Companies influence on people’s day to day life has grown over the years and there is a strong positive association between the wealth of the nation and relative proportion of firms operating in those nations. Companies provide us with goods and services to consume or with employing thousands of people, or with investment opportunities. With increasing digitalization and awareness modern societies act as marshaling yard for society’s resources and company markets exist because of their ability to create value from society’s endowment of resources.
In Modern markets the interests or the company and societies should not collide but must coexist in a symbiotic manner. In those markets it is managers responsibility to not only to develop economic but also find an alignment between corporate and social interests. It is not a liability but a value proposition for companies to creating and realizing new value and surrender most of the value to not just to their investors, employees, and customers but for all members of the society. For many helping society means distributing essential goods, imparting training in schools or even food distribution, plantation efforts etc.
Though those efforts are in line with the thoughts proposed by Andrew Carnegie on monopolistic practices of companies and how they can help the society against exploitation. Companies can do much more while implementing the Digital Transformation technologies like replacing the traditional business models based on physical goods with digital tools. Some of the items which are cited include reducing mobility which decreases with energy consumption, reducing use of paper by digital communication techniques, improving transparency using block chain technologies reducing waste and even Energy Efficiencies devices which lower power consumption and deriving insights from huge sets of data helping in coming up with solutions for global problems.
Effective digital strategies are not about just implementing the technologies for the sake of going digital rather it has higher purpose of improving customer experience, changing the business landscape or creating value, which has huge business impact and benefit for environment. For example, in the current COVID19 Scenario ensuring customers, employees can continue to run with mobility and ensuring business continuity or disease spread or even availability of online retail platforms, which is required for business sustenance. Companies can extend beyond those indirect benefits by helping in managing Global sustainability topics like Circular Economy, GHG Management by leveraging digital transformation and can contribute to the well being of the social life.
There are excellent use cases of how digital technologies can be helpful in managing Circular Economy, GHG Management and improve societal value. Some of the use cases include RFID based material flows, block chain based mineral tracking, checking equipment health for issues and Land use management for GHG etc. Societal use cases include Content sharing in Conflict Twitter discussions to reduce social unease. Detecting inter ethnic relations or opinionated content identification, conflict mineral tracking and checking for forced child labor. As suggested by Tony Saldanha in his book on Why Digital Transformation Fail, Implementation of Digital transformation is also not without failures almost 70% of companies’ digital transformation journeys fail to create value as they lack discipline and lack of steps for execution which is beyond the scope of this blog.
While the logic of these theories may not be opaque to most managers, they nevertheless influence and shape management choices – that are often unconscious. Companies and mangers need to make a conscious effort to abandon the management choices of market economy and play a value creating role in societies by venturing into digital transformation.