The average age of organizations on the S&P500 Index was 65 years in 1960, which moved down to 30 years in the year 2000; and the prediction for 2020 is less than 20 years. But it is worth considering whether it is the technological disruption that is posing a challenge or social disruptions in the form lack of healthcare or other socio-political issues are posing threats to businesses across the world. 

At the Singapore Human Capital Summit, Prof Ian Williamson Dean of Commerce Victoria Business School shared that South African businesses suffered because of the high levels of AIDS and HIV in employable population which has had a direct impact on the business community. In South Africa, the disease affects 5.7 million and 23 percent are skilled workers and 13% are high-skilled workers. The HIV/AIDS pandemic has had an impact on labor supply, through increased mortality and morbidity. This is compounded by loss of skills in key sectors of the labor market. In South Africa, around 60% of the mining workforce is aged between 30 and 44 years; in 15 years this is predicted to fall to 10%. In 2008 year alone 250,000 South Africans died of HIV. So what does that mean from leadership succession planning perspective? 

On the same lines, political situations can also impact businesses and can drive organizations to the stage of bankruptcy. Williamson shared the example of Thailand Red Shirt Riots that resulted in 52 countries advising against traveling to the country. In a country, with such a high level of tourism income, this political situation endangered the survival of many organizations.

So what is it that organizations can do and how can they turn such social disruptions into opportunities? These are issues which are disrupting as intensively as technology.  He shared the different levels of response from leaders on social issues:  

Resistance – I don’t want to deal with it; compliance – I accept it as a cost of doing business 

Legitimacy – I do something to support it but it is divorced from the products you sell. This is the right way to go about it.

Social impact as firm strategy – I can look at such issues as market failures and look at how the firm can make a difference to the community and keep ahead in business. 

It is in the 3rd approach that such social challenges can be transformed into opportunities and leaders can find tremendous value in addressing such challenges but also in creating business opportunities. 

Williamson shared the example of Etihad airlines to bring to light how they took a challenge that was real. Etihad created a unique solution that solved both a business challenge and a societal need. Etihad was faced with two major challenges related to customer satisfaction and in attracting and retaining call center employees: One, lack of Emiratis in private sector workplace; and two, low representation of women in the workplace. They could not get people to serve their customers! This was a social issue that was preventing the growth of the organization. The innovation was to look at the social issue and fill the gap in a way that created business value: They created an all Emirati women call center in UAE in 2011 in partnership with the government and other agencies in the region and resolved the challenges they were facing.

Thus it can be seen that success is in communities and organizations working together to focus on societal gaps and bridge such gaps through sustainable and profitable innovation.  

As a leader, are you aware of the social challenges of the community you serve? What is the motivation for an organization to solve social problems? Do you have the capability? Taking on social issues is a huge opportunity for organizations to both contribute to the community and also create sustainable business performance.