For a few months we’ve been thinking about the structural and behavioral changes brought on by the recession and debating which will stick. In “10 Trends You Have to Watch” in the current Harvard Business Review, the head of McKinsey and two of his colleagues address the question, offering their opinion that “it does seem there will be no going back to the pre-crisis world.”
Here are two trends they call “accelerating” that I thought were particularly interesting and relevant:
Trust in business is running out. Noting that there’s been a “precipitous decline in trust” and that it “makes everything about doing business more difficult,” the authors say it’s a strategic imperative to regain the trust of stakeholders and more effectively manage relationships. Corporate leaders have to demonstrate that they understand concerns over unpopular corporate behaviors (e.g., executive comp). They also have to reject “the view that the only objective of management is to increase shareholder value” and broaden their list of key stakeholders.
Shifting consumption patterns. U.S. consumers helped fuel global economic growth with vast amounts of debt but that party is over. Unless the growing Chinese or Indian middle class picks up the slack, the fall-off in consumer-spending growth will be tough to reverse for years to come. Their advice? Prepare for slower long-term growth, shift investment to Asia, focus on older consumers and find ways to offer luxury on a budget.
Every stakeholder group – employees, customers and investors in particular – is going to be reassessing the companies they choose to support. The successful companies are going to be those who recognize the changes that have taken place and who renew or renegotiate their stakeholder relationships based on an understanding of those changes.