Introduction
In today's world, many people feel torn between pursuing a high-paying career and one that allows them to make a positive impact on society. However, a new type of company has emerged that combines both of these aspects. These "vanguard companies" are profitable businesses that also contribute to community projects, environmental protection, and promote universal values like trust, tolerance, and innovation.
Rosabeth Moss Kanter's book "SuperCorp" explores this new breed of socially conscious businesses and how they're changing the corporate landscape. This summary will delve into the key ideas presented in the book, showing how vanguard companies operate, why they're successful, and what sets them apart from traditional corporations.
The Rise of Vanguard Companies
A New Business Model
For years, corporations have been viewed as greedy and corrupt entities, often blamed for many of the world's problems. From environmental destruction to economic inequality, big businesses have frequently been cast as the villains in society's struggles. However, a new generation of companies is emerging with a different approach to business.
Vanguard companies represent a shift in corporate thinking. Unlike traditional businesses that focus solely on profit, these companies combine financial success with social responsibility. They're not non-profit organizations, but rather competitive businesses that use their business acumen to find solutions for social issues.
What sets vanguard companies apart is that being socially conscious is an integral part of their business practice. It's not just about making charitable donations (although that may be part of their strategy). Instead, these companies weave social responsibility into the very fabric of their operations.
Appealing to a New Generation
This new business model is particularly appealing to millennials – those born in the 1980s and 1990s. This generation is eager to prove that it's possible to earn a good living while also making the world a better place. They're not content with the idea that one must choose between financial success and social impact; instead, they believe these two goals can and should coexist.
Real-World Examples
One example of a vanguard company in action is IBM. The tech giant has a long history of helping communities recover from natural disasters. In 2004, when a devastating tsunami hit Indonesia, Sri Lanka, Thailand, and India, IBM employees took it upon themselves to provide technology that would expedite the delivery of relief supplies and speed up the recovery process.
This action wasn't mandated from above or part of a marketing campaign. Instead, it was a spontaneous response from employees who saw an opportunity to make a positive impact. This kind of initiative is characteristic of vanguard companies, where employees are empowered and motivated to use their skills and resources for the greater good.
Adapting to Change
Navigating Economic Turbulence
The 21st century has been marked by economic instability and rapid change. From the 2008 financial crisis to the ongoing technological revolution, businesses have had to navigate increasingly unpredictable waters. In this environment, vanguard companies have shown a remarkable ability to adapt and thrive.
One of the key reasons for their resilience is their focus on company culture. Rather than being thrown off course by external changes, these companies anchor themselves in strong values and a clear sense of purpose.
The Digitas Example
The digital marketing company Digitas provides an excellent example of this approach. When the dot-com bubble burst in 2001, followed by the economic aftermath of 9/11, Digitas saw its share price plummet from $40 to just 88 cents. In response, CEO David Kenny chose to focus on the aspects of the company that were reliable: its values and corporate culture.
Kenny implemented weekly voice mails to all employees, honestly addressing the market instability and its impact on the company. This transparent communication built trust and united employees, creating a sense of shared purpose in the face of adversity.
At the same time, Kenny worked on building strong relationships with tech giants like Microsoft and Yahoo. These alliances allowed Digitas to stay at the forefront of technological changes, even as the market fluctuated.
This dual focus on internal culture and external partnerships exemplifies how vanguard companies navigate change. By staying true to their values while remaining flexible and forward-thinking, they're able to weather economic storms that might sink less adaptable businesses.
Values-Driven Business
More Than Just Words
Many companies have mission statements that sound impressive but don't translate into real-world action. Vanguard companies, however, understand that actions speak louder than words. They don't just pay lip service to lofty ideals; they integrate their values into every aspect of their operations.
The Banco Real Transformation
The transformation of Banco Real, a Brazilian bank, illustrates how a focus on values can revitalize a struggling business. When new CEO Fabio Barbosa took over, he gave the bank a new identity centered on social and environmental responsibility.
This wasn't just a superficial rebranding exercise. Banco Real started by improving its own local environment, cleaning up the alley next to its headquarters in Sao Paulo. Employees volunteered to transform this neglected space into a bright garden with kiosks offering employment to disadvantaged young adults.
This project was just the beginning. Barbosa ensured that Banco Real's commitment to helping the community informed everything the bank did. From its lending practices to its internal operations, social responsibility became a fundamental part of the bank's identity.
The Competitive Advantage of Values
What's remarkable about this approach is that it led to a significant competitive advantage. When companies consistently live up to their stated values, they're recognized as trustworthy. This reputation attracts customers and investors alike.
In Banco Real's case, the results were clear. In the years following Barbosa's reforms, the bank's profits increased by 20 percent each year, far outpacing its rivals. This success demonstrates that doing good and doing well financially are not mutually exclusive – in fact, they can be mutually reinforcing.
Innovation Through Collaboration
The Imperative of Innovation
In today's fast-paced, competitive marketplace, innovation is not just desirable – it's essential for survival. Companies that fail to innovate quickly fall behind. However, vanguard companies approach innovation differently.
For these businesses, innovation isn't a pressure-driven necessity but a natural outgrowth of their mission to make the world a better place. Their commitment to positive change naturally leads to creative thinking and new solutions.
IBM's Educational Innovation
IBM provides an excellent example of how vanguard companies innovate in ways that go beyond their core business. In 1994, the tech company saw an opportunity to innovate in education. They partnered with K-12 public schools to develop technology that could address everyday educational challenges.
One result of this partnership was Watch-Me!-Read, a software tool designed to help children improve their reading skills. This project showcases how vanguard companies use their expertise to innovate in areas that may not directly relate to their bottom line but align with their values and social mission.
Procter & Gamble's Collaborative Approach
Procter & Gamble (P&G), another vanguard company, demonstrates how collaboration can drive innovation. When P&G's Brazilian branch, which specialized in feminine hygiene products, was struggling with low revenues, they turned to collaborative innovation for a solution.
Instead of relying solely on internal resources, P&G Brazil initiated a collaborative process that involved all departments as well as external partners like trade partners and advertising agencies. This inclusive approach led to an innovative packaging solution: transparent packaging with colorful wrapping inside.
By eliminating the outer packaging, they significantly reduced production costs while maintaining an attractive product. Within a year, this innovation led to substantially increased profits.
This example illustrates how vanguard companies leverage diverse perspectives to drive innovation. By breaking down silos and encouraging collaboration both internally and externally, they're able to generate creative solutions that benefit both the company and its customers.
Empowering Employees
Moving Beyond Industrial-Era Management
Traditional corporate structures, rooted in the industrial revolution, often emphasized rigid hierarchies and strict control over employees. While some organizations still operate this way, vanguard companies have embraced a more flexible and empowering approach to workforce management.
Flexible Work Arrangements
Vanguard companies recognize that one-size-fits-all work arrangements are no longer effective in today's diverse workforce. Instead, they offer flexible schedules and remote work options, allowing employees to find the work-life balance that suits them best.
IBM, for instance, allows 40 percent of its workforce to operate away from the office on any given day. Employees might work from a customer's location, while traveling, or from their own homes. This flexibility not only ensures that employees can work in the environment where they're most productive but also makes the company an attractive employer for a wide range of talent.
Trust and Responsibility
This flexible approach is built on a foundation of trust between managers and employees. By providing more freedom, vanguard companies entrust their employees with greater responsibility. Employees are expected to motivate themselves, perform well, and align their work with the company's mission for social change.
This trust goes both ways. When employees feel trusted and valued, they're more likely to be engaged, loyal, and committed to the company's goals. This creates a positive feedback loop that benefits both the individual and the organization.
Flattening the Hierarchy
Many vanguard companies have also moved away from traditional hierarchical structures, empowering employees at all levels with decision-making authority. This creates a more horizontal or flat chain of command.
The rationale is simple: progress can be hindered when employees have to wait for approval from multiple levels of management for every decision. Moreover, always deferring to higher-ups can lead employees to focus more on pleasing their managers than on what's best for the company as a whole.
By giving employees the power to make decisions, speak to customers on behalf of the company, and move projects forward, vanguard companies can operate more efficiently and responsively. This empowerment also fosters a sense of ownership and engagement among employees, who feel that their contributions truly matter.
Embracing Diversity
The Global Imperative
In today's globalized economy, diversity in the workplace is not just a nice-to-have – it's a business imperative. Vanguard companies recognize that a diverse workforce is crucial for understanding and operating in various cultural contexts around the world.
Understanding Different Perspectives
Vanguard companies go beyond simply hiring a diverse workforce; they actively work to foster understanding and respect for differences among their employees. This diversity awareness is crucial for smooth collaboration and helps the company function as a cohesive unit despite individual differences.
For example, when Banco Real transformed into a vanguard company, they formed a "diversity committee" and held events to highlight the differences among their employees. At one such event, employees were asked to write a descriptive adjective on their name tags, such as "goofy" or "anxious." This simple exercise made it clear that each person was unique, encouraging employees to see and appreciate the diversity within their own ranks.
Preparing for New Markets
Understanding diversity is also crucial when entering new markets. Instead of sending an all-American team to expand into countries like India or China, a vanguard company would reach out to these communities and hire people familiar with the local market before expanding.
This approach helps companies avoid cultural missteps that could damage their reputation or hinder their success in new markets. By valuing diverse perspectives, vanguard companies are better equipped to navigate the complexities of a global business landscape.
The Power of Purpose
Aligning Profit and Social Good
One of the most distinctive features of vanguard companies is their ability to align profit-making with social good. They demonstrate that these two goals are not mutually exclusive but can actually reinforce each other.
Creating Shared Value
Vanguard companies operate on the principle of creating shared value. This means that they seek out business opportunities that not only generate profit but also address social or environmental issues. By doing so, they create value for both the company and society at large.
For example, when Unilever developed a new handwashing campaign in India, they weren't just trying to sell more soap. They were also addressing a serious public health issue. By educating people about the importance of handwashing and making soap more accessible, they improved public health while also expanding their market.
Attracting Talent and Customers
This sense of purpose gives vanguard companies a significant advantage in attracting both employees and customers. Many people, especially younger generations, want to work for and buy from companies that stand for something beyond just making money.
When a company has a clear and compelling purpose, it can inspire employees to give their best effort and attract customers who share its values. This creates a virtuous cycle where purpose drives performance, which in turn reinforces the company's ability to pursue its purpose.
Building Trust
The Currency of Business
In an era where corporate scandals regularly make headlines, trust has become a valuable currency in the business world. Vanguard companies understand this and make building and maintaining trust a top priority.
Transparency and Accountability
One way vanguard companies build trust is through transparency. They're open about their operations, their challenges, and their mistakes. When things go wrong, they take responsibility and communicate clearly about how they're addressing the issue.
For instance, when Procter & Gamble discovered that one of its suppliers in China was using child labor, the company didn't try to cover it up. Instead, they publicly acknowledged the problem, terminated the relationship with the supplier, and implemented stricter monitoring processes. This honest approach, while initially painful, ultimately strengthened the company's reputation for integrity.
Consistent Values
Trust is also built through consistency. Vanguard companies don't just talk about their values – they live them every day, in every aspect of their business. This consistency creates a track record that stakeholders can rely on.
For example, Patagonia, the outdoor clothing company, has built a strong reputation for environmental responsibility. They don't just make eco-friendly products; they also encourage customers to repair rather than replace their clothing, even if it means selling fewer new items. This consistent commitment to sustainability has earned them a loyal customer base that trusts the brand implicitly.
Challenges and Criticisms
Balancing Profit and Purpose
While the vanguard company model offers many benefits, it's not without its challenges and critics. One of the main challenges is balancing profit with purpose. There can be times when these two goals come into conflict, and companies must navigate these tensions carefully.
Accusations of "Greenwashing"
Some critics accuse vanguard companies of "greenwashing" – using social responsibility as a marketing ploy rather than a genuine commitment. While this can certainly happen, true vanguard companies distinguish themselves by integrating their values into every aspect of their operations, not just their public relations efforts.
Measuring Impact
Another challenge for vanguard companies is measuring their social impact. While financial metrics are well-established, quantifying social and environmental impact can be more complex. Companies are still developing tools and methodologies to effectively measure and communicate their non-financial performance.
The Future of Business
A New Paradigm
The rise of vanguard companies represents a shift in how we think about the role of business in society. Rather than seeing profit and social good as opposing forces, these companies demonstrate that they can be mutually reinforcing.
Spreading the Model
As more companies adopt this approach and demonstrate its success, it's likely that we'll see the vanguard model become increasingly mainstream. This could lead to a business landscape where social responsibility is not just a nice-to-have, but a fundamental part of how companies operate.
Challenges Ahead
However, the path forward is not without obstacles. As vanguard companies grow and face increasing pressure from shareholders, maintaining their commitment to social good may become more challenging. Additionally, as more companies claim to be socially responsible, consumers may become more skeptical, demanding ever-greater proof of impact.
Conclusion
"SuperCorp" presents a compelling vision of a new kind of business – one that combines profitability with social responsibility. Vanguard companies like IBM, Procter & Gamble, and Banco Real demonstrate that it's possible to do well financially while also doing good for society and the environment.
These companies succeed by putting their values at the center of everything they do, fostering innovation through collaboration, empowering their employees, embracing diversity, and building trust with all their stakeholders. While they face challenges, their approach offers a promising model for the future of business.
As we move forward, the lessons from vanguard companies offer valuable insights for any organization looking to thrive in the 21st century. By aligning profit with purpose, businesses can create value not just for shareholders, but for society as a whole. In doing so, they may just redefine what it means to be successful in the world of business.