4 minute read 22 Jan 2021
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How today’s business leaders measure success

Alison Kay
By Alison Kay

EY UK&I Managing Partner for Client Service

Focused on delivering long-term value through purpose for clients. Diversity and inclusion ambassador. Happiest when spending time with family and friends. Loves to be near the ocean.

4 minute read 22 Jan 2021
Related topics COVID-19 Long-Term Value Trust Purpose
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Business purpose has been brought into sharper focus during the COVID-19 pandemic when we quickly saw what organisations ‘were for’.

A recent EY Leaders' Perspective webinar brought together Mark Cutifani, CEO, Anglo American, and Alison Martin, CEO, EMEA & Bank Distribution, Zurich Insurance Group, to discuss how the COVID-19 pandemic has changed the way we define value and measure success.

A clearer sense of purpose

To set the scene, it’s been noted by many commentators how the pandemic shone a clearer light on the value that businesses create, from putting food on our table to keeping us safe or producing the vital medical equipment that helps us fight the disease.

Given this context, what did leaders have to say about how their organisations’ value and values had shifted? As the leader of a global mining company, Mark Cutifani explained how the pandemic had helped governments see and understand more clearly the value that Anglo American delivers to remote communities. “We became a big player in helping our employees and our community members work and look after themselves in a very new environment,” said Mark.

Building trust

As the CEO of a global insurance giant, Alison Martin felt that the pandemic has highlighted the imbalances in society, which have contributed to the breakdown in trust between people, business and government. She believes that the pandemic “amplified risks and uncertainties that existed before”, referencing health, income and ethnic inequalities. Part of the problem, she believes, is that “shareholder capitalism is simply too narrow, and businesses truly do need to reflect the full set of stakeholders”.

That may not be as tough a job as it first appears, because the gap between what investors need and what other stakeholders want, is not as big as is often perceived. The investors Alison Martin connects with are thinking about the long-term, looking beyond the latest financial results to consider a wider range of factors. These include the investee company’s ability to attract and retain employees, which in turn relates to broader social issues such as diversity and inclusion. For Alison, Zurich’s ability to generate value extends to “using the skills and capabilities you have to do the things that matter most”, citing an example of Zurich applying its risk expertise to a flood resilience framework that helps keep vulnerable communities safe.

accounting to society for how you deliver your results is going to be as important if not more, than the results themselves
Mark Cutifani
CEO, Anglo American

Delivering value to all stakeholders

As an insurer, careful risk management and long-term thinking are key, so it makes clear financial as well as environmental sense to put climate change at the centre of the organisation’s thinking. As Alison put it, “How do we make the planet insurable?”

Despite being in a very different industry, Mark’s views on stakeholder value align. In his business, delivering value to the communities within which Anglo American operates – at local, regional and national levels – is crucial to the company’s existence. “If you don't have a very special relationship with your local community, no one's going to actually help you,” he explains, which relates to the need for organisations to obtain and maintain a ‘license to operate’. 

Counting what really matters

Having established that measures of success increasingly extend beyond the purely financial, how do our leaders make sure they count what really matters most?

While both companies are signed up to global and/or industry-specific initiatives that require their organisations to meet externally set and monitored standards, they both believe that it’s also vital to create a framework that suits your individual organisation. In Anglo American’s case, that meant spending time discussing and defining the organisation’s purpose, then looking at how that translated into value for different stakeholder groups, including shareholders, communities and people.

As Mark Cutifani put it, “accounting to society for how you deliver your results is going to be as important if not more, than the results themselves”.

Looking ahead

To address the question the webinar posed about how you measure success, the answer may increasingly lie not only in the profits you create but the value you generate to all stakeholders.

Summary

The Leaders’ Perspective programme is a forum in which business leaders get the opportunity to live their purpose and shape the discussion about the nature of long-term value that business should generate for all stakeholders.

About this article

Alison Kay
By Alison Kay

EY UK&I Managing Partner for Client Service

Focused on delivering long-term value through purpose for clients. Diversity and inclusion ambassador. Happiest when spending time with family and friends. Loves to be near the ocean.

Related topics COVID-19 Long-Term Value Trust Purpose
Upvote