Business and Markets

Business Leaders Make Their Predictions for 2019

December 21, 2018  • Business & Society Network

What will happen in 2019 at the intersection of business and society? As our team in the Business & Society Program looked ahead to the new year, we realized the best answers lie in our network of business leaders and academics. From Artificial Intelligence to worker voice to lifelong learning, these diverse predictions impart a powerful sense of possibility, even in facing some of the world’s toughest challenges in the new year.

1. Artificial intelligence will quietly make its mark in the workplace.

The most intriguing moves in artificial intelligence will be the least visible to the consumer. It won’t be the Alexas and Google Assistants built into the TV and toaster, but the use of intelligent augmentation to drive greater productivity in industrial processes. In 2018, the American Medical Association formally recognized augmented intelligence’s ability to assist doctors in improving health care diagnoses. In 2019, augmented intelligence systems will become more transparent. They will quietly boost productivity in the background of financial services, transportation logistics, and other critical industries by calculating likely outcomes so that better informed human teams will make better decisions. – Joseph Byrum, Chief Data Scientist, Principal Financial Group

2. Business schools will find inspiration in their core values.

Business schools have been successful because they are an ideal training ground for a world of free markets, open societies, and global integration. Yet each of these three pillars is currently under siege from populism and resurgent economic nationalism. Business schools can respond by adapting curricula to ensure students are positioned to drive sustainable, inclusive growth that brings people together rather than tearing them apart. Reminding ourselves of our core purpose will enable business schools to help save the world—and in the process save ourselves! – David Bach, Deputy Dean for Academic Programs & Professor in the Practice of Management at Yale School of Management

3. The circular economy will focus on missing circular infrastructure. 

Missing infrastructure is holding back the ability of companies to participate in the circular economy and scale new circular products and services. In 2019 we will start to see innovations lower those barriers.  Imagine, for example, a Circular Operating System for Fashion—a series of shared or cross-value chain platforms and infrastructure that create economies of scale and enable the proliferation of circular products and services. In this system, connected garments and multi-brand digital wardrobe platforms could link the customer to an ecosystem of circular products and services, better enabling tracking of materials so that they can be reused. – Chris Grantham, Executive Portfolio Director, IDEO London

4. Corporate boards will not return to the status quo. A wider range of stakeholders will become the new normal.

There was once a time when corporate boards could dedicate the bulk of their attention to shareholder returns. No more. Larry Fink’s famed BlackRock letter put Purpose on the board agenda. Rising employee voices and the war on talent — and fear of negative public perceptions — will keep issues of diversity and inclusion on the radar. This is to say nothing of a complicated political backdrop in which ‘staying quiet’ is no longer a safe option. Smart and effective boards will quickly bring themselves up to speed and round out their own ranks by bringing new perspectives into their discussion. Those that don’t will be left with a lot of clean-up. – Eli Malinsky, Associate Director, Aspen Institute Business & Society Program 

5. The backlash against Silicon Valley will take aim at authoritarian corporate governance.

In the past two years, perceptions of Silicon Valley have gone from being a benign source of world-changing innovations to an invasive and irresponsible malignancy that saps our time, menaces our mental health, and threatens democracy. Shareholders have now realized that they don’t have any more power over these companies than anyone else due to structures that give founders 10 or more votes per share: Zuckerberg could in principle sell Facebook to Putin without checking it out with anyone else. 2019 will be the year when investors finally band together to demand an end to these authoritarian systems and seek accountability from our silicon overlords. – Jerry Davis, Professor, Michigan Ross School of Business

6. As Diversity and Inclusion grows as a field, its focus will turn to leadership.

In 2019, companies will be looking for increasingly innovative ways to implement diversity and inclusion. This continues the big shift underway from one-off programming solutions to looking at issues deeper in company culture: “What got us here will not get us there.” One major area to watch is the growing discussion around how leadership needs to evolve and “look different” as a way to increase diversity and get new faces at the table. To meet these needs, D&I roles will increase in importance and visibility at organizations and those companies who don’t have the role will move to create it. – Deepa Purushothaman, National Managing Principal of Inclusion, Deloitte

7. Employee and manager actions will take on new weight as businesses signal leadership on social issues.

As the public sector retreats on the environment, on diversity and inclusion, and on human rights, some business leaders and businesses are stepping in. That makes it all the more important for these businesses to live up to their stated values in day-to-day practice. Everyone’s contribution matters here. Employees need to develop the skills and comfort and the “Moral Muscle Memory” to ACT on values conflicts themselves, hopefully before they become legal or regulatory violations. Voicing and enacting values requires a leader/manager who has the skill and comfort level with change to actually listen and hear what is being raised. – Mary Gentile, Creator/Director of Giving Voice to Values, Professor of Practice at the University of Virginia Darden School of Business

8. Food and agriculture’s potential for enabling and solving for climate change will be realized.

In 2015, 193 world leaders said the greatest challenge of our time is the ability to feed people well in the face of climate change. With 48 percent of the United States landmass under the stewardship of farmers and ranchers, who care about land, soil and water, enabling them as the change agents to solve for sustainability is a tremendous opportunity. This year UN IPCC report on climate change gave newfound urgency to the search for solutions. In 2019, we should consider the potential of our farmers and ranchers, the great enablers and change agents for our future. – Erin Fitzgerald, Chief Executive Officer, US Farmers & Ranchers Alliance

9. How we affirm our humanity will become a central question for higher education.

A key challenge for higher education in 2019 is how we make our humanity central to our pedagogy. To flourish in tomorrow’s workplace, our students must be able to do well what robots can only do poorly or not at all. So, how do we create educational communities and curricula capable of delivering excellence in those distinctly human dispositions and qualities vital to a professionally flourishing life? From exhibiting empathy to fostering trust, from harnessing humor to engaging imagination, from inspiring creativity to promoting collaboration, from creating strategy to conveying a smile, we need pedagogies that will deliver. – Jeffrey Nesteruk, Professor of Legal Studies, Franklin & Marshall College

10. The new focus for business will be on changing the system in which they operate, not just making green products or services.

We are entering the next phase of business sustainability, one directed at creating sustainability rather than reducing unsustainability.  For example, it is not enough to simply reduce greenhouse gas emissions;  instead, we have to go carbon neutral or negative.  That will require a systems view that goes beyond triple bottom line thinking.  Look at what WeWork did by disallowing meat on expense reports to reach carbon neutrality goals by 2020. Also, look at Toyota’s plans to be carbon neutral by 2050, an effort that can only be accomplished by working with old and new partners to change the system by which cars are made, used, reused and disposed.  I make a similar argument in this article. – Andrew J. Hoffman, Holcim (US) Professor of Sustainable Business, University of Michigan 

11. Wages may tick up, but the bigger thing to look for are investments in worker training.

Thanks to the tightness of the labor market, real wages may well creep up in 2019—at least before the next recession hits. This won’t make up for decades of stagnation, but it’s something. What interests me more, however, is whether companies are providing sufficient training to their front-line workers. Some surveys, like the latest from ManpowerGroup, suggest that skills-starved employers are starting to invest. But other research, such as that from Accenture, indicates the opposite. In the long run, this will be key: Unless a lot more workers get a lot more training, wages overall will continue to drag. – Rick Wartzman, Director, KH Moon Center for a Functioning Society at the Drucker Institute

12. Worker voice won’t quiet down in 2019. It will keep adding new sections to the chorus.

The most significant workplace trend in 2018 was the rise of employee activism across diverse industries—from hospitality to tech, and across brands, from Amazon to Microsoft, and of course, #GoogleWalkout.  As I wrote in [email protected], there’s a clear alignment between workers’ quest for economic security and the company’s quest for financial health and long-term reputation;  this alignment is what makes employees a force to reckon with – and to trust.  I predict companies will begin to embrace employees as an early warning system on risk and reputation.  It won’t happen this year, but eventually, employees will be welcomed on boards in the US, as they are in Europe.  Momentum is building, but it’s a work in process. Stay tuned…– Judith Samuelson, Vice President, Founder and Executive Director, Business & Society Program

13. In digital media, substance will continue to become more important than format.

In 2013, infographics reached enough critical mass to launch the “Best of American Infographics” book series. 2015 set in motion the so-called “pivot to video.” 2017 saw podcasts become mainstream. In 2018, what struck me was the contrast between layoffs of video and podcast teams at digital media startups, and the number of retweets I saw of a screenshot of plain black type on a white background: a harrowing passage from NYTimes coverage of climate change. Multimedia formats aren’t “over”, but they’re no panacea. As consumers think more intentionally about how to spend screentime, substance will be the deciding factor. – Keith Schumann, Communications Manager, Business & Society Program 

14. Computing power will continue to transform the way we can analyze physical climate risk.

Until recently, climate modeling focused on larger, global macro-economic predictions. But major (and accelerating) changes in computational power now allow analysts to build vivid scenario analyses for geo-specific assets.  We can make this incredibly granular—for example, what the agricultural impact on GDP would be in forty years for a county in the US Midwest at our current rate of fossil fuel use.  The ability to downscale a number of potential physical impacts from climate change will change the way we think about building codes, insurance, financial assets, and perhaps our willingness to take this challenge more seriously.– Ashley Schulten, Head of Responsible Investing, Global Fixed Income, BlackRock 

15. America’s “laboratories of democracy”—states and municipalities—will increasingly lead on innovative infrastructure investment and ways to pay for it.

More than 15 states have joined the US Alliance on Climate Change and committed to Paris Accord emissions reduction targets.  These goals cannot be met without investing massively in infrastructure and new technologies.  But infrastructure investment driven by climate change priorities will leave substantial gaps in America’s infrastructure that are not directly connected to emissions reductions.  Everything from access to high-speed internet, to road and bridge maintenance, schools, ports and water systems will still need serious attention—and they will await serious Federal leadership (and funding). – Miguel Padró, Senior Program Manager, Business & Society Program 

16. Companies that fail to unleash the corporate social intrapreneurs in their midst will be left behind.

In 2019, pressure on companies from investors and employees to improve their performance on environmental, social and governance issues is likely to increase.  Good intentions will not be enough.  How will companies accomplish the required pivot?  To move from commitments to practice, the C-Suite cannot go it alone; they’ll need to find and support the corporate social intrapreneurs in their ranks. In the coming year, the companies that thrive will be those that harness the potential of their employee base to create new innovations that unlock business and social value. – Nancy McGaw, Deputy Director, Business & Society Program

17. Business educators will be more intentional about empowering students to design a purposeful life.

In his book Excellence Without a Soul, Harry Lewis, the former dean of Harvard College, contends that universities have forgotten their main purpose, that is to help students “learn who they are, to search for a larger purpose for their lives, and to leave college better human beings.”  If business educators are committed to this calling, we should invest our energy in designing and delivering learning experiences that go beyond our traditional curriculum to focus on the greater purposes of life-long learning, self-discovery, well-being, civic engagement, and meaningful careers. This will entail an integrative learning approach that fosters students’ capacity to learn over time and beyond the campus. – Lynn Wooten, Professor of Management and Organizations, The Charles H. Dyson School of Applied Economics and Management, Cornell SC Johnson College of Business

18. In 2019 there will be exponential momentum for regenerative business models

Economist Marjorie Kelly described the regenerative economy in 2003. In 2017, Kate Raworth’s Doughnut Economics arrived in strategy, innovation and sustainability conversations. MIT’s Presencing Institute has empowered legions of global decision-makers to let go of unfit models and to embrace new ones more fit purpose. Finally, evidence of companies that regenerate by designcreating financial capital while strengthening ecosystems and communities—is increasing, from Seattle’s Nori to Brazil’s Legado das Águas. 2019 will be the year we see a groundswell of compelling business models that deliver long term value through regeneration. – Lorraine B. Smith, Writer, corporate advisor

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