Last year, we talked about the broadness of ‘Better Business’. Essentially, this means organisations, and those who lead them, making more ethical and positive changes in how they operate, improving the world around them as well as their profits. Our annual research reflection explored how businesses can be more environmentally aware and socially responsible, becoming more mindful of the impact they can create.

2023 has been a year of positive progress in many ways, but the conclusion of the recent COP28 conference has reminded the world that the big issues surrounding climate change, sustainability, and social responsibility still exist. It has never been more vital for us to take collective responsibility for the future of our world.

For industry, this means a significant re-think on how and why we work. To help steer such explorations, we’re continuing last year’s theme of Better Business, exploring the latest research to identify practical ways for leaders to adjust their mindsets, enhance their capabilities and take action to become both more ethical and more successful in doing so, because profit and progress really can go hand in hand.

The lessons we’re sharing in this roundup come from the research and explorations of management education experts around the world, offering straightforward insights that can guide your business in the right direction.

Such perspectives are crucial as we face big challenges like climate change and wealth inequality in the year ahead. To become part of that change, read on and see how our experts can inspire you to make 2024 a better year for everyone.

Because 2024 has to be the year of more ethical business – it just has to be.

1. Understand that different motivations for work exist

Marshall Goldsmith, a top executive coach, believes in finding joy and meaning in your work and suggests rating your daily tasks based on long-term benefit and short-term satisfaction. But here’s the catch: if you love your job, you might unintentionally judge co-workers who work for different reasons as a result. Research by Mijeong Kwon (Univ. of Colorado), Julia Lee Cunningham (Univ. of Michigan), and Jon Jachimowicz (Harvard) emphasises this happens because people who love their work tend to think it’s more moral. However, this judgment can actually make it harder for others to gain the support they need at work, hindering company capability and straining relations.

Goldsmith’s advice is to, as we put it, “Help More, Judge Less”. Be understanding and supportive of your colleagues, no matter why they work.

The study suggests that companies should be careful about pushing the idea that everyone should love their job, as not everyone works for the same reasons. Leaders should recognise and respect these differences to create a more understanding and supportive workplace. Remember, it’s okay to work for various reasons, and a workplace that values different motivations is a healthier one.

2. Make the most of climate subsidies

Companies play a significant role in environmental impact, with just 100 organisations reportedly responsible for 70% of global greenhouse gas emissions. While many businesses aim for sustainability and wish to do better, a study from Durham University Business School highlights that access to financial incentives are crucial for prioritising green policies.

The UN’s Race to Zero campaign sets criteria for credible emissions reduction pledges, but the study suggests a lack of financial incentives may hinder companies from meeting these guidelines. Green incentives, such as government grants or tax incentives, can make sustainability efforts a higher priority, with the study also underlining the need for policy intervention to posh for green innovation strategies, encouraging firms to invest in environmentally friendly initiatives.

Whilst companies must also be morally motivated to do good, there’s no escaping that financial incentives and policy support are essential for encouraging companies to prioritise green innovation strategies, and businesses should take advantage of them as much as possible.

Aligning business goals with environmental sustainability to address the urgent need to innovate new green solutions will only pre-empt government policy that is shifting this way.

3. Challenge biases in your funding

Research by Jorge Guzman at Columbia Business School and Aleksandra Kacperczyk at London Business School shows women have a 63% lower chance getting support for a business pitch. Even when pitching to women investors, female-founded firms may still struggle, being two times less likely to raise further investment.

Investors, the found, tend to ask men promotion-focused questions and women prevention-orientated questions which impacted their funding outcomes. While framing responses positively may help, the burden to fix this shouldn’t rest solely on women, the researchers note.

It’s a systemic issue. For investors to address, challenge and remove this universal venture stereotype broader education and training is required. Until then women will need to continue actively pushing to change their own fortunes, learning from figures like Greta Gerwig, who was unapologetically confident when it came to convincing Warner Bros and Mattel to give her script for the Barbie movie the green light.

However, the lesson for businesses and entrepreneurs is clear: foster an inclusive environment, provide equal opportunities, and challenge biased questioning styles to ensure fair and equitable access to funding.

4. Communication fights fear

Innovation and creativity are vital for growth in business and society. However, a study from ESSEC Business School reveals that innovative patent applications are often rejected for being too different. The fear of the unknown and resistance to change, the researchers suggest, can hinder creativity with workers sometimes expected to conform.

The study finds that the more innovative a patent is, the less likely it is to succeed, as financial analysts struggle to understand its potential success. To overcome these challenges, effective communication is crucial, with six strategies outlined which highlight the importance of collaboration and communication to foster creativity that does not alienate.

Leaders should recognise the value of creativity and innovation for growth. Despite the challenges and resistance to change, creating a space for effective communication and collaboration can help organisations embrace new ideas and processes.

5. Flexible working is not going anywhere

Employees continue to highly value the flexibility to work from home, with new research from Chicago Booth revealing that some workers are even willing to give up part of their salary for this option.

The study highlights a shift in perceptions about working remotely, identifying that women, both with and without children, were willing to pay more than men to secure such flexibility in most countries. Another study from Hult International Business School found that 80% of their respondents rate flexibility as a top benefit of their employment, with 60% valuing autonomy and 46% emphasising work-life balance.

While increased flexibility fosters a greater work-life balance, improving motivation and happiness, the downside includes new challenges such as feelings of isolation and loneliness, as well as a decline in relationships between colleagues and management – the old adage “out of sight out of mind”, ringing unfortunately true unless organisations act to put measures in place to engage and include remote staff.

Rather than removing any option for work flexibility, businesses should (and continue to) acknowledge the significant value employees place on the flexibility to work from home and support them in doing so, by actively addressing the new challenges such arrangements present.

6. Trust your workers

One such challenge is navigating the fine line that exists between “checking in” with remote staff and “checking up” on them. The shift to remote work, while offering a better work-life balance for many, brings challenges tied to monitoring employees. Research from NEOMA Business School found workers who experienced daily monitoring lost trust in their managers. Moreover, research from Harvard Business Review reinforced that monitored employees are more likely to take unapproved breaks and disregard work demands.

Frequent monitoring can breed distrust among remote workers, leading to feelings of reduced autonomy and worry over constant surveillance. To mitigate these issues, it is crucial for managers to strike a balance between oversight and trust-building.

NEOMA’s researchers emphasise the crucial role of leadership in defining appropriate benchmarks for conduct, recommending clear communication guidelines and proper training for managers be developed in order to support them in navigating the nuances of remote team management.

Above all, companies should create and maintain culture of trust through open communication, allowing managers to effectively monitor workloads without compromising the autonomy of remote employees.

7. Robo-rich might make your community poorer

The stock of Industrial robots has tripled in the last ten years, and research from Frankfurt School of Finance and Management proves that exposure to industrial robots negatively affects wealth distribution in society. As robots take on tasks traditionally performed by blue-collar workers, there are consequences on promotions, wage increases, and the willingness of investors to take financial risks.

For better business, managers and business leaders must be aware of the impact their automation of services is having on their workers, investment strategy, and the community around them. Embracing innovation is a good thing, but leaders must be mindful of instances where such innovations hold a negative impact for their human workforces and wider community.

To counterbalance the impact of wealth accumulation and financial risk-taking, there is a need for strategic planning, reskilling initiatives, and workforce development programs. Life-long learning will be crucial to ensuring that employees can navigate the evolving landscape of automation without compromising their financial well-being.

8. To AI or not to AI?

Researchers from INSEAD and BGV combined their expertise to produce a study exploring the intersections of AI and ESG. With AI already integrated into 75% of businesses’ core strategies, the study underlines the vital importance for ethical guidelines to be produced and followed in order to avoid any negative consequences. There is, the study notes, the potential for profitability within ethical, responsible AI use, and emphasises the need for investors to prioritise these factors for long-term success.

Many organisations currently exploring how they can integrate AI into their business are doing so by focusing their search on what support they might need and how those tools might work. However the study from INSEAD and BGV highlights another important consideration of senior leaders – the need to consider which AI models and companies they are buying into, and what sort of research and development their company might be supporting as a result.

Leaders should invest in specialised talent, establish ethical guidelines, and make sure to monitor the AIs they use to harness the benefits of responsible AI.

9. Small actions can make a big difference

Diego Lazaro leveraged his international business education from EHL Hospitality Business School and EAE Business School when founding his consultancy Be Diverse.

Specialising in LGBT+ inclusion, Be Diverse supports companies in becoming more open and inclusive through consulting and training services. His clients include the likes of IBM and Airbus. BlueSky Thinking spoke with Diego earlier this year to find out more about his experiences.

Business leaders can learn from individuals like Diego, who shared with us the importance of addressing LGBT+ inclusion as both a social and economic issue and highlighted the win-win benefits for companies. He advocates for inclusive policies, training, and targeted initiatives to create a supportive and respectful workplace, and attract the best talent. And these are not difficult tasks to undertake; simple actions like having a non-discrimination policy are easy steps to make, but go a long way.

10. Seek out persistent bias in workplaces – and explore new ways to tackle them

We all know that women often face a harder time than men in the workplace when it comes to getting heard and getting ahead. One popular tactic to remove such biases from decision making is “blinding” - whereby personal details are kept hidden from decision-makers, allowing individuals to solely be judged on their ideas or capabilities.

But are such methods effective? A study by ESMT Berlin exploring blinding in the workplace found that, whilst blinding did seem to neutralise gender bias when it came to decision-making, it did little to address or solve the issue of bias in the workplace.

Blinding, the researchers say, is no silver bullet. In fact, relying too heavily on such methods reduces the potential for employees to connect with colleagues who hold similar interests or skills, hinders inter-staff learning opportunities and does little to advance the discussion on bias.

Instead blinding should be used as a tool for identifying, not the solution to solving, gender bias in the workplace. Using such experiments can help illustrate to businesses whether they have a bias problem to tackle. Importantly, upon discovering this, they must seek to act.

In reflection, last year we championed the notion that “Better Business” thrives on small steps. As we enter 2024, whilst such small steps are still vital (we must all play our part) we need to take more of them collectively in order to drive change.

As we declare 2024 to be the year of big changes, the question lingers: “What more could you be doing?”

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