more from companies than they did three short tificial intelligence (AI) and new communications years ago. technologies are fundamentally changing how work Second, businesses are being expected to gets done, who does it, and how it influences soci- fill a widening leadership vacuum in society. ety.12 For instance, machine learning was not in the Across the globe, people trust business more than mainstream three years ago. Today, it is simultane- government. The 2018 Edelman Trust Barometer ously one of IT’s hottest areas—and a source of tre- reported that people worldwide place 52 percent mendous anxiety about potential job losses. People trust in business “to do what is right,” versus just increasingly realize that
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