The Evolution of Business: A Leader’s Need for Improved Skills
I have been exposed to many different types of concepts during my graduate studies. Among the most relevant is the emergence of hybrid organizations into the marketplace. Generally, a hybrid organization has a profit-making component, as well as a social welfare component. These two companies have historically had a difficult time finding favor, as one of the two warring perspectives ultimately won out. When the mission of the company was divided by two different mindsets, the environment was even more difficult for managers who ended up at odds with employees about the company’s mission.
Hiring for a balanced workplace to accommodate a balanced mindset proved difficult. In the last few years, as COVID-19 has gained steam, companies have noticed an increase in skillsets for employees and managers who now see the benefit of being more caring. This is due to growing globalization and a more integrated and interconnected global marketplace. There will soon be an end to antiquated views of profiting off others and their replacement by a greater dependence and integration of businesses from around the world.
Recently, I learned the term “logic” as part of Organization Design.
“A logic means a person’s basic assumptions, values, and beliefs that he or she thinks should guide an organization’s behavior. These Values and beliefs give meaning to people’s daily lives (Daft, 2020).”
As I have been reflecting on the role that logic serves in an organization and its effectiveness in leading teams through this new era of business, this is something that is of particular interest to me. In order for logic to be effective, it must be understood and brought to light so that teams can be organized effectively.
- There is commercial logic, on the one hand. Business schools have traditionally taught this, and it has been a key part of the business community for many years. This is also the most common logic held by professionals. This is also what is behind the shareholder vs. stakeholder debate.
- Social welfare is another consideration. This is where we see sales and revenues as tools and mechanisms for responding to the needs of society/community. Profits, products, and services are all secondary and are used to accomplish the social goals the company wishes to accomplish.
Hybrid businesses achieve goals in both camps, so there’s nothing wrong with holding one over the other.
Two results have been introduced that align perfectly with the hybrid organizational model. One is the introduction of Benefit Corporations. Benefit corporations are now recognized by 21 states and the District of Columbia as for-profit entities that specify their legally chartered goals as positive social and environmental impacts (Daft, 2020). This is great news for both the commercial and social welfare logic. A fuller-scope perspective can be attained when organizations are shaped into B-Corps and focus on both sides of the coin. Benefit corporations have an advantage over conventional corporations in that they can choose to prioritize social or environmental goals over financial gain for shareholders without fear of shareholder lawsuits (Daft, 2020).
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Second, hybrid organizations have the potential to challenge traditional views on Corporate Social Responsibility (CSR). In a previous article, I discussed the differences between shareholder and stakeholder theories. There is a constant tension between CSR and shareholder interests. While CSR has become a popular topic of conversation, business leaders continue to push for others to take more responsibility for social concerns that may be solved through responsible business practices.
Sir Richard Branson’s co-founding of the B Team is an excellent example. B Team members are dedicated business leaders whose primary goal is to impact society at large. This development is crucial as it lays the foundation for more hybrid organizations to emerge. This movement forces businesses to pay attention to social concerns, creating a new narrative for corporate social responsibility.
A LEADERS NEED FOR NEW SKILLS
For this reason, leaders need new skills that can adapt to a rapidly changing environment. Businesses, like organisms, keep growing and evolving. Additionally, an antiquated way of managing people will not work when the need for leadership is also present. It’s even changing the way we talk about management.
“You manage things, you lead people. We went overboard on management and forgot about leadership.” — Grace Murray Hopper
This quote is just one more example of how leadership needs to strategically adapt to the growing and dynamic environment. This is not to say that all managers are bad leaders or all managers are leaders who don’t lead. There are plenty of managers who are not only excellent leaders but who speak up for their teams as well. As the first to say “thank you” to those who have been dutifully serving their teams and making an impact, you are the reason business has begun to evolve and become more unified. Keep going and continue to make an impact!