In the last couple of years, the word “disruptive” used to mean great breakthrough technologies and processes. COVID-19, however, has given the word a whole new meaning. The pandemic has not only affected all aspects of our lives, but, more than that, it exposed deep social inequalities and environmental conflict. More importantly, the pandemic has threatened to reverse the progress of the United Nations’ Sustainable Development Agenda.  

 

The world, as we used to know it, has been disrupted to an unparalleled degree. As such, in a rapidly changing world, characterised by unprecedented shifts in the political, social and environmental fronts, business leaders need to step up their moral statements with practical actions. Indeed, this pandemic has forced decision-makers and business leaders to seek ways to create long-term value and reinvent their organisation, all while addressing the triple bottom line – profit, people and planet.

 

 

Enter the increasingly popular model – stakeholder capitalism. In the wake of this crisis, there is a pressing need for us to explore this model and transform it into one that can actually work for, rather than against, sustainable development and a regenerative economy that supports the well-being of all stakeholders. Although this model may have not fully caught on in Malaysia, but, on the global stage, we are seeing its growing primacy. This may be attributed to the emergence of socially- and environmentally-conscious employees, consumers, activists, communities, with millennials in the vanguard, who are holding businesses to higher standards of responsibility and a force for good.

 

In that vein, there is an urgency for businesses to move away from solely being a profit-making entity for its shareholders, but rather, redefine their purpose to create sustainable value for what is now magnified to stakeholders – employees, customers, suppliers, communities and lest we forget, the environment.

 

 

By the same token, amid the uncharted waters of this crisis, there has never been a better time to make a compelling case for innovation. Businesses must not only constantly innovate, but democratise sustainable innovation – which can only be successful by keeping our eyes and ears to the ground. Only when we understand our stakeholders’ pain points can we present a value proposition that best meets their needs, and ultimately, one that leads to long-term sustainability.

 

This is where engagement and partnerships among governments, businesses – large and small – as well as NGOs are crucial to keep a pulse on the perpetually changing needs and priorities of stakeholders, and emerging innovative practices. For example, established business leaders by way of their strong financial position, and younger players with a knack for innovation, can gear their efforts towards sharing their resources and skillsets in a way that create value for stakeholders. 

 

Evidently, this is a tall order, and it will take a concerted effort from all parties – the government through its policies, businesses through their business undertakings, consumers through their choices and communities through their voices – but if we work collectively, we can make that leap towards stakeholder capitalism, through the yellow brick road that is democratised innovation.

 

Ganesh Muren will be speaking on “Social Entrepreneurship and Stakeholder Capitalism - A Profitable Model?” at The Cooler Earth summit on 8 September 2020.