The Six New Rules of Business
The rules of business are changing dramatically. Success is no longer defined by the balance sheet. Reputation, trust and other intangibles drive business value, employees give voice to risk and competitive advantage, and culture is king.
“Business as usual” is not a viable option. From technology to supply chains, social impact to environmental limits, the landscape for business and the definition of success have both been upended. Income inequality is rife, social discord is high, and the demand for business to create real value for all its stakeholders has become a loud and rallying cry. Many of the forces that define these new rules of business are already in play, and business, arguably the most powerful force in the world, is in desperate need of a new operating manual.
In The Six New Rules of Business: Creating Value in a Changing World (Berrett-Koehler; January 12, 2021) Judy Samuelson, VP at the Aspen Institute, and founder and executive director of The Aspen Institute’s Business and Society Program, describes the profound shifts in attitudes and mindsets that are redefining our notions of what constitutes business success, unraveling the old rules that focused solely on profits, shareholder mindset, and the bottom line, that led to corporate greed and short-termism, and offers a new set of rules, that enable executives and leaders to think and manage differently, by embracing a new definition of business success.
“Business,” she writes, “is not moral or immoral—good or bad like a person; business decisions have good or bad results. And the decisions are a function of the rules and incentives and metrics that influence behavior in the executive suite and on the shop floor. They are also influenced by leaders, boardrooms, what we teach in business schools—and what we assign value to. Internet-powered transparency, a more powerful worker voice, the decline in importance of capital, and the complexity of global supply chains in the face of planetary limits all define the new landscape. The challenges we face now are just as complex as recovering from the Great Depression and transitioning from the war economy were—in significant ways, more so.
Through real life examples and case studies tied to the work and research of the Business & Society Program, Judy outlines six new rules that are already in play, to showcase how business is changing today—and identify what is needed to succeed in tomorrow’s economic and social landscape including:
This is a pivotal moment—on climate; preparing for mass recalibration of work in an era of artificial intelligence; opening up an economy to face economic exclusion, racism, and inequality—a persistent blind spot in our economic evolution—and each of these challenges require business at the table with clarity of purpose and long-term commitment to the health of the commons.
“Inaction is not a choice,” Samuelson writes. “It’s time to pick up the pace of change. We all, in fact, have a role to play, as investors, as consumers, as employees, as citizens. As the journalist and social activist Dorothy Day was known to say, ‘No one has a right to sit down and feel hopeless. There is too much work to do.’”