What is good business? The answer to that question will drive the foundations of the business in the future.
The conversation was ongoing. In 2019, for example, the European Union passed a law to ensure full Environmental, Social and Governance (ESG) disclosures by listed companies and investment funds. Goldman Sachs has even announced that it will stop funding IPOs for companies with boards of all male directors. In August 2019, one of the largest business groups in the United States (US), Business Roundtable, replaced its long line of “important stocks” urging companies to focus on environmental welfare and employees, as well as their profit margins.
The epidemic has intensified this discussion of the nature, role and purpose of the business. This problem has provided a consistent view of how businesses actually behave – the level of scrutiny applied to businesses (even business leaders) has never been seen. And rightly so. Business is a useful metaphor for the capitalist himself; the foundation of our society, where we build value and how, and how we define success.
As part of our 75th anniversary celebrations, Mahindra Group presented a public discussion of what is a good business. The results clearly show the changing feelings about the role of the business, and what really constitutes a good deal, or a job, or an investment. According to Mahindra’s Good Business Study, which includes more than 2,000 Indian citizens, 62.42% of respondents identified the community as the most important part of their business vision. From the staff’s point of view, about half (49.35%) respondents believe that equality of opportunity, diversity, flexibility and innovation are the highest qualities of a good employer. Such new definitions of what it means to be a good business are expressed even in the choice of investment. 70.27% of respondents said they would not invest in a business that they did not consider really good.
Two factors have influenced these changing perceptions of good business over the past decade.
First, the emergence and activism of the millennial generation (usually, those between the ages of 25 and 35). According to Deloitte’s most recent Millennial Survey, more than a quarter of a thousand years will choose not to buy from the organization because of its position on political issues, and 29% will do the same, based on the company’s comments or behavior. 70% of millennials expect their employers to focus on public or mechanized issues. No other generation has had such an impact on business performance, employee experience, and consumer expectations. They represent one of the biggest drivers of good business over the past decade.
This is evident in our Good Business study. 45.27% of respondents for the millennium associate good business with non-financial metrics such as workplace and environmental diversity. In contrast, only 39.22% of those over the age of 46 used the same metrics.
Second, the most important thing for many traditional and contemporary businesses, including ours, is to ensure that they are truly fair. For example, reducing the environmental impact on the production and use of products, ensuring clear and fulfilling employee jobs, and equal communication with investors and the wider community are factors that contribute to companies making them the Great Places to Work list.
Some of our own businesses are exemplary: Susten, for example, brings clean energy to some of India’s most remote regions; Mahindra Waste To Energy Solutions Ltd converts waste into Bio-CNG fertilizer; while Mahindra Electric Mobility Ltd was a pioneer in electrical transport. Together, these businesses are putting the change into a viable business, and they are already making more than half a billion dollars each year. Such businesses serve the purpose of our Group – empowering people to rise up and achieve the best. In fact, this summarizes what good business means to us.
What does this suggest for the next ten years?
One, according to demographics, will be interesting to see how today’s millennials retain their influence, as future executives, entrepreneurs and business leaders.
Secondly, I am particularly interested in his successor, Generation Z, who is under 25 years old. This generation of consumers will increase their spending per capita by more than 70% over the next five years. How will they put their “good” business ideas into the way they use, operate, and invest?
Some recent studies describe them as even more devoted to our planet and other forms of morality. A staggering 92% said they cared about social and environmental problems, and 89% were concerned about the health of our planet. Significantly, 94% believe that companies should help deal with such urgent problems; this is a much higher percentage than their predecessors of thousands of years. Such statistics provide a clue – and hopefully – of a positive business situation for the next decade.
Finally, the existing business alignment approach to this new set of specimens that has shown over the past decade will be gradually replaced by businesses that have been fundamentally made better – better in terms of construction. Businesses will define their existence – their products, production methods, labor relations and society – in terms of their broader role in society. Here, technology will play a very important role – not only in the thinking of products and services, but also in how it is produced and delivered to consumers.