Vanguard companies tap their firm’s collective intelligence to achieve social impact and financial success: Rosabeth Moss Kanter

Rosabeth Moss Kanter teaches at Harvard Business School. Speaking to Srijana Mitra Das, Kanter discusses what business leaders should do to navigate climate change and the pandemic — and why ‘vanguard companies’ succeed:

What is the core of your research?
I’m interested in the human side of enterprise or how leaders guide complex systems toward optimal outcomes for people and society. Organisations can at times appear to decline or thrive because of market forces or geopolitical circumstances — but, in fact, human agency makes all the difference in whether a business gets stuck in unproductive and unprofitable cycles or can shift into better modes.

What would you recommend to business leaders now in terms of avoiding ‘establishment paralysis’ and confronting climate change?
Once a business seems successful, it gets too easy for some top managers to pat themselves on the back, join clubs of other people like them and try to maintain things as they are — these complacent (and ultimately ineffective) managers get stuck ‘inside the building’, as I put it in my book. When it comes to climate change, they might do the minimum for compliance to standards and make token gestures. So, my recommendation to leaders is — be paranoid! Assume that climate change is a major threat. Take a deep and broad look at your operations, your suppliers and the end uses of your products or services and try to reduce their influence on the environment. Mobilise everyone in your company to do this. Partner with other companies because climate change isn’t an issue any one company can address by itself. And support new ventures that offer alternatives to the way you’re currently doing things — in short, innovate.

Can you discuss a business which followed your dictum to ‘think outside the building’ and made environmental impacts while bolstering profitability?
A bank in Brazil took sustainability as its mission. It started viewing every aspect of its operations through a green lens, even creating environmental and social responsibility screens for customers seeking large financing. It listened to external experts who suggested it work on the environment just outside its headquarters. The bank turned that alley, a haven for drug dealers, into a vibrant oasis in Sao Paulo. That helped attract customers drawn to such values, including the World Bank which chose it as the lead for a global deal.


The pandemic is still impacting economies. What should businesses do to look beyond it? Does Kanter’s Law named after you apply here?
Kanter’s Law holds that everything can seem like a failure in the middle. Whenever you try to do something new, you can hit obstacles that seem to derail the innovation. Give up and it’s a failure — persist, persevere and pivot, and you can often guide the effort to success. The pandemic creates one very messy middle, a difficult disruption. But the most successful leaders are now pivoting in several ways to get through the misery of the middle — they’re mobilising their people to rethink products and services and make improvements that’ll help the company leap forward after the crisis. They’re creating new innovative ventures. For example, a retail pharmacy chain got involved in new activities as its contribution to pandemic response. Some of those activities, like offering mental health services in stores and digitally, are now major ventures for the future.


What are your findings on ‘vanguard companies’?
These companies are willing to be at the front of the pack in tackling new issues. They are what I term ‘supercorps’ because they use their enormous power to do good and be profitable at the same time. Their leadership has vision and courage. Vision means the ability to see further and identify unique solutions that are good for everyone. An example is a global cement company in Mexico that invented new kinds of cement and new uses with positive social impact, like antibacterial cement for hospital construction. Second, vanguard companies show courage. Laggard companies don’t want to be the first to try new ideas. Vanguard companies are willing to break new ground and risk failure — but because they have a culture of confidence, where people at all levels believe they play a role in success, they tap the collective intelligence of the whole organisation to achieve social impact and financial success. They become ‘supercorps’ precisely because their mission and sense of purpose tells them that the effort is worth it.

Why do you say employees should steer a company’s ESG?
One theme that runs through my work is the importance of tapping all the talent in your company, not just the favoured few. My earlier work contributed to the idea of empowerment — giving people more responsibility and opportunity helps them work to the highest standards. Today, the feeling of purpose and meaning coming from involvement in a company’s environmental and social impact is a huge motivator of commitment and loyalty.

Views expressed are personal

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