Citizenship On The Rise: What This Means To Business and HR

New research (The Deloitte Millennial Survey) shows that global citizenship is on the rise, and this trend is directly impacting business leaders and HR practices around the world.

Here are the findings:  Millennials tend to see a threatening and unfair world, and they want to take an active role to help. Among 8,000 Millennials surveyed in 30 countries, 2/3 (64%) of those in developed countries believe they will be less off financially than their parents, and 69% believe they will be “less happy.” When asked what issues directly concern them, they cite quite a list, including war, terrorism, political tension, healthcare, hunger, and income inequality.

As they feel this stress, they also want to roll up their sleeves to help. 77% of Millennials are involved in a charity or “good cause,” 76% believe that business should be a positive force for social impact, and 88% believe business is a force for social change.

This, in a word, is the definition of citizenship.

Citizenship: the character of an individual viewed as a member of society; behavior in terms of the duties, obligations, and functions of a citizen: e.g. an award for good citizenship.

  • Dictionary.com, based on Oxford English Dictionary.

For business leaders, this represents an opportunity. Employees who want to get involved are taking time at work to discuss these issues (one study says they spend up to two hours a day reading about politics), and they want to take action. The CHRO of a large technology company told me her African-American employees were particularly concerned about #blacklivesmatter, for example, and wanted the company to take a support a movement on the topic.

While many business leaders are reluctant to take a stand on political issues, the cost of doing nothing is rising. Uber’s CEO Travis Kalanick was forced to step down from Donald Trump’s economic advisory council because citizens believed Uber was profiting from immigration chaos at airports. (The hashtag #deleteuber was responsible for more than 200,000 people deleting their Uber app.)

The important book Firms of Endearment, which was published in 2007, convincingly proves that in today’s citizen-driven marketplace, companies must compete for “share of heart,” not just “share of market.” Companies which define their mission to society like Whole Foods, Costco, Caterpillar, Wegmans, and others mentioned in the book have outperformed the S&P 500 by 8-fold over the last 20 years. These strategies are more important than ever today.

There are many ways companies and executives can support and practice citizenship. Companies can embrace policies that support a living wage, they can pay their fair share of taxes, and they can offer healthcare and other benefits to all employees at a reasonable cost. (Aetna’s CEO Mark Bertolini made the unilateral decision to improve working conditions in their call centers based entirely by focusing on “doing what’s right,” and the financial results were very positive.)

Part of citizenship is also embracing what is now called a growth mindset: seriously realizing that every employee and every person has the ability to learn, grow, and evolve. I recently met with a whole series of senior execs in the HR and L&D profession and every one of them is using the concept of growth mindset to rethink their people strategy.

As I talk with HR executives and business leaders around the world, I see evidence of this everywhere. Companies are redefining their brand with a focus on purpose, they are shifting from a focus on “markets” to a focus on “communities,” and they are trying to make products that are “worthy and esteemed,” not just “good.”

For HR professionals, there are some significant new things to think about:

  • Should your CEO speak out when employees are upset about a political decision or law that impacts their personal lives?
  • Should you encourage and support political activism at work?
  • Should you cover the costs of employees taking time off for political action and let them create position groups at work?
  • Should you take on issues like global warming, income inequality, minimum wage with a focus on society? Or simply look at them as expenses to be managed?

I believe we are in a period when Citizenship will make or break many brands. Companies that exploit customers with high prices, exploit employees with low wages and benefits, and appear opportunistic when politicians create controversial polices are likely to see their brand suffer heavily in the market. Sure you can try to stay quiet and avoid taking a strong position, but as the research shows, your employees have already decided they need to get involved.

As I’ve discussed this topic with CHROs and other business leaders over the last few weeks, I’ve realized that “being a good citizen” means more than doing good things. It means taking inclusion and diversity seriously, designing products that meet the needs of individuals and communities, giving employees an open environment at work, and acting as a transparent and authentic leader.

Fig 1: How Citizenship Changes Business and HR Strategies

Marc Benioff, CEO of Salesforce.com, for example, erased the problems of gender pay gap with a stroke of the pen, once he realized that women were repeatedly being underpaid. The company is known for its generosity in the community, giving employees up to 7 days off (VTO – Volunteer Time Off) each year.

Patagonia, a billion dollar outdoor apparel provider, has a policy for paying employees bail charges if they are politically active, and the company contributes 1% of its gross revenue to environmental protection every year.

A global consumer package goods company recently told me their new employee strategy is based on people having a unique “identity,” local to their community. This theme respects the global focus on nationalism, designed to focus on “local identity” instead of “global identity” among their employees and customers. Their view is that all employees (and customers) should be respected as local citizens, with passions and the need to express themselves as part of their career.

While the topic of corporate citizenship is not new, I believe it represents a major new theme in management thinking today. Consider the role model companies around us: more and more they act as global citizens and they empower their employees to do the same.

Fig 2: How Management Thinking Evolves, where Citizenship Fits

The World is Not Global, It’s Local

One final point on this topic. While the idea of being a “global citizen” is attractive, it turns out that citizenship is a very local thing. The Deloitte Millennial research, for example, found that while young people in developed countries are pessimistic and concerned about inequality, those in emerging economies are worried about entirely different issues. They are far more worried about corruption, crime, war, and unemployment. They see the world as “getting better,” and want their societies to be more transparent and managed to thrive.

In 2013 I gave a speech entitled “The World is Not Global, It’s Local,” discussing how economic flows around the world have shifted away from global commerce to more local commerce. As emerging economies like China and India grow, their political and economic interests have become more national (as has the United States), reflecting the need for businesses to understand, respect, and embrace local issues. This means letting employees take part in local citizenship, embracing local hiring and talent practices, and helping people connect with their peers in a personal and local way.

This topic is likely to grow in importance. I believe our desire for citizenship brings a new philosophy for management, changing the way we think about employee, customer, and community practices in all areas of business.

  • Ingrid Embree

    Great points. We are seeing that employees are craving authenticity and transparency. And now more than ever, companies need to live their core values.