Responsible Leadership in an
Unforgiving World
In a provocative new book, Joseph
Badaracco argues that our world is increasingly characterized by struggle—for
labor, technology, funds, and partners. Leaders who embrace that struggle can
also reap its rewards.
Struggle
is an experience we instinctively avoid, looking for any way to minimize the
hard work and pain involved in getting what we want. And yet—nearly every book
we read and movie we watch involves someone struggling mightily to achieve
their ends. Like them, we find that almost everything meaningful we achieve in
life comes with some form of struggle attached, and rarely do we pause long
after one struggle before we're on to the next. If Sisyphus ever were to
finally get the rock up the top of that hill, it's likely he'd soon be looking
for a bigger hill with a nicer view from the top.
It's
that paradox—that struggle can be both something to overcome on the way to
success and something to embrace for the meaning it gives our lives—that
motivated Harvard Business School Professor Joseph Badaracco to take a closer look at the concept of struggle in a
business context. He encapsulated the results of his inquiry in a new book The Good
Struggle: Responsible Leadership in an Unforgiving World, which deals head on with the growing management
complexities in the new economy.
“What’s going on now is a return to an
earlier more volatile form of capitalism, where there is a lot of turbulence”
Badaracco, the John Shad Professor of
Business Ethics, argues that, while market-based competition has been with us
as long as capitalism, companies have been insulated from it over the last
half-century by the growth of large companies supported by friendly
governments, domestic monopolies, and a lack of foreign competition. This is
the environment that allowed the GM's and IBM's of the world to grow, dominate,
and achieve previously unseen levels of corporate success.
"What's going on now is a return to an
earlier more volatile form of capitalism, where there is a lot of
turbulence," Badaracco says. Furthermore, the "new invisible
hand" of the markets is even more intense than the old one due to rapid
global dissemination of information.
Badaracco's vision suggests it's more
difficult to be a responsible leader today than a generation ago. But also more
rewarding.
PLUG-AND-PLAY MANAGEMENT
Badaracco started by researching the
experience of entrepreneurs-figuring that if anyone knew what it meant to
struggle it was those who started small businesses, half of which fail within
the first year. In the wake of the financial crisis of 2008, however, he began
to see that no company-no matter how large-was immune to failure, and that the
lessons he was learning from startups could be applied far more broadly.
"I realized it wasn't just small
companies who were fragile, and whose leaders were facing high uncertainty and
intense performance pressure," he says. "A lot of managers and
companies were."
Markets today not only control the
buying and selling of goods and services, they shape nearly every aspect of our
lives. Employees see themselves as individual brands, forever on the lookout
for new opportunities; home life has become an act of managing supply chains,
outsourcing housecleaning, childcare, and even grocery shopping to others; and
churches market themselves like fast food companies to potential parishioners.
In this world, success in business isn't
about creating large hierarchical organizations with huge factories—it's about
learning to combine and recombine dozens of "modules" both internally
and externally to achieve goals.
"What leaders are doing much more often
is creatively searching the world for talent, technology, and funds, and
assembling companies," says Badaracco. "It's plug-and-play
management, technology, and partnerships. Whatever you have assembled may not
last long, even if it's working."
The very nature of this new recombinant world
requires leaders to live constantly in the midst of struggle, Badaracco argues,
making leadership both more difficult and more rewarding than it was a
generation ago. If critical decisions in the last century were typified by an
all-or-nothing gamble on a new big new factory or business arm, then decisions
in this century are characterized by a constantly evolving set of commitments
to a number of fluid circumstances. At times, Badaracco argues, the most responsible
decision can be putting off the "big decision" as long as possible in
order to respond to an ever-evolving configuration of moving parts.
The measures of accountability are changing
as well. One need only look at the financial crisis to see how traditional
guardians of accountability—regulators and boards of directors—have failed to
keep up with the speed of the markets. In the new marketplace, leaders are
called upon more than ever to keep themselves accountable to the commitments
they make, to their employees, their investors, and their partners, knowing
that if they don't, then the market will punish them.
“If you don't appear to be making good on
those commitments, a lot of your key assets will go out the door”
"Those commitments are real and serious—morally,
personally, and maybe even legally," says Badaracco. "If you don't
appear to be making good on those commitments, a lot of your key assets will go
out the door."
That necessarily means that some
constituencies such as the environment or other causes traditionally associated
with corporate social responsibility may be outside the realm of what business
can properly be supposed to support.
"I am inclined to think that this
intense market pressure keeps most managers in most companies meeting what they
have committed to investors, customers, and other core groups," he says.
"It's easy for them to pay less attention to some constituencies that
aren't as well organized and can't contribute as directly to performance."
While Badaracco is clear that he is
describing, not endorsing, the reality of business today, he thinks it is more
honest for companies to clearly spell out their commitments, rather than
espousing the catch-all values statements of vague promises to make the world a
better place that most companies proffer.
"You've got to get beyond the values
laundry list, which for most companies comes down to them being committed to
everyone for almost everything," says Badaracco. "It's a waste of
trees—it's waste of electricity moving through the Internet."
CORE VALUES THAT COUNT
The core values companies should rightly
espouse, say Badaracco, fall into three categories.
The first is clarity: that is, not just being
transparent about your business practices, but being honest and upfront with
partners, customers, and employees about your commitments and goals—and, above
all, the hard problems and threats facing your organization.
Second, leaders need to champion
"meaningful projects"—not small contributions to some grand long-term
vision, but rather shorter-term projects with tangible goals that unite and
excite members of a team.
Finally, because intense performance pressure and
complexity can lead to ethical and legal violations, leaders have to draw
bright lines and let employees know they crossing them will bring 
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