Bridging the Gap Between Business and Humanity
In This Podcast
- Her dream for the future
- Reimagining Capitalism
- Why change in business is necessary
- Being a tree hugger
- Lessons from death
Rebecca Henderson is The John and Natty McArthur University professor at Harvard Business School, a research fellow at the National Bureau of Economic Research, and also a fellow of both the British Academy and of the American Academy of Arts and Sciences. Rebecca is an expert on innovation and organisational change. Her research explores how much the private sector can play a major role in building a more sustainable economy.
Business Reimagined with Rebecca Henderson
Rebecca Henderson represents an important balance between the private sector and building a more sustainable economy – a balance between sharp intellect, thorough knowledge of business and also deep humanity. Leaders need to tap into this, they need to look at deep humanity for guidance.
“I think it’s essential that we ground ourselves in who we are, whether we call it our faith, traditions, or spirituality, or simply a sense of who you are as a whole person, [and] really engage that as we think about the work that we’re all trying to get done.”
While life and work can be overwhelming, we have to remember that we’re all animals at the end of the day. And, says Rebecca, one of the biggest problems in our culture is this gap we’ve created between business and the rest of our lives.
We need to bridge this gap.
Rebecca Henderson’s dream future
Rebecca wants the world to address climate change and biodiversity. To learn to cherish Planet Earth – to realise the importance it plays in our long term survival. She wants to see an equitable world where we treat all employees with dignity and respect. She wants business and government to work in partnership – for business to be innovative and creative in creating jobs and products people actually need, and for the government to set the rules of the game.
She also hopes AI is our servant, not our master.
“AI could be one of the great boons to mankind. A huge augmentation of productivity and getting rid of all those junk jobs and freeing us up to do more productive things with our lives. [But] the danger is that AI is just another concentration of wealth and power in the hands of those who have access.”
Rebecca’s book, Reimagining Capitalism, is a wake up call. It’s about how we’ve failed to reimagine capitalism, so that it’s not only an engine of prosperity, but also a system that is in harmony with life, with the environment, and with the people in the system.
It’s a beautiful, practical guide on how change can take place, and is also filled with a lot of fascinating stories of companies that have made great steps towards this reimagined capitalism.
But it also details an extraordinary opportunity for business leaders who are willing to step up and deal with the great social problems we’re encountering – the environment, inequality and the tensions we have in the world.
There are two reasons why business should take this seriously: because your productivity and innovation will increase enormously if you do.
Young people want change
Young people in particular are very concerned about the kind of world we’re going to leave them. They want to work for a company that is creating value in the world, not just value for shareholders.
“Once you start thinking ‘we have to find a move away from [making money for shareholders]’, all kinds of opportunities open up. Strategic opportunities. But what also happens is that the way you run the firm changes, and the level of engagement and productivity and creativity increases enormously.”
And that’s not to say that young people don’t want to make money, we all need a decent wage, but nearly everyone wants to work for something more than money, says Rebecca. People want work that makes a difference, that they can contribute to.
When you have an authentically driven, purposeful company, the people who work in it start to trust one another. With a shared mission across all the silos in a business, the levels of trust go right up.
“There’s something about the top 10-20% of firms in every industry, that makes them much more productive. And we have very good data [saying] that it’s correlated with high performance work systems. What does that mean? Treating people with dignity and respect, high levels of communication, promoting people on the basis of real performance, not on the basis of numbers, and common commitment to the strategy of the company.”
So why aren’t there more firms stepping up to the plate and taking on a more border responsibility vis a vis the environment, inequality etc?
Why change is hard
Because, says Rebecca, big firms have trouble changing. Just look at Kodak and Nokia. Both refused to believe that big change was coming. Kodak didn’t believe digital photography was the future, and Nokia didn’t believe Apple was a serious threat. And so neither companies shifted the basis of their business.
Large firms get fat and stuck in their ways, says Rebecca. It’s very tempting to believe nothing is happening. That climate change, for example, is someone else’s problem. But most of the time, people are just too busy and don’t have the skills to deal with change.
“Firms get so overloaded. They’re so busy solving problems all the time, that there’s no time to step back and say, ‘Whoa, the industry is really changing, we should do something about it’.”
And while it is hard, says Rebecca, the advantage is that you get to be the first, you are the pioneer.
“[It] requires having a purpose beyond simply getting through the day or making money, because it’s tough, it’s emotionally tough turning to everyone who works for you and saying, ‘well, what’s your purpose?’”
Leaders who are nailing change
There are two kinds of leaders who are making change work, says Rebecca: the old fashioned ones who are very smart and can see the world is changing. And the ones who have a spiritual practice, a deep engagement with their community or family. They’re excellent leaders whose hearts are really in the right place.
These are people who can hold the tension while focussing on the bottom line, but also ask the big, existential questions about what the company is doing, and what it’s purpose is.
“I’m always a bit embarrassed about this, because I am a tree hugger, I really am. I love trees. I am in awe of the natural world. When I stand in front of a tree and look at it, it feels to me the most beautiful and amazing thing. And it reminds me that we’re all part of the world.”
We are all a sea of energy, bundles of electrons temporarily held together in a shape, and when we die, says Rebecca, we become a part of the rest of the world. Connecting with great trees is a way of connecting with that. We think we’re separate, but we’re not. In many places trees are dying. And if the great trees die, we’ll die too.
The transformational moments
“My father went bankrupt and my parents divorced when I was just graduating from university. I was like, Okay, I’m on my own. Let’s make a life here.”
The second transformational moment for Rebecca was when her first husband died. She came home from a business trip to find him lying on the floor.
“I learned so many things from his death, the first thing I learned was the obvious one, which was that I had not paid attention, that I had shared my life with an amazing human being. And I completely took it for granted.”
She also learned that we’re all going to die. We need to pay attention to what we do with our lives, because you can’t take it with you.
The importance of metrics
“I [wish I could] wave my wand and we would have environmental, social and governance metrics that measured material things that really had an effect on firm performance and impact that were auditable, and replicable and widely shared. And investors would be using them.”
It’s the only way to transform the entire economy, she says. It’s all good and well saying you’re going to be purpose driven, but if you don’t measure it, how will you know if you’re doing it successfully? How can you communicate what you’re doing to investors, customers and employees?
The other thing Rebecca would love to fix is the US political process. There’s so much disagreement and debate at the moment, and much change is needed – they need real voting rights, conversations around data and fact, and deep compassion for people who disagree with them.
Advice to leaders
“If you can, find a quiet place to stand or sit every day, I think you will find it transforms the quality of your life and your relationships.”
And also, says Rebecca, think hard about how we can drive the change we so desperately need right now. Our environment is under huge stress – climate change is real.
The world needs compassion, conversation, more empathy, more compassion, more time, less rage, and a price for carbon.
“I have this dream, that maybe 30% of business leaders understand the problems we face and why we need to act and they start acting. And my dream is that catalyses change across the entire society. These kinds of leaders can drive change far beyond their own firm.”
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