The power and responsibility that companies have to help build a thriving, resilient world has never been greater.
Editor’s Note: This article is one of a special series of 14 commissioned essays MIT Sloan Management Review is publishing to celebrate the launch of our new Frontiers initiative. Each essay gives the author’s response to this question:
“Within the next five years, how will technology change the practice of management in a way we have not yet witnessed?”
The next five to 10 years will be a critical time for humanity, in which we can leverage new technologies to address some of our biggest challenges: a dangerously changing climate; pressure on natural resources, especially water and food; and historic levels of inequality.
For decades, business leaders considered these systemic challenges as the domain of government and civil society. Companies, they thought, should focus on creating jobs and making money. But no longer. Expectations are rising fast that business should help tackle our societal challenges — and do it profitably. For example, in one recent study, fully 87% of millennials surveyed believe that the success of business should be measured in more than financial performance.
Technology will clearly shake up how organizations operate in every way — no part of management will go untouched in a world of big data, ubiquitous sensors, and powerful analytics providing new levels of insight. But perhaps the most powerful transformation will change how companies manage their relationships with the larger world.
Business, using technology wisely, will help build a thriving, resilient world. Of course, technology comes with its own environmental and social costs. Better AI and robots could mean fewer jobs. And the “cloud” itself is not actually very light on resources; our IT-based world requires very real — and sometimes hard-to-extract — metals, and it’s powered by a lot of energy. But the case for techno-optimism is strong. Consider how new hardware and software will both make businesses run better and improve our lives.
The Internet of Things, paired with smarter analytics, will help managers understand a company’s impacts on the world in much greater detail. They will know, for example, how much energy and carbon it takes to operate their business at global, brand, geographic, facility, and product levels. Once you measure something, you can manage it. Making better decisions about efficient use of resources is getting easier.
In the largest sectors of the economy, progress is coming quickly.