In her speech and conversation with Stuart Crainer, Rosabeth Moss Kanter says the way to find solutions to the world’s problems is by businesses and societies agreeing to work hand-in-hand.
There are a lot of crises we have to deal with that require responses larger than what a single organization can do to change itself. We have to change society and the world around us. We have known that a pandemic like this was coming and we have known about a litany of other difficult problems that people care about and that affect business as well as our lives and livelihoods, namely climate change, global warming, pandemics, and health crises along with health disparities. There is a litany of problems. The time has come for us to tap the imagination, innovate, and find new solutions not only to the problems of society, but also to reinvent our very business models.
Five mantras can help us tackle the challenge and get through this crisis.
- Think outside the building: The building is a good metaphor for thinking outside conventional wisdom and structures that confine us. After all, we know health is not the hospital. This pandemic has shown us that health cannot even be contained in the hospital as they cannot serve all the people getting sick. There are many other health services and companies that are inventing new models for delivering healthcare to people. So, we have to think outside the literal buildings, but we also have to think outside conventional wisdom, the structures that confine us, and stifle innovation.
When Apple launched the iPhone to the public in 2007, Verizon, one of the largest telecom companies could not figure out what to do with it, so they went about competing by thinking outside the building. They got rid of many conventional structures and silos that divided departments, and instead put together cross-departmental teams. They got rid of the walls that divided them from other companies and put together a simultaneous team with two partners from outside, Google and Motorola. They worked in parallel, shared information and secrets, and they were able to develop their offering in record time using Android software. They launched the droid and took the market share away from Apple. Android is now the leading technology in the world. This tells that when we think outside the building, we not only solve crises and problems like climate change, pandemics, and disparities, but we also your business model, compete quickly and be an agile lean company that collaborates to get things done.
Sometimes executive leaders do not even see outside the literal building. They go from one gated community, one protected environment to another and only talk to people who agree with them, not people who will challenge their thinking or offer an alternative point of view, which thwarts the innovation potential. The way to get innovation is to wander far outside the buildings.
- Dream bigger than you are: Dream beyond the resources you currently control. It means reaching far and thinking about the issues you are concerned about in the biggest possible way. It is a familiar idea in entrepreneurship to think about ideas without having the resources. The resources follow from a compelling idea. It takes as much time and energy to dream small as it takes to dream big, so we might as well dream big. In his famous speech, Dr. Martin Luther King, Jr. said, “I have a dream”; he did not say, “I have a few ideas.” He stated the dream boldly, and it continues to inspire generations to try to make a difference, to have a big dream.
The ones who state their ideas most boldly reinforce their sense of purpose, the meaning of their dream, and are then able to tell the right story to other people, and compel them to want to follow the dream. When everybody else also knows the dream, they can remind you of it when things get bogged down in bureaucratic details. Thus, repeating the dream at the beginning of every meeting is a helpful thing to do. The dream and the story one tells need to connect the past to the future envisioned. It needs to be a narrative that flows, that makes the dream plausible because of a different view of the past and also helps one tackle the future. It is therefore important sometimes to return to history and revise the history a little to get to the future.
The ones who state their ideas most boldly reinforce their sense of purpose, the meaning of their dream, and are then able to tell the right story to other people, and compel them to want to follow the dream.
When the CEO of Disney, Robert Iger, was trying to transform Disney, he did it with bold dreams but he always rooted those dreams in the legacy of the company. In order to turn around Disney Animation, he wanted to buy Pixar and get Steve Jobs and his talent and new technology for animation. He rooted that in the purchase, in the story of the founding of Disney, and told a story that was compelling but bold. So, finding the roots in the past and dreaming big is essential to creating the future.
- It takes more than a village to raise a child: There is an African proverb that says, it takes a village to raise a child. Instead, the mantra to follow is, it takes more than a village. It takes a cross-sector, multi-stakeholder coalition to get big things done and big ideas to make a change. To get anything done, companies cannot simply think about their own model and technology; they need partners. Stakeholder capitalism is the only way we are going to save the planet because problems do not exist inside each of our buildings, they exist across. Some companies do not realise that. Uber is one of those companies, that did not understand stakeholders. Uber kept itself outside of any regulation and ignored the government. They did not even care about their consumers enough to respond with safety precautions when there were violent incidents were reported in India and the United States for Uber. Many countries have now shut Uber out. When companies don’t look beyond the obvious partners well outside their industry and their particular silo, they don’t get anything done.
- Kanter’s Law: Kanter’s Law is that everything can look like a failure in the middle. There is no human endeavour we start that does not hit bumps in the road at some point. There can be many bumps in the road. This pandemic is the biggest middle one can think of, a middle with no end in sight. When we hit the first obstacle, the first budget shortfall, the first unexpected crisis, the first ally or partner in your multi-stakeholder coalition that leaves, we have a choice between persisting and pulling out. If we pull out, it is a failure. If we keep going, if we pivot and are flexible, we can often turn it around and make it a success.
Some people, some leaders, and some organizations are not good at getting through the messy middle. They are the ones that are too rigid, have too much structure, too much investment in the way they are working, and have too many routines. They do not want to change them. They have too many layers of bureaucracy and leaders who simply do not want to change because change means admitting the way they did things in the past might not be working now. Leaders often find it extremely difficult to admit that they don’t know, but they need to admit. They also need to admit that the old way does not work anymore.
You also cannot get through the middles if you are too naive. If you have been stuck inside the building and have not looked at the world around you, have not seen alternatives and competitive threats, or the pandemic coming, you cannot get through the messy middle. Wuhan Motors in China, one of the first electric carmaker, was one of the first to close and one of the first to open again when the pandemic hit because they listened to their employees who said there was a bad sickness spreading. They listened, and they were not naïve, so they took in every source of information and they were able to brace themselves in time. In addition, persistence should also be accompanied by flexibility.
- The optimism of activism: We need organizations and leaders who are energizers, who are sources of hope for other people. The way we get that hope is by following the above mantras. First of all, we are connected outside the building. We do not just care about our own business or our own endeavour, but also about our communities. We are also engaged responsibly in our own countries and communities, which keeps us in the know about current events and we know where the allies and potential partners are. We have a purpose that keeps us going, and if we have a really big dream, it keeps us going no matter what. So, we count on our ideas, our collaborators, our partners, and our dreams. We cannot dream our way through a crisis, but we can think not only outside the building, but also beyond the crisis to what kind of a world we want to see, and how can we imagine our way into that world.
Stakeholder capitalism is the only way we are going to save the planet because problems do not exist inside each of our buildings, they exist across.
Stuart Crainer in Conversation with Rosabeth Moss Kanter
Stuart Crainer: What is the most crucial thing leaders need to unlearn going forward?
Rosabeth Moss Kanter: Arrogance. Success does not mean talking to people who reinforce how wonderful you are and never having to listen to anybody who disagrees, never having to say you don’t know. Leaders should get rid of arrogance, and start listening to the people. It is even better to listen to people who are really different from you, who might disagree.
Stuart Crainer: What is your big dream?
Rosabeth Moss Kanter: My big dream is to see a world in which more people are engaged in serving their country. I am a big advocate of national service in the United States and also in other countries. Service is the one thing our country could do to solve problems and make a difference. Get young people engaged in service, formal national service, civilian service, where they go into rural areas, conflict-torn areas, and they help. They tutor, they organize and they are trusted. They learn and they do it with other people that are different from them. National service is one strong point about America, which other countries can adopt as well.
Stuart Crainer: There is a lot of talk generally about the role of leaders, but how can employees strengthen their position? Do unions still have a role?
Rosabeth Moss Kanter: Unions have a bigger role, and we are going to watch a resurgence of unions because unions are going to come in not only thinking about wages and a lot of benefits that countries have in different portions, but they are also going to be the advocates for workers’ safety. If one thing could be predicted, it would be that employees will be more open to organizing. Also, gig workers and gig work will continue, but they will organize because those people are more open to organizing. It will be a different form. They might not be called associations instead of unions. We will discover again the joys of the cooperative. We will see neighbourhood businesses deciding that they need a cooperative for marketing. So, one thing that will happen is, employees will not have to think of themselves as just individuals. They can be part not only of work teams, but also of teams mobilized to improve conditions in workplaces and communities.
Stuart Crainer: If you were in an organization where the leaders are all talking about fighting for survival, how can you as a humble employee or a middle manager galvanize them to actually dream?
Rosabeth Moss Kanter: One thing that every employee can do at every level in every company is to start a book club. That is partly a joke, but not totally a joke. Book clubs are very big organizing forces. You can invite top managers to join you too and discuss something together. When you convene people in a benign way to discuss a topic of importance, that starts opening your minds to dreaming. So, you need sources of hope and you need to think beyond this.
We need to be thinking in at least two-time horizons, and maybe there is a third in the middle. We need the immediate crisis to time horizon; act fast, act with empathy, act decisively, and then at the third time in the middle, we need lots of fix-it teams that are reinventing the way we do business. Wuhan Motors in China invented a new way for people to test drive their cars using digital technology so that a protect a buyer could unlock the car digitally and never have to see a person. That is medium-term. In the longer term, discuss now topics of interest with your fellow or sister workers, colleagues, and invite top managers to join, but if not, have the book club.
Stuart Crainer: You have written about giants learning to dance. Do you now see the breakdown of corporate giants or a different kind of dance?
Rosabeth Moss Kanter: They should be doing a lot more rock dancing than they are. Some giants will survive, and for that, they have to be a lot more entrepreneurial. They have to partner with startups, they have to be open to new ideas. Companies like Verizon are trying to, but it gets very hard, because it is easy to ignore the start-ups. Companies think they have the money and they are smarter than the start-ups, so they stifle that very desire. But partnerships are happening, and we can think of it as associations rather than ownership. We do have to rethink ownership in a lot of ways. One of my former advanced leadership fellows is working on bringing broadband to rural areas in the United States with a bunch of partners, including electric co-ops in those communities, as well as big investors. If you are creative about new kinds of partnerships, you can get a lot of things done.
The giants have power, so we have to pay attention to them, but they are also those crumbling castles. If they don’t get outside on the streets and see what is happening around them and embrace it, they are going to totally crumble. In this pandemic, the giants that were already on a losing streak have no basis for coming back, bailouts aside. Those that have fresh thinking, new ideas and a workforce that they have treated well, will come back. It is because everybody watches now and everybody can see how you are treating your workforce.
Stuart Crainer: Is it time to make local world-class again?
Rosabeth Moss Kanter: Yes, but that doesn’t mean that we give up on global interdependence. If cheap is no longer our only value, if our value is quality and quality of life, we have many opportunities. We have to make local world-class education through digital broadband and no digital divide, so everybody can participate, and then they can be global and find something that makes their city, their community, and their local attractive to talented people so that they stay. One of our rural-urban divides in the U.S. is young, talented people are leaving rural areas because they are not sufficiently attractive in terms of jobs and places to live. We have to value the quality of life again and value local attractions.
Stuart Crainer: Can we make countries collaborate? If yes, then how?
Rosabeth Moss Kanter: Looking at the history, collaborations of countries have often fallen apart. For example, The League of Nations formed after the First World War fell apart and was followed by the rise of fascism. It is difficult to place hope on the collaboration of countries. My view is that countries should collaborate on specific issues. We have done a very good job of telecom interconnectivity. If we can find specific issues and something that is in the interest of the public as well as the companies, then we will have a good basis for collaboration. It is difficult to say if we should automatically support certain global institutions, but there does need to be some sense of global responsibility.
Stuart Crainer: Are there signs that stakeholder capitalism is winning?
Rosabeth Moss Kanter: There are signs. The Business Roundtable in the United States issued a statement signed by over 100 major corporate CEOs saying that board members could take into account the interests of customers, employees, the community, the public along shareholders. So, let’s not give up on shareholders. Many of us are shareholders; our pensions, our retirements are bound up in being shareholders, but that is a big sign. Certain leading companies and CEOs are also saying they are going to take it into account. The rest of the stakeholders aren’t going to sit still either, which could lead to bad press and a bad reputation. Trust is so low in the giants that the only way to bring it back is to show responsibility much more broadly.
Stuart Crainer: Do you think the virus will create a more open mindset among leaders?
Rosabeth Moss Kanter: I certainly hope so, but hoping is not enough. We have to keep sending the message because they are getting. Some very courageous CEOs have been taking courageous stances even before this, thereby sending the message across to their peers.
Gun violence is a huge problem in the United States. The CEO of Walmart, Doug McMillon, who had also been leading Walmart to be a greener company, got rid of a lot of guns and ammunition that were being sold in Walmart stores and took a hit in revenues because of it. He has been particularly concerned about workers in Walmart stores and their safety because those stores are still open. So, courageous CEOs will get a lot of credit and their peers see it. They all want to be recognized, and they want to have their legacy be a positive one, so they are surely getting the message.