CHROs Must Insist on Human Development as a Business Outcome

Quintessence is the purest essence of a thing.

When the CEOs of the Business Roundtable recently changed their statement on "the purpose of a corporation," you could say they were grappling with the quintessence of business.

Shareholder return is not it, they decided.

Rather, it's 1) delivering value to customers; 2) investing in employees; 3) dealing fairly and ethically with suppliers; 4) supporting the communities in which they work, including protecting the environment; and 5) generating long-term value for shareholders.

This shift to more human-oriented outcomes has generated debate, including discussion about whether and how these leaders will hold themselves and their corporations accountable to these aims.

This deliberation is taking place as Americans' confidence in big business remains low overall. On a list of 15 U.S. institutions, "big business" ranks 13^th in a recent Gallup poll, just ahead of TV news and Congress. A 2018 poll found that Americans aged 18 to 29 are as positive about socialism (51%) as they are about capitalism (45%). "This represents a 12-point decline in young adults' positive views of capitalism in just the past two years," wrote Gallup Senior Scientist Frank Newport, "and a marked shift since 2010, when 68% viewed it positively."

But in a May 2019 article, Richard Reeves of the Brookings Institution summed things up with a more hopeful statement: "The question now is not, I think, whether and how capitalism will end, but how it can renew its promise of a better future -- for us all."

Confidence in big business may be low while young adults are also shifting political views -- but don't mistake skepticism for nihilism. As much or more than their parents and grandparents, millennials are looking for the quintessence of a life well-lived, and an important part of that is finding purpose in their work.

The Millennial's Quest for Purpose

"Purpose" may be intellectual and intangible, but real-life actions can help workers achieve it:

• having a manager who acts like a coach (and not a boss)
• having regular, ongoing conversations with their manager (instead of one annual review)
• receiving development based on their strengths (and not on their weaknesses)
• viewing life holistically (rather than compartmentalizing work and not-work)

This list requires HR professionals, managers and leaders to take accountability for applying a laserlike focus on human development, which is a radical departure from Milton Friedman's theory: "There is one and only one social responsibility of business … to engage in activities designed to increase its profits."

The Business Roundtable's statement is far better aligned with millennials' quest for purpose than Friedman's theory of business is, because the CEOs' statement is quintessentially human. Those human-oriented outcomes echo Reeves' view that capitalism can help renew the promise of a better future. Corporations can do their part by shifting to a focus on human development as a primary concern of business, while seeing better shareholder returns as a result.

CHROs, this is in your hands. You know that tomorrow won't be like today. You know the strategies you're developing now will dictate your company's future. Get on the right side of history by insisting that human development is an expected organizational outcome for your corporation.

Define and implement a strategy that includes these four basics:

1. a clarified statement of purpose
2. a culture that is predicated on strengths-based development
3. managers who care about performance and development
4. a commitment to honoring work as being part of a whole-life proposition

View Unmet Needs as Opportunities

Some Americans worry that a lack of confidence in the quintessence of U.S. institutions like business and capitalism equates to a lack of respect for those institutions. The opposite can be argued, and perhaps more conclusively. Doubt or mistrust in our institutions reflects a deep need for the meaning, purpose and hope they provide -- a profoundly important need that's clearly going unfulfilled.

But millennials aren't waiting around for these institutions (big business, Congress, the media, school systems, to name a few) to give them a sense of meaning, purpose and hope. They know they can find that purpose when they work for organizations that get culture and management right.

The Business Roundtable did not draft a blueprint for that. But millennials did. They want learning and growth, high-quality management, opportunities for advancement, and a sense of purpose.

If driving purpose is the quintessence of business, development is the vehicle. Make it your own, and your company will own the future.