“Recalibrating” in the Era of Essentialism: A Three-Step Guide for Corporate Leaders

As we settle into what will likely be a tumultuous 2024, we’re seeing pronounced shifts in the business environment. Corporate announcements from retailers and enterprise software companies to toy makers signal an era of cost cutting, including layoffs, as some businesses look to strengthen their market position. Others are refocusing their efforts on mission-critical opportunities. For example, Unilever announced shifting their sustainability focus to short-term, actionable initiatives that leverage their expertise in biotechnology, innovation and eco-design efforts, and Bank of America doubled down on their workforce, raising minimum wage for workers despite a decline in net income (and CEO compensation) in 2023.

Amidst all these calibrations, it’s clear that how we define good corporate citizenship is shifting. Companies are increasingly looking inward at what is vital to their continued health and ensuring that their resources align with business imperatives. Fewer corporate leaders are trying to thread the needle on ever-changing societal demands, or engaging on issues that could be viewed as polarizing and sometimes misaligned with their purpose and business objectives.

At APCO, we’ve started talking about a new “Era of Essentialism,” a return to business fundamentals that prioritizes alignment and advocacy on issues that are core to the business. This can mean that companies are saying less, and that’s not necessarily a bad thing. We believe that simplicity can yield greater impact—less can, in fact, be more. By focusing on what really matters, companies can show up more strategically and start to recalibrate and focus their resourcing. Essentialism calls for removing unnecessary complexities and focusing on issues that are core to their business.

But how can leaders recalibrate, get back on track and transition from an outside-in to inside-out approach to business principles? How can they identify, separate and prioritize initiatives that have become business fundamentals—need to haves—for the business and its stakeholders, from those that simply are not? We have developed a three-phased guide to help leaders navigate and embrace this era of essentialism:

• Building your Compass. Leaders should start by identifying the principles that will guide a company’s prioritization of issues to engage, focusing on business imperatives and key drivers of reputational value. For companies that have conducted a materiality assessment, this can include a refresh of that output to identify the most essential issues.
• Calibrating and Organizing. Companies can then do an audit of the full spectrum of issues and activities they’re engaging on and how they’re showing up internally and externally. Following this audit, leaders can reprioritize based on the company’s compass, organizing topics into several categories including, for example, where they should invest and lead; engage and maintain; or simply monitor.
• Acting and Communicating. Finally, leaders should guide their companies on how to act in ways that are consistent with their compass, investing in essential issues and pausing or pulling back as appropriate. They should also work with their communications teams on what campaigns to prioritize and which to deprioritize. Also, essential issues are not static—it requires consistent monitoring of the external environment to scan for issues that could become essential in the future.

With APCO celebrating its 40th anniversary this year, we are reminded that helping companies manage issues and their key stakeholders has always been foundational to our work. We’re helping the C-Suite and business leaders identify and focus on the business imperatives, recalibrate business agendas and realign narratives with priority stakeholders. By embracing essentialism, companies and leaders can create a competitive advantage, increase productivity and perhaps even make more of an impact, while achieving sustainable success.