By The Aspen Institute, Business and Society Program.
The year 2020 is many things: the first of a new decade, a presidential election in the United States with global implications, and perhaps, a year of newfound economic uncertainty. Just how much will change –and how much will continue? And, what does all this mean for navigating day-to-day life in business? Leaders in business and academia offer these predictions:
#1 Great Ideas Will Emerge Amidst (Economic) Uncertainty
Many of the most successful business ideas of the past have emerged during economic recessions. Fortune Magazine was founded in the Great Depression. Google and Amazon gained their dominance in the aftermath of the Dotcom crash. 2020 may not be a year of economic recession but we are in the midst of a different kind of downturn –a political and societal one. Optimism and cooperation appear to be at an all-time low. Political capital is spent on attacking opponents instead of building for a better future. It is in such an environment of crisis that the best new ideas often emerge, but these ideas will be about how we redesign our societal systems to better reflect our aspirations for the future. In spite of everything, 2020 might be the year to be an optimist.
Tim Brown, Executive Chair at IDEOn
#2 Fortune Will Favor Those Who Build Their Brand
Despite flareups of resistance –such as California passing legislation requiring Uber & Lyft to treat its workforce as employees rather than contractors– the progression to a freelance economy will continue its inexorable march forward. Accordingly, it will become increasingly clear that the best form of career security is becoming a recognized expert, because your reputation transfers and protects you in the face of disruption. Investing in brand-building activities such as speaking at conferences, leading local & regional professional associations, and writing articles to demonstrate your expertise will become critical to your professional success, because the most visible experts will gain the lion’s share of benefits.
Dorie Clark, Executive Education Faculty, Duke University Fuqua School of Business
#3 New Definitions of Business Success Will Proliferate
In 2020 we will continue to see new emergent models of how to drive business success. As social, environmental, and financial impacts will dominate most of the headlines, the tectonic plates of the management-employee relationship are fundamentally moving. Top and bottom line growth without fairness will fail, and executives and shareholders will realize that in order to win they must ensure that all employees share in the success and growth of their business. The growth of the “gig economy” and tight labor market challenges each of us to provide value to all those employed by our enterprises and ensure that our financial success cascades in measurable ways to everyone from the board room to the front line.
John Driscoll, CEO, CareCentrix
#4 CEOs Will be Judged Both as Commercial Leaders and as Social Architects
It is clear the current dynamic business environment, combined with evolving social, economic, and political realities, the role of the CEO is transforming faster than many had expected for both public and private concerns. Specifically, CEOs are realizing the need to take more active and/or vocal roles around stakeholder issues such as healthcare, education and retraining, climate change, affordable housing and the like. The most effective and most successful CEOs for the near future will need to be both strong commercial leaders as well as courageous social architects to ensure that the community of stakeholders they serve is as engaged and productive as possible.
Tierney Remick, Vice Chairman and Co-Leader, Board & CEO Services, Korn Ferry
#5 The End of Shareholder Primacy Will Surge through Legal Academy and Corporate Boards
There will be 2 significant corporate governance developments in 2020. First, companies, boards, business people and institutional investors will increasingly reject the shareholder primacy model, with lawyers and the legal academy the last to come along to this view. Nonetheless, by the end of 2020 stockholder primacy will be a minority (although still strong) view. Second, as a result the key governance challenge for 2020 will be how boards should respond to the new challenge of allocating corporate profits among various constituencies, as we move from a stockholder view to a stakeholder model.n?
David Berger, Member, Wilson Sonsini Goodrich & Rosati
#6 Boards Will Start Asking New Questions about What It Is They Are Paying CEOs to Do
Currently, with the bulk of pay committed to equity in some form, we are sending the CEO a mixed signal. On the one hand, investors and boards now recognize a set of constituents who are critical to the health of the enterprise –so-called “stakeholders.” On the other hand, with 60% and more of the pay based on equity, we are sending the message that the share price still matters most, and that shareholder primacy rules. But fresh winds are blowing when it comes to pay. Watch for companies to start to question the degree of the pay package that is linked to the stock price, and to experiment with targets aimed at value creation from the ground up.
Judith Samuelson, Executive Director, Aspen Institute Business & Society Program
#7 The U.S. Presidential Election Will Create New Challenges and Opportunities for Business Leaders Trying to Create Inclusive Workspaces
The 2016 presidential election increased racial tensions and other disparities among people –and 2020 will continue the trend. Leaders who are authentic and honest about what they believe in and why will be trusted even by those who disagree with some of their beliefs. Honesty will be highly valued in a year where it will be hard to find, scarcity will increase its value. When Toto from The Wizard of Oz pulled back the curtain on the all-powerful Wizard, it was good for all involved. I expect this will be true for America and the world.
Michael Bush, CEO, Great Place to Work
#8 A Five-Generation Workplace Will Multiply the Demands Business Leaders Face
Today’s businesses will need to quickly adjust their practices and policies to embrace the growing demands of the fast-changing workforce. For the first time ever, there are over five generations of professionals in the workplace. The expectations of these professionals are complex and varied. One thing is clear, the needs of the incoming generation, the Gen Z’s, are far more demanding than those of prior generations. These professionals are diverse, they demand to be heard, and they demand flexibility. Businesses that fail to address these needs will lose top talent and their businesses will grow stagnant.
Michele C. Meyer-Shipp, Principal, Chief Diversity & Inclusion Officer KPMG LLP
#9 Contrary to the Popular Rallying Cry of Younger Generations, Consumption of Single-Use Plastic Will Continue to Sky-Rocket
America is experiencing a plastic revolution. Single-use plastics, once a status symbol, are being replaced as a new market for non-plastic substitutes becomes mainstream. Campaigns like #TheLastStraw have managed to turn global franchises and cities against plastic straws and bags. Are we nearing peak plastic consumption? Not quite. The plastic industry accounted for 50% of global oil demand growth last year and will continue to expand as oil companies shift their investments to mirror demand patterns in an increasingly electrified world. Bans on single-use plastics are only marginally effective. For real impact on plastic consumption, nations must take macro-level action to find comprehensive solutions that reduce demand.
Greg Gershuny, Executive Director & Kate Harrison, Program Coordinator, Aspen Institute Energy and Environment Program
#10 A Collaborative, Networked Refill Model Will Emerge as Our Best Hope against Single-Use Plastics
Consumer demand, extended producer responsibility laws, and other public policy, along with the rising cost of raw materials will fuel demand for the refill model internationally. It will be offered from brands we know and love. And instead of having to get a large container amount, even when we only need a little, we will be able to purchase just the right amount. We will obtain our refill in a container that’s built to last and is smarter than us. It will know the nearest refill station for each specific product we consume. And… based on our usage trends, how much we should purchase to help us be more responsible consumers of the precious food, and raw materials we have on this earth.
Faith Legendre Circular Economy Strategist, Cisco Systems, Inc.
#11 Risk Becomes the Leading Driver of Corporate Climate Action
The script is flipping, from What’s the impact of business on climate change to What’s the impact of climate change on business? That’s shifting the conversation to align with something companies understand: risk –physical risk, supply-chain risk, reputational risk, right-to-operate risk, litigation risk and more. The rise of environmental, social, and governance, or ESG, data, from the hinterlands of “socially responsible investing” to the middle of Wall Street, is just one indicator. That’s leading companies to look more closely at nonfinancial metrics and bringing new life to staid corporate sustainability reports. It’s the beginning of a sea change in corporate climate action.
Joel Makower, Chairman and Executive Editor, GreenBiz Group
#12 Corporate Sustainability Professionals Will Face Good News/bad News/good News in 2020
For years, sustainability experts were outside the mainstream in many companies. Multiple factors are now pulling these professionals into the core –into discussions on strategy, innovation, business development and investor relations. That’s good news for those with deep expertise to share. The bad news is that many colleagues not trained in the complexities of managing social and environmental risks and opportunities also want to get in the act. In 2020, sustainability experts who take this burgeoning interest as an opportunity to learn and collaborate with their colleagues to help them quickly get up to speed on critical issues will be the winners. That could be good news for their visibility within their companies and for their own career development.
Nancy McGaw, Deputy Director, Aspen Institute Business & Society Program
#13 Smart Election Year Politics Will Hone in on Economic Security Policy
If the nation is going to tackle the challenge of climate change, address the destructive effects of growing economic insecurity and inequality, and create a framework for sustainable, inclusive economic growth, that will require sharp focus. Stressing the need for transformational infrastructure and technology investments to reduce carbon use and create quality jobs, training American workers to fill jobs in a new cleaner energy economy, fair gain sharing for American workers, and an international trading regime that better respects working people will not only win votes in every region of the nation but set the stage for a robust agenda in 2021 that has the prospect of actually passing Congress.
Leo Strine, Jr., former Chief Justice of the Delaware Supreme Court
#14 U.S.-China Trade War Becomes Our New Normal
Optimists aside, enthusiasm for the Phase 1 U.S.-China trade agreement is likely to wane in 2020. Tensions regarding market access will re-emerge as core U.S. contentions regarding elements of China’s industrial policy remain on the table. For sure, U.S. farmers will benefit in the short-term, but American supply chains are unlikely to unwind decisions to shift production elsewhere. If anything, overt blending of economic and national security concerns over the past two years has forever changed the meaning of U.S.-China economic exchanges. On both sides, we’re playing the role of diplomats now, whether we’re buyers, sellers, laborers, or investors.
Regina Abrami, Director, Global Program, Lauder Institute for Management and International Studies
#15 The European Union Will Seek to Lead but Others May Not Follow
Some of the global issues that European corporations are most concerned about are climate emergency and technological disruption. Both represent an opportunity to align decisions with the long-term health of the planet and launch new business ventures. At the same time, they require difficult transitions. The new European Commission shares these priorities. Europe has the opportunity to set the standards to which we hold corporations in society. Still, the governments of Britain and the US are not likely to engage in global action and China will stay on its nationalistic course. While a robust European voice is necessary, it will not be sufficient.
José M. de Areilza, Professor, ESADE Business School & Secretary General, Aspen Institute Spainitute Spain
#16 All Technology Companies Will be Required to Demonstrate Empathy and Ethics in Doing Business
Our world is transitioning from a symphony to jazz: there is much more randomness and unpredictability, in everything from politics to the climate and tech. To improvise well in the face of these changes, society will need a foundational set of ground rules in ethics. The idea is that when the unexpected happens, you’ll have pre-decided, concrete ethical guidelines to fall back on. In 2020, the need for solid ethical foundations and empathy particularly in technology companies will come to the forefront. Consumers will demand ethical tech and humanity as technology takes over all aspects of our lives. I think of it as a need for a Human OS –bringing humanity back to tech.
Caroline Barlerin, Social Impact Evangelist
#17 Companies Will Expand CSR to Include CDR
More and more companies will embed data responsibility principles into the way they do business –and embrace corporate data responsibility or CDR. The acronym may be new, but in a digital world, it’s the logical next step for companies committed to meeting their responsibilities to individuals, one another and society as a whole. For the Center for Inclusive Growth that means leveraging Mastercard expertise, data, technology, and philanthropy to help ensure the digital economy happens for people, not to them.
Shamina Singh, Founder and President, Mastercard Center for Inclusive Growth and EVP, Sustainability, Mastercard
#18 Remix Is the Way to Get to New Consumers
Across the emerging markets, companies are struggling to find cost effective ways to reach new consumers. Many over the last decade have tried to use a good ground game, i.e. traditional face-to-face models to reach the next two billion. In 2020, new routes to market will emerge that remix one company’s product with another, sometimes as a loyalty feature. Ever heard of a phone top-up card that comes with health insurance? It exists in Bangladesh. What about a video game company distributing mindfulness? Riot Games and headspace struck just such a deal. Embedding and remixes are not new, it’s just that we’ve reached a tipping point where we can expect it to become the norm. Now, pass the Heinz with Sriracha.
Zia Zaman, CEO, LumenLab
#19 Investors Embrace Shared Value Strategies to Improve Performance
A new understanding of the linkage between investment performance and social impact will encourage companies to adopt a social purpose, and enable investment professionals to improve financial returns. Instead of rating companies on a myriad of environmental, social and governance (ESG) factors with little consideration of their financial or strategic materiality, investors will identify companies that have built a competitive advantage through their social impact. In the process, investors will discover their own social purpose: allocating capital to companies that contribute profitably to social progress. The result will be creating a virtuous cycle that improves the welfare of customers, employees, and communities while advancing progress toward the UN Sustainable Development Goals –a triumph of shared value creation.
Mark R. Kramer, Co-Founder & Managing Director, FSG
#20 Rising Student Voice Will Prompt a Paradigm Shift among Professors
Today, students enter business school increasingly aware and concerned about the critical issues of our day. Faculty –charged with equipping these students with the context and skills to make responsible business decisions– will face louder questions about how the concepts they are teaching relate to issues like climate change and inequality. These collective student voices will be hard to ignore, forcing faculty to make a conscious choice between teaching the seemingly discrete theories and models in the same siloed manner or exploring these challenging questions by looking at business concepts through a broader, more multi-faceted lens.
Jaime Bettcher, Program Manager, Aspen Institute Business & Society Program
#21 Companies Will Come Together to Accelerate Second Chance Effort
Our economy –albeit vibrant– is not benefitting everyone. Corporations have been stepping up to help connect more people to economic opportunity and the Business Roundtable recently redefined the purpose of the corporation to “promote an economy that serves all Americans.” Building on the bi-partisan support for criminal justice reform across the country, 2020 will see businesses come together to develop and implement strategies that give people with criminal backgrounds a second chance by broadening their hiring pools, helping people build the skills that they need to qualify for in-demand jobs and sharing best practices with each other.
Heather Higginbottom, President, JPMorgan Chase PolicyCentern
#22 The Backlash to Populism Will be Worth Watching
Rising populism and autocracy dominate headlines. But it would be a mistake for their representatives to declare victory prematurely, just as it was for advocates for global capitalism after the Cold War. Every trend still contains the seeds of counter-trends. Every seemingly unstoppable force engenders countervailing forces and the possibility for corrective action. Don’t short global trade or capitalism yet. And don’t give up on democracy either. In writing my new book, Think Outside the Building, I’ve been hearing the stories of values-oriented millennials and baby boomers who are taking responsibility themselves for solving problems from climate change to economic inequality. Businesses can be a powerful ally if it can see these possibilities.
Rosabeth Moss Kanter, Arbuckle Professor at Harvard Business School