The economic fallout of COVID-19 and other societal events of the past year have exacerbated and shed light on severe inequities across the U.S. workforce. About half of Americans have little to no savings, and millions have faced financial devastation as unemployment and hunger rates have spiked throughout the crisis. Minority workers have been disproportionately affected by what is being called the most “unequal recession in modern U.S. history.”
Yet, despite the economic downturn, the stock market has soared. It’s clear that there is a profound disconnect here; the measurements used to gauge a corporation’s financial health largely ignore the people who keep that corporation afloat. In short, today’s business environment is not human-centric.
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In a sense, 2020 served as the ultimate test of a promise made by Business Roundtable CEOs in August 2019. In the widely publicized announcement, the chief executives of many of the world’s largest companies emphasized the need to move away from shareholder supremacy. The purpose of a corporation, they vowed, would now be to serve all stakeholders, including employees, customers, and communities. But in September 2020 — after months of pandemic-induced shutdowns and protests for racial justice — a study found that corporations were failing to fulfill this promise of stakeholder capitalism.
Having spent years serving on boards and as investment partners at venture capital firms in Silicon Valley, we’ve often heard terms like human-centered used by entrepreneurs. Many leaders point out that the most important element in building a company is the people who work there. They also emphasize how much they want to help customers and give back to communities. But often, the pressures of building a business quickly get in the way. Many of these companies become obsessed with short-term profits at the expense of their missions and at the expense of retaining satisfied, engaged employees.
We’ve also seen that when entrepreneurs take the right steps to develop human-centric businesses, they achieve greater, more lasting success. They become much more adept at managing teams, as well as at attracting and retaining a diverse network of employees who are innovative and creative. These companies become more agile and are able to adapt to change while keeping their missions and their people front and center.