Redefining our relationship with society

As the country’s politicians wrestle with redefining our relationship with the EU, business leaders are not alone in worrying about the consequences for the UK, our economy, society, our employees and businesses. But looking up from the daily drama in the House of Commons, there’s a responsibility on us all to try to stay focused on the more long term issues that will redefine the future relationship between business and society. And although that’s not always easy, there are signs of progress. It’s been remarkable to see the paradigm shift as more and more leaders realise that businesses cannot succeed long term if we do not better serve the needs of society. That means doing more than creating returns for shareholders who in many cases have become so distant from the businesses they invest in as to be unable to see clearly what’s in the long-term interests of that business, let alone society as a whole. While Brexit may well have long-term and far reaching consequences, in the short term it’s serving to distract us all from focusing on the technological, social and demographic trends that are redefining our future. How businesses and nations respond to these is what will ultimately determine who succeeds long-term and who does not. Seizing the opportunities this presents and managing the risks will demand a deeper understanding of the needs, goals, challenges and opportunities facing not just shareholders but also employees, communities, customers and other stakeholders. These change fast so it’s going to be hard work keeping up, but crucial that we do. For our sector, this will be about staying ahead of what visitors to our places expect, whether that’s someone looking for a home, somewhere to shop and spend time or a workplace. Long gone are the days where property owners could hand over the keys and then sit back to collect the rent. Meaningful insight This isn’t about understanding ‘how people want to shop’ or ‘where they want to work’; it’s about meaningful insight into what drives them as individuals, what their goals, hopes and aspirations are. There’s a subtle but important difference. So how do we respond? By fundamentally rethinking how we create value and for whom. The pursuit of profit, without a broader lens and at whatever cost, is no route to sustainable business models, nor is it likely to endear a business to today’s increasingly discerning consumers. The answer lies in being clear on purpose, not as a brand strapline, but as a fundamental underpinning of how a company sets its strategy and determines who it is here to serve, and how it measures that value in a more rounded way. That requires a long-term outlook – not a focus on the latest quarterly figures. This isn’t about understanding ‘how people want to shop’ or ‘where they want to work’, it’s about deep and meaningful insight into what really drives them as individuals, what their goals, hopes and aspirations are. There’s a subtle but important difference. The Crown Estate’s roots can be traced back to 1066, so I like to think that when it comes to a long-term outlook, we can be confident in our track record. But even a business with a history like ours cannot take durability for granted. We don’t and that’s why we know that it’s not us who will judge whether we meet our purpose of creating ‘brilliant places through conscious commercialism’ – it will be our customers, our employees, our communities and every other stakeholder on whom our decisions impact. There are some huge systemic challenges facing the country, our economy and society and the solution to this needs government, business and communities to work together. That’s not going to be easy at a time of huge distraction but there’s an opportunity for business to lead the way by rethinking how we define success against purpose, not just a narrowly defined view of profit.  Paul Clark is chief investment officer at the Crown Estate