something because research conducted by the Edelman Trust Barometer reveals the public’s increasing expectations of CEOs.28 Eighty-four percent of people surveyed expect CEOs to inform conversations and policy debates on one or more pressing social issues, including jobs, the economy, automation, regulation, and globalization. They also found that 56 percent of people lose respect for CEOs who remain silent on critical social issues. The report concludes that to build trust, CEOs must lead with purpose, be authentic, and galvanize employees on the social issues that matter to them. I believe this is one of the reasons we are seeing more CEO activists—business leaders who are speaking out and taking a stand on important social and global issues like climate change, food security, poverty, domestic violence, mental health, and immigration, to name a few.
In August of 2019, the Business Roundtable, an association of CEOs of America’s leading companies, released a new statement on the purpose of a corporation.29 For a long time, the purpose of corporations was clear—create value for shareholders. The new purpose statement lays out a broader set of five commitments:
Delivering value to customers,
Investing in employees,
Dealing fairly and ethically with suppliers,
Supporting communities in which companies work, and
Generating long-term value for shareholders.
This new purpose statement was signed by 181 prominent CEOs who committed to lead their companies for the benefit of all stakeholders: customers, employees, suppliers, communities, and shareholders. It was an exciting moment. Like many, I applauded their efforts. Now, I’m not sure whether these CEOs realized it at the time, but in creating this new purpose statement, they also established a new leadership contract for themselves. We’ll see whether they will honor these commitments and if they will be genuinely accountable as they lead their organizations into the future.
Final Thoughts
I’ve spent my career helping leaders build great companies, led by the best leaders in their industries. When a company fails, there is considerable fallout from its demise, including the loss of shareholder value, economic prosperity, and jobs. That’s why I get angry and upset when a company like Sears closes. There’s a significant ripple effect on the economy, for shareholders, customers, and employees. I get outraged when a company fails. When you dig a little deeper to understand how it all fell apart, you quickly realize that it’s the leaders who failed. They were not capable of stepping up when their companies needed them the most. They may not have understood the significant drivers in their context. They may not have seen the necessary changes required in their business model, or it could be that their arrogance simply blinded them. Alternatively, when they did, they reacted too slowly—or maybe it was just too late. Either way, something prevented them from responding more quickly. Whatever the reason, they failed to step up to their obligation to the people they led. They didn’t appreciate the changing context in which they were leading. As a result, they were not able to step up when it mattered most to their primary stakeholders. It is critical then that you understand the context and the world in which you lead to be vigilant in challenging how you think about your business and what will drive success in the future.
Gut Check for Leaders: The New Game Begins Before the Old One Ends
As you think about the ideas in this chapter, reflect on your answers to the following Gut Check for Leaders questions:
1 How are you staying abreast of the game-changing technologies impacting your industry and your company?
2 How are you staying on top of geopolitical events taking place around the world?
3 To what extent are you staying on top of the trends and thinking about the future of work?
4 To what extent are you setting the tone for diversity, equity, and inclusion within your organization and creating a place of belonging for all to find meaningful work regardless of gender, race, sexual orientation, ability, and age?
5 What are your perspectives on the role and purpose of business in society, and in what way do you intend to leave your organization and our world in a better place?
Notes
1 1“The New Game Begins Before the Old One Ends,” Innosight CEO Summit Report 2017, September 2017, https://www .innosight.com/insight/the-new-game-begins-before-the-old -one-ends/.
2 2Carmin Chappell, “Sears Was ‘toast’ ever since its 2005 Kmart merger, says former Sears Canada CEO,” CNBC, October 15, 2018, https://www.cnbc.com/2018/10/15/sears-was-toast-ever -since-kmart-merger-former-sears-canada-ceo.html.
3 3Shoshanna Delventhal, “Who Killed Sears? Fifty Years on the Road to Ruin,” Investopedia, July 1, 2019, https://www.investopedia .com/news/downfall-of-sears/.
4 4Grant Cardone, “Sears Bankruptcy Could Have Been Prevented,” The 10X Entrepreneur, October 16, 2018, https://medium.com /the-10x-entrepreneur/sears-bankruptcy-could-have-been-prevented -530969baac5d.
5 5“Sears tanked because the company failed to shift to digital,” Business Insider Intelligence, August 26, 2016, https://www .businessinsider.com/sears-tanked-because-the-company-failed-to -shift-to-digital-2016-8.
6 6Evan Comen, “Sears’ Edward Lampert Is the Most Hated CEO in America,” 24/7 Wall St., November 6, 2016, https://247wallst .com/retail/2016/11/06/sears-edward-lampert-is-the-most -hated-ceo-in-america/.
7 7“Sears saved by chairman’s $5.2 billion bid, last-minute reprieve for up to 45,000 workers,” The Financial Post, January 17, 2019, https://business.financialpost.com/news/retail-marketing/sears -chairman-lampert-wins-bankruptcy-auction-for-retailer-with-5 -2-bln-bid.
8 8Soundarya J in Bengaluru, “Lampert reveals plans for Sears after bankruptcy: WSJ,” Reuters, February 13, 2019, https://www .reuters.com/article/us-sears-bankruptcy-lampert/lampert -revealsplans-for-sears-after-bankruptcy-wsj-idUSKCN1Q21D6.
9 9Lauren Hirsch, “Sears sues former CEO Eddie Lampert, Treasury Secretary Mnuchin and others for alleged ‘thefts’ of billions from retailer,” CNBC, April 18, 2019, https://www.cnbc .com/2019/04/18/sears-sues-eddie-lampert-steven-mnuchin -others-for-alleged-thefts.html?&qsearchterm=sears%20sues%20eddie%20lampert.
10 10Nathan Bomey, “Sears buyer Eddie Lampert
