George Serafeim | Harvard Business School - Oct 09 2018
4 Ways Managers Can Exercise Their 'Agency' to Change the World

New business school graduates have now made their way from campus to workplace. For them, this should be a time of optimism and energy, of setting ambitious goals and testing new ideas. At Harvard Business School, where I teach, many of these passions and ideas revolve around ways to harness the power of business to address some of society’s most significant problems, not as a separate part of employees' lives -- businessperson by day, volunteer by night -- but as an integrated whole, working in a profitable company that also does the world good.

That said, I've observed some pessimism among graduates aiming for both success in business and beneficial impact on the world around them. They have come to believe that one can either succeed in business or enhance society -- by expanding economic opportunity or by improving public health, for example -- but not both.

In sociological terms, they feel a lack of "agency," a sense that only the highest rank of management can effect positive social change from within a business. Ironically, an increasing number of C-suite executives, including former Starbucks CEO Howard Schultz, are leaving their companies to pursue social-good projects. Even they feel a lack of agency within their organizations.

Thus, we face two groups on different ends of the career spectrum with a shared belief in their powerlessness. It would be tragic if their pessimism were on target. Thankfully, it’s not because it’s rooted in two false assumptions.

The first is that profit and social good are antithetical. It's easy to understand why people think that way, especially with companies like Volkswagen (VW), Wells Fargo, and Cambridge Analytica getting enormous visibility for their profit-over-all-else methods. Yet pursuit of social good can be a powerful, proven business tactic. For every newsworthy instance of a corporation putting profit ahead of social good, there are multiple unheralded examples of companies using social good-oriented initiatives to expand their markets or enhance their profit-making abilities.

These companies have created new business opportunities by identifying societal problems that align with -- or become part of -- the firm’s operating strategy. For example, while VW was scamming emission control testers, General Motors was moving toward its vision of zero emissions and zero accidents by investing in electrified, shared, and autonomous vehicles. And while Wells Fargo was creating fraudulent accounts, Bank of America Merrill Lynch became a leader in underwriting green bonds that finance projects to fight climate change. More recently, JPMorgan Chase made a major effort to improve the economic vitality of Detroit.

The second false assumption is that lower and middle managers cannot help their companies explore the profit potential of social good. That's something they believe is better left primarily to C-suite executives.

C-suite authority does provide access to one kind of agency, the freedom to act in the realm CEOs manage. But CEOs do not suddenly wake up and commit to activities that drive organizational resources to provide solutions to societal challenges. Their employees provide them with ideas, solutions, information, and energy that feed into their decision-making processes. Over the years, I've witnessed my own students convince senior executives to improve labor practices in the supply chain and workplace that end up improving productivity and creating new products that serve previously underserved parts of the population.

So, how does a person -- whether the newly employed graduate or the experienced executive -- exercise his or her latent agency to bring profit-making and social good together in a company? In my research I have identified four keys to achieving this goal:

  • Do your research and demonstrate to yourself that there is strong evidence that creating strategically planned social impact can enhance your company’s success.
  • Use your professional skills to identify an opportunity for simultaneously addressing a company challenge and responding to a social need, then develop the case for pursuing this opportunity.
  • Be pragmatic, not just idealistic. Transformational solutions are appealing, but they can leave people overwhelmed by the size of the problem. Incremental work, on the other hand, allows you to gather collaborators step by step and avoids all-or-nothing situations.
  • Build buy-in, recognizing that offering rational argument and inspiring passion are both essential for gaining and maintaining momentum. And develop upward lines of communication that make their way, incrementally but persistently, toward decision makers.

A sense of a lack of agency, if allowed to fester, is the cancer of leadership, bringing with it a cynicism about others’ efforts to do well and do good that in turn reinforces a sense of impotence in improving the world around us.

In the face of today's many messy problems, businesses cannot hide behind their walls, but must strive to help find solutions. It's the managers who have learned to exercise their "agency" at every level of a company who will be in the best position to do their job and achieve great things for their organizations and beyond.

This article originally appeared on Harvard Business School Working Knowledge and was republished with permission.