84% of executives think they are highly trusted by consumers and 79% think they are highly trusted by employees, (but) only 27% of consumers and 65% of workers report highly trusting business leaders. According to a 2024 Gallup poll, only 16% of Americans say they have “a great deal” of confidence in major companies. Since UnitedHealthcare CEO Brian Thompson was killed by a gunman, consumer, employee, and community frustration at corporations has escalated to outrage. We have moved from “I don’t trust you” to “I hate you,” (amid) complaints about denied claims, paltry reimbursement, and corporate greed. The key failure is that corporations are not delivering value for customers, employees or communities (while) trusted companies outperform peers by 400%.
In the days since UnitedHealthcare chief executive Brian Thompson was tragically targeted and killed by a gunman on a New York City street, we have seen an alarming outpouring of vitriol against the company, its leaders, and other insurers. While many condemned the violence and offered condolences to the CEO’s family and colleagues, those messages were often drowned out by a chorus of complaints about denied claims, paltry reimbursement, and corporate greed.
In the broader business world, leaders might be tempted to simply mourn Thompson’s death, beef up security to protect themselves against similar attacks, and dismiss the widespread backlash as not particularly relevant to their organizations or industries. They may naively presume that memories are short and that people venting today will move on in the weeks to come.
But executives who do so are failing to recognize the gravity of this moment.
Consumer, employee, and community frustration at corporations seems to have escalated to outrage. We have slowly moved from a world of “I don’t trust you” to “I hate you,” and wide swaths of the American public now feel a great antipathy toward capitalism and capitalists.
Recent statistics are testimony to these festering frustrations bubbling over into anger. The percentage of Americans who view capitalism negatively increased from 33% in May 2019 to 39% in August 2022, according to Pew Research, while surveys from Just Capital show that younger, poorer, and non-white people take an even dimmer view of our current economic system. According to a 2024 Gallup poll, only 16% of Americans now say they have “a great deal” or “quite a lot” of confidence in major companies, down from 28% in 2001. And there is an alarming disconnect between what corporate leaders (executives, directors, and shareholders) and their customers and workers believe. A 2023 survey on governance from Harvard Law School found that while 84% of executives think they are highly trusted by consumers and 79% think they are highly trusted by employees, only 27% of consumers and 65% of workers report highly trusting business leaders.
In recent years, companies have talked a good game about moving from shareholder capitalism to stakeholder capitalism, acknowledging that the long-term health of their businesses and society depends on them doing more than simply delivering returns to investors. But even those that in 2019 publicly committed to the Business Roundtable’s new statement of purpose affirming these corporate social responsibility goals, have, according to more Harvard researchers, fallen short.
Key Failures
It’s time for leaders to take a step back and recognize some of the key failures that have led to the growing backlash we are witnessing today:
Not delivering value for customers.
Across sectors, consumers feel like they are being forced to pay more for lesser goods and services. Inflation was one of the hot-button issues of the recent U.S. presidential election, and many attribute a significant portion of it to corporate profit-seeking. Skyrocketing prescription drug prices, the introduction of airline baggage and meal fees, escalating grocery bills, and more have left people exasperated. And, when they try to interact with companies, they are greeted with mostly automated telephone agents, online customer service bots, or humans who don’t have the power to help them.
The health insurance and pharmaceutical industries might suffer the most criticism in this category of failing consumers, but consider, two other very recent examples: Boeing, where cost-cutting led to fatal safety flaws in passenger airplanes, and Boar’s Head, which allowed unsanitary conditions in its meat processing facilities to spark a deadly listeria outbreak.
Not delivering value for employees.
According to Gallup, U.S. worker engagement is at an 11-year low. The enormous and growing gap between executive and worker pay has been a source of consternation for at least a decade.
More recently, at organizations from automakers and hoteliers to Amazon to Starbucks — businesses that are routinely and justifiably lauded for their innovation, customer-centricity, and financial success — we have seen increased tension between labor groups and management. Again, there is a gap between workers’ expectations for employers — with Millennials and Gen Z in particular demanding fair pay, flexibility, growth opportunities, and meaningful work — and what companies are offering, which for many involves long hours, low wages, poor job security, limited prospects for advancement, and either entirely fixed or unpredictable schedules.
Not delivering value for communities.
Having studied and published articles on purpose-driven companies for more than a decade, we can confirm that many founders, C-suites, and boards are working to develop business models and strategies that deliver positive environmental and social impact and good governance.
But too many are simply paying lip service to these ideals — posturing or purpose-washing — or unable to follow through on their good intentions with significant action (as the collective underperformance of the Business Roundtable signees shows.) And, for every company trying to do the right thing, there are others who, even when caught engaging in bad behavior, face limited consequences. For example, amid criticism for deforestation, child labor violations, wage-fixing, and tax evasion, Cargill continues to be a leading global agribusiness. Despite evidence showing that it ignored the harmful impacts its content algorithms have on young users, Meta continues to be one of the world’s most successful technology companies.
A Path Forward
How do companies failing in one or more of these areas move to success in all three? It’s no easy feat to simultaneously deliver value for customers, employees, and communities as well as shareholders. To do so often requires painful trade-offs or compromises; for example, increased pay for workers and more environmentally responsible sourcing might mean higher product prices.
But corporate leaders cannot shy away from such debates and decisions nor hide them from public view. They must take time to reflect on fundamental questions such as: Why do we exist as a business? Who would care if we were gone? What value do we want to create, how do we want to create it, and for whom? These are not academic questions. Rather, they get to the very core of your purpose, from which you’ll gain insight into how to build and sustain a viable company.
From there, you can ask more specific questions like: What do we see as a fair profit margin? How much money should our C-suite make relative to front-line workers? Which negative externalities aren’t being factored into our P&L and how might we address them? In many cases, you might need to entirely rethink your business model, compensation structure, resource allocation, and compact with shareholders.
Those who embrace these discussions sooner than later will be rewarded in the marketplace for both customers and talent, perceived as more trustworthy to buy from and work for. It takes courage to rethink and revamp our leadership, our organizations, and their place in the world, but it can be done. Consider three examples.
Bühler is a family-owned, ₣3 billion-revenue Swiss company that has in recent years transformed itself from a quiet technology leader in food processing machinery into a vocal advocate for industry innovation, education, and sustainability with a five-year strategy for halving energy, waste, and water use across its value chain. As one veteran at the company explained: “The old Bühler would have sold the equipment and told the customer, ‘See you for some spares.’ The new Bühler cares about the machine’s energy impact and would design the production process with the customer to minimize … waste and maximize output.” The company is also ranked as one of the best places to work in Switzerland.
How was this accomplished? The board and C-suite began in 2010 with the crafting of a new corporate purpose: “innovations for a better world.” A new CEO, appointed in 2016, Stefan Scheiber, sought out like-minded partners among: customers, including Barilla, Nestle, and Ardent Mills; suppliers, such as Microsoft; startups; and academic research institutions. He also established forums at which industry peers could share best practices and began working with start-ups. He redirected R&D resources toward sustainable projects and HR energy toward the development of young talent. And he announced the metrics by which Bühler would measure its progress.
Scheiber describes his thinking in this way: “How we produce food in a sustainable way for more people [so] we generate a good living for generations in the future is ethically .. societally, … technologically one of the key questions of the planet. And to be able to play a role there, even a tiny little one, to bring people together from science, academia, processors, the NGOs, and suppliers into these value chains and together try to find solutions, that… is very fulfilling.”
DBS is a pan-Asian, $10 billion-revenue bank headquartered in Singapore, that in 2009, had terrible customer satisfaction scores due to relationship manager turnover and lengthy ATM and branch queues. (The joke at the time was that DBS stood for “damn bloody slow.”) Today, it is considered to be the most popular bank in the world.
CEO Piyush Gupta achieved this turnaround in three waves. First, by reorienting the company toward customer-centricity, including a new service mantra (respectful, easy to deal with, dependable), targets for “customer hours saved,” and more “customer journey thinking.” The second wave was digitization — also to support customers — but DBS ensured that employees weren’t left behind, eschewing automation and layoffs for upskilling. Gupta has said that his goal was to turn “sheep into wolves.” Finally, the third push has been toward sustainability, not as a do-good exercise but as a smart strategy involving more inclusive banking, financing of sustainable rather than carbon-intensive businesses, and promoting social impact initiatives. The bank’s new purpose and mission is to be the “best bank for a better world.”
And, Gupta has noted, DBS investors ultimately benefit. “In the long term, what is good for the shareholder is to make sure that you’re working on things that are good for the country, society, community, employees…. You exist because societies think you serve a purpose. If … societies start thinking that you are not necessary or you do not bring value, you will not survive.”
Veeva Systems is a U.S.-based cloud software provider serving the life-sciences industry, which in 2021, became the first publicly traded C corporation to convert to a public benefit corporation. Though it is still a for-profit entity, it is now, as a PBC, legally required to balance the interests of multiple stakeholders such as employees, customers, and society, as well as shareholders.
As CEO and founder Peter Gassner explained in a 2020 letter, this move was “a way to align our certificate of incorporation to the values-based way we operate … It makes clear to customers that our purposes will remain aligned. And it also demonstrates to our employees and candidates that Veeva is a place where they can feel good about giving their best.” He later said, “We believe social and economic benefits go hand in hand and have always operated with the long-term view that doing the right thing for our customers, employees, and communities ultimately allows us to deliver the best results for investors.”
Current initiatives aligned to Veeva’s PBC purpose include enabling faster, less expensive, more accessible clinical trials through the Veeva Digital Trials platform, supporting customer choice and removing competitive barriers by allowing third parties (often competitors) to access proprietary data and products, and creating jobs with high potential for development and advancement, fair and competitive compensation and benefits, location flexibility, and without abusive restrictions (in a workforce expected to grow from 5,000 in 2021 to more than 10,000 in 2025.)
These examples show that companies operating in complex industries with diverse and competing stakeholders do have the capacity to deliver value to all of them — customers, employees, communities, and shareholders — at once. And research shows that there are long-term benefits to doing so: According to Deloitte, trusted companies outperform their peers by 400%
So we encourage more companies to follow the lead of Bühler, DBS, and Veeva. Brian Thompson’s murder and the public reaction to it revealed a swell of rage for corporate America that took many business leaders by surprise, but which doesn’t seem to be dissipating anytime soon. Let’s wake up and address these issues before another tragedy occurs.
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