What’s old is new! It’s finally 2020 and here are the top trends that have been evolving over the last decade and that I believe will define leadership for companies in 2020 and beyond.
Over the last 10 years, trust in companies, governments and media has eroded significantly. According to the Edelman Trust Barometer, more than half of respondents believe that capitalism is doing more harm than good. For company leaders and boards, the need to increase trust, integrity and transparency is urgent and growing.
Trust is like a thread that runs through the fabric of everything your company does, and the saying goes that “trust takes years to build, and seconds to break”. The Edelman report finds that trust is a combination of competency and ethics, where ethical drivers are three times more important to trust in a company than competency.
What does this mean for company leaders? It’s not just about your product. Of course your product must deliver reliably on what it promises, but your brand promise is bigger than your product. Everything you do from customer service, to industry advocacy, to employee engagement needs to come with a heavy dose of authenticity and integrity.
ESG (Environment, Social, Governance)
Last year I wrote my entire manifesto with an ESG lens, and 10 years ago I was writing about generating sustainable value for companies through ESG initiatives, while numerous books like Green to Gold were being published, and Natural Capitalism was having a renaissance. Today, it’s Larry Fink of BlackRock in his annual CEO letter calling out climate change as a primary risk to economic growth and prosperity. The same letter touches on the “s” and the “g” as well, inviting company leaders, boards, and investors to improve transparency and inclusion.
In order to be leaders, companies must address the environmental and social issues that impact their business, and that their business has an impact upon. Similarly, forward-thinking boards need to dedicate time and resources to understanding the impact of their company’s actions and policies while encouraging transparency around these issues to increase stakeholder confidence. In good old-fashioned terms, this is called a materiality analysis and, when done well, serves as a future-facing framework for risk and reputation management.
Additionally, companies are increasingly being called upon to take a stance on ethical issues, such as data privacy, diversity and inclusion, wage disparity and environmental impact. This requires integrating company values into your corporate strategy, so that the stance you take and the causes you choose not only resonate with your key stakeholders, but are also material to your business. As I mentioned in a past article, taking a proactive approach to choosing which issues you will spearhead as your “cause” will drive long-term value creation, and increase stakeholder trust (see point #1).
Privacy vs personalization
The “privacy vs personalization” debate has been raging since the early 2000’s and shows no signs of subsiding. Consumers are smarter about sharing their personal information and have increasingly lost trust in the way companies use and protect their data. In other cases, in particular with younger generations, there are fewer boundaries around data privacy as they have grown up sharing data in exchange for improved service or convenience.
Euromonitor’s 2020 Top 10 Global Consumer Trends calls this trend “Private Personalization”; where consumers opt-out of providing their data unless they can see tangible benefits and value in doing so. According to LiveClicker, a provider of real-time email personalization solutions for B2C marketers, companies that invest in advanced personalization achieve 17% more revenue for their marketing efforts than those using less advanced methods. The risk, however, is in the way companies collect, protect and use that same consumer data … and their intentions in doing so.
I believe that in 2020 we will see a revival of loyalty and membership programs as a means to gather customer data with “permission” and drive personalized engagement in a more targeted and reward-laden fashion. By investing in loyalty programs, companies can increase trust, improve the customer experience and better balance privacy and personalization. Leading companies must have a clear and transparent strategy around these trade-offs to best manage the risk-reward balance for their customers.
How will you distinguish your company as a leader in 2020? Focus on serving your key stakeholders in an environment of authenticity, transparency and purpose to deliver long-term and sustainable value, and you’ll be off to a great start!
Originally published at https://www.linkedin.com.