The study opens on the chief executive’s problem. Colleagues, customers, community and the capital markets have all become louder, more demanding and more powerful, and they pull in different directions. New laws mandate ESG reporting while other bills ban ESG policies, which leaves leaders at risk of being caught in the crossfire.
The answer offered is a roadmap. The study identifies five drivers of humanized growth, and closes on the leader profile that carries them: ground, reimagine, focus, organize and unleash.
Key findings
- The strongest single gap in the study is on representation: 83 percent of overperformers represent stakeholders in decision making, against 8 percent.
- Ninety-two percent are proud of their company’s purpose, against 28 percent, and 71 percent say purpose guides all strategic decision making, against 8 percent.
- Alignment between corporate social responsibility and the overall value creation strategy shows the widest split of all: 73 percent against 2 percent.
- Ninety percent see stakeholder value creation as an opportunity, against 50 percent.
- The share of company value held in intangible assets is cited as moving from 17 percent to 90 percent.
- Fear is a live constraint. Thirty-five percent against 28 percent report keeping a low profile, limited by fear of being accused of greenwashing or wokeness.
The pressure on the C-suite
Every stakeholder group has grown louder, more demanding and more powerful at the same time, which forces difficult choices rather than balanced ones. Regulation pulls both ways, with new laws mandating ESG reporting and new bills banning ESG policies, so government interference itself becomes a risk factor.
The historical frame stretches from Rome through Florence, Port Sunlight, Hershey and the 1930s to 1974 and shareholder primacy, which the study calls the end of a fifty year era. What follows is accusations of doing too little, or of doing too much.
The study frames the resulting question as one shared across the C-suite: how to lead an organization from shareholder primacy to value creation for all stakeholders.
The evidence base
The study rests on more than 475 vision interviews, a quantitative online survey of more than 750 board members and C-suite leaders across five functions, and an AI hypertrend study of 110,000 social posts, spanning 52 markets with seven country studies. A separate strand covers 450 Chinese C-suite leaders.
The overperformance measure is topline revenue growth against direct competitors over three years, scored against how well the company delivers sustained value for all stakeholders. The averages rise from 3.87 at the bottom to 5.87 at the top across a base of 651.
The social analysis compares what overperformers and underperformers actually talk about, across 97,837 tweets and 19,952 LinkedIn posts, and finds overperformers using two classes of language where underperformers use four.
Ground, reimagine, focus
The first driver is grounding the company in human reality. Seventy-five percent of overperformers understand their stakeholders against 17 percent, 63 percent engage them against 10 percent, 83 percent represent them in decision making against 8 percent, and 64 percent are willing to share good and bad news against 14 percent.
The second is reimagining the company’s role from the future backward. Eighty percent hold a long term focus against 25 percent, and the study asks leaders to embrace both a utopian and a dystopian vision of the emerging future rather than choosing one. Ninety-two percent are proud of their company’s purpose against 28 percent.
Purpose here is a strategic filter, not a campaign. Seventy-one percent say purpose guides all strategic decision making against 8 percent, and the study is explicit that purpose has to be rooted in company DNA and connected to deep belief systems, and is not a marketing tactic or a new advertising campaign.
The third driver is a holistic strategy with adaptive change. Seventy-two percent define value per stakeholder against 9 percent, and 73 percent align corporate social responsibility with the overall value creation strategy against 2 percent. The instruction is to avoid whack-a-mole, address short term issues in the context of the long term, and find the courage to define what to stop.
Organize and unleash
New and shared KPIs are what make the strategy real, including measures for intangibles and aligned incentive plans. Sixty-one percent report shared targets and KPIs against 10 percent.
The fourth driver is organizing for interdependence. Sixty-nine percent drive systemic change to create stakeholder value against 10 percent, 66 percent work interdependently against 8 percent, and 71 percent empower colleagues who sit closest to stakeholders to act for the business against 25 percent. Collaboration with government and public institutions runs 67 percent against 48 percent.
The fifth driver is the leader. The da Vinci humanized growth leader creates space for all people and ideas, listens differently, and works through authenticity, empathy, vulnerability, humility and servant leadership while leading an ecosystem with agility and courage.
The profile separates attitudes, how you think and feel, from behaviors, how you deliver outcomes. The attitudes are open-minded, courageous, future-focused, optimistic and authentic. Open-minded means transparent, curious, learning, adaptable and inclusive. Courageous means unapologetic, taking a principled stand with high integrity, grounded in reality, and willing to make big bets.
The behaviors are driving results, acting strategically, leading change, building talent, and collaborating and influencing. Driving results means creating reciprocal stakeholder value on shared holistic KPIs. Acting strategically means filtering all key decisions through business purpose and ringfencing strategic initiatives. Leading change means providing a roadmap to a future-fit state and mobilizing a coalition of change leaders.
Scope and limitations
This is a partner preview issued in the fourth quarter of 2023, not the full publication. The overperformance analysis rests on a base of 651, and the paired percentages throughout compare overperformers with underperformers as the study defines them.
Source
This page summarises IRG Impact Study: Drivers of Humanized Growth, by Institute for Real Growth, University of Oxford Saïd Business School, SpencerStuart, The B Team, Q4 2023.