Rosabeth Moss Kanter, best known for her books the Change Masters and Men & Women of the Corporation, has published another worthwhile book on corporate life based on interviews of over 350 key people at major corporations worldwide. Her main theory? That businesses which are agile, keeping ahead of the curve in terms of market changes and customer needs, are the businesses that are also progressive, socially responsible “human communities”. Kanter calls these successful companies “vanguard companies” because they use their unique strengths to provide innovative new solutions to a variety of societal challenges.
Kanter suggests that societal initiatives undertaken largely without direct profit motives are part of the culture that builds high performance and thus results, ironically, in profits. Future-oriented and focused on mission and vision, these companies fit the dictionary definition of vanguard, which is: “the forefront of an action, an example of change to come.”
Who are these vanguard companies? According to Kanter, vanguard companies include IBM, P&G, Banco Real, Cemex, Omron and many others around the world. Kanter’s in-depth research is portrayed with vivid stories of how the corporate culture, mission and values led these companies down unusual paths, from serving spearheading a grassroots community effort in order to launch a new product, to providing disaster management expertise in the face of crisis.
What types of things have these companies done which characterizes them as “vanguard” companies? Consider IBM. When the tsunami and earthquake struck Asia in 2004, IBM tapped its technological expertise and skilled people to create what relief and government agencies could not: information systems to effectively track relief supplies and reunite families.
How did IBM do this? Quickly! And with empowered IBM workers “on the ground” making decisions and taking action (not the CEO’s decision!). On the first day after the tsunami, two IBM workers in Chennai and Bangalore took the initiative to contact the IT Secretary of the Region of Tamil Nadu to offer their assistance. The Secretary said “yes, but I have no time to think how you can help”. Simultaneously, an IBM employee in the New York office of IBM’s Corporate Citizenship and Corporate Affairs department prepared a memo requesting the approval of IBM senior leadership to deploy significant technology and talent to relief and recovery efforts on the ground.
To make a long story short, in a very short period of time, IBM mobilized its’ IT expertise in a remarkably focused and fast effort, tapping IBM’s capabilities to accomplish something unique and sorely needed during the crisis. IBM employees who felt empowered to think for themselves and to act in accordance with IBM’s corporate values and culture, advocated for decisions that ultimately provided real value during a significant and overwhelming crisis. But this was not the first time IBM’ers had invoked IBM’s humanitarian values to garner support for a significant IBM role in the aftermath of a disaster. IBM had done it in Kosovo, after the terrorist attacks on 9/11 in New York, ad following the Gujarat earthquake the same year.
For many companies, doing something quickly and “outside the norm” comes as a result of the expansion of the companies into new markets or new geographic areas, or as a result of refocused strategic efforts to redefine or refocus the company’s mission. Sometimes, unexpected change comes in the form of a large scale “gesture” such as a corporate CEO-led change effort; other times it comes in the form of employees pointing to local problems needing attention.
Let’s look at one example which took shape in an alley in Sao Paulo, Brazil. In 2001, the headquarters of Banco Real in Sao Paulo was next to a filthy, abandoned alley, one of thousands of crime-ridden, drug-infested, garbage-filled alleys typical of Sao Paulo. Transportation problems such as traffic congestion and pollution as well as sky-high murder and crime rates, led to Banco Real officials to escort consultant Kanter to her meetings via helicopter, while providing security guards to meet her at the airport and transport her to the roof of the Banco Real building. They did not allow Kanter to step on pavement or walk anywhere near the alley next to their headquarters’ building.
Banco Real employees began to discuss whether to contact police about the dangerous alley or embrace the bank’s goals to effect change from the grassroots, engaging in their community, their customers, clients and stakeholders. Literally and figuratively, from the “ground” up, the bank invested resources to clean up the alley and the larger neighborhood with the involvement of its’ own employees. They created a garden, installed new pavement and lights, and installed two kiosks to employ teenagers from low-income families. The result? A safe and pleasant street next to Banco Real’s headquarters.
How does a Vanguard company quickly identify product improvements that customers both want and need? In the case of the theme of P&G’s Basico campaign (Basico can be translated into “basic” in English), figuring out how to improve products such as Pampers or disposable diapers led marketing manager, Juliana Azevedo to move in with a low-income family in Brazil with two babies. Juliana spent each day there, joining the family for breakfast, staying till dinner, helping change the babies’ diapers, bathing them and even taking them to their doctors’ appointments. She saw design problems with P&G’s diaper products “in action”, which later led to numerous successful design changes. The redesigned products prompted a significant increase in sales and market share.
Vanguard companies empower their employees to take action in ways which support the company’s mission, values and culture. They put business practices in place which meet employee’s needs for flexibility, work/family balance, and to create an organization which employees can believe in and contribute to on a daily basis. Telecommuting? Working from home once in a while? On any given day at IBM, forty percent of employees are working somewhere besides in an IBM office building. Want input into IBM’s strategic priorities which are many levels above your pay grade? Participate in a web chat, “Values Jam”, or “Innovation Jam”, (along with 150,000 other IBM employees, as was done with IBM’s Chairman, Sam Palmisano.
Ultimately, what types of leaders are found (or created) in Vanguard companies? At the end of the book, Kanter’s research reveals many insights about leadership in these types of successful, transformative companies. She suggests that the vanguard model of values-based humanistic leadership, as practiced by IBM and others in the book, becomes a necessity not just a choice. Leaders must turn their companies into forces for changing business and the world. Kanter proposes a list of “Ten Things Anyone Can Do to Be in the Vanguard” and describes five competencies of effective leaders in a vanguard organization. Kanter closes with an optimistic view that these vanguard companies serve as models of success in today’s global business environment
Named by the London Times as one of the “50 most powerful women in the world”, Rosabeth Moss Kanter is currently on the faculty at the Harvard Business School and is Chair of the Harvard Advanced Leadership Initative, offering innovative collaboration across business, education, government, law, and public health. Her many published works include best sellers such as Change Masters and Men and Women of the Corporation. Super Corp: How Vanguard Companies Create Innovation, Profits, Growth and Social Good by Rosabeth Moss Kanter was published by Crown Business, Crown Publishing group, copyright 2009.
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