28 Oct 2013  Research & Ideas

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 serious or severe consequences.

Taken as a whole, these guidelines aren't easy for leaders to follow. But, Badaracco argues, those who do will reap more lasting satisfaction from their work—not in spite of this struggle, but because of it.

"Leaders are motivated by having a good life, but it's surprising how many people who could kick back and watch things from the deck of the boat don't," he says. "They like creating, building, trying, experimenting, partly because it's fun, partly because hard work tells them what they are doing is important. The struggle is part of who they are."

About the author

Michael Blanding is staff writer at Harvard Business School Working Knowledge.

Comments

    • Alina B. Wreczycki

    Thank you for your article Mr. Blanding. Its title "Responsible Leadership in an Unforgiving World", which corresponds with the second part of Prof. Badaracco's book titled "The Good Struggle: Responsible Leadership in an Unforgiving World", inspired my curiosity. The content of your article interwoven with excerpts from the book and the fashion in which your interpretation of the book relates to Prof. Badaracco's work inspired my response. Please kindly note that I am a Philosophy Doctor in Organizational Leadership candidate at Regent University School of Business & Leadership. While I could write an article on what "responsible leadership" means to me and how I intend to emanate it, I will narrow my focus on placing "responsible leadership" in the context of an "unforgiving world".

    I appreciate Prof. Badaracco' s argument that "our world is increasingly characterized by struggle". However, let us be clear that by virtue of the Darwinian Theory of "survival of the fittest" we have not only been conditioned to perceive our world as an unfriendly environment not conducive to peaceful cooperation of all of its occupants, but we have actively contributed in the creation of an unforgiving world. Moreover, our children are now being introduced to the fruit of our creation with exponentially evolving technology, moving production lines and ideas across borders, time-zones and continents, electronic banking, 24/7 work schedules, etc. Collectively, we have created a fast-paced amalgamation of a global environment - a hybrid of numerous cultural and ethnical influences that are expected to fit us all like a one-size fits all T-shirt - but it does not. Collectively, we have created an environment in which instant gratification supersedes long-term planning and investmen t in ourselves as leaders, members of our societies, and global citizens as well as those who are morally responsible for the care of our environment. While our instantaneous technology crosses boarders, time-zones, and continents, there is no global action to act to creatively and effectively respond to its speed and impact to affirm life in our global community in peace and dignity for all. This quest for instant gratification is especially prevalent in the Western culture as the very tenets of the Darwinian Theory of "survival of the fittest" migrate across boarders and continents along with production lines and ideas to amalgamate with the Eastern culture and impact the Eastern culture in a way that is not consistent with its core values. Contrary to the opinion that we "instinctively avoid struggle looking for any way to minimize the hard work and pain involved in getting what we want", there is mounting scientific evidence proving that we are wir ed to use our higher brain due to the fact that ninety percent of our cortex is neo-cortex facilitating natural and life affirming amalgamation of our instinctive and emotional brain functions with our intellectual capacity, rationality, self-awareness, and intuition (Chopra & Tanzi, 2012, p. 152). Endowed with these tremendous gifts, why do we allow "today's markets to not only control the buying and selling of goods and services but to shape nearly every aspect of our lives"? Why with these unparalleled gifts have we delegated the orchestration of our lives to an auto-pilot and as Fredrick Nietzsche argued why is "Man the only animal who has to be encouraged to live"? The answer, in my opinion, is not complex. There is not a sufficient level of global leadership to encourage us to use our higher brain functions to its maximum potential. We use our lower subconscious brain functions in a herd-like mentality and constantly get influenced by opinion s of others that instant gratification is the purpose of our life and obtaining some token of appreciation at all costs gives our life meaning, if only temporarily.

    While I could cite many an example that such a quest does not explain the purpose of our existence and does not substantiate its meaning, I must emphasize the paramount role of parenting to make our children aware of their free will and how they can exercise it to enrich their lives to become global citizens. While "every book we read and movie we watch involves someone struggling mightily to achieve his or her ends" (which conveys egoism), the paramount question here is why do we read those books and why do we watch those movies? Surely, there are numerous publications on the market that depict humans as embracing challenges for the purpose of bettering themselves and to uplift the entire humanity. Also, there are a lot of people in this world who either do not own a TV or know how to switch to anoth er channel or to use the "off" button to not subject their nervous systems to negative stimulus.

    I respectfully disagree with the extrapolation of Sisyphus' mission from the Greek Mythology. Let us not forget that Sisyphus was deprived of an option to finish the task of pushing the rock to the top due to an act of deceitfulness. We tend to easily forgive and forget such infractions in today's "unforgiving world" and then complain about the world's condition without the willingness of taking ownership for the state of the world's affairs. One could certainly argue that perhaps Sisyphus appreciated the task of pushing the rock up the hill as his atonement and was not interested in beautiful vistas because the task served as eternal punishment for his infraction; therefore, he had no other prospects. If I was to substitute the task of "pushing the rock up to the top of that hill" to our daily dedication of leading meaningful lives on purpose while inspiring others to do the same, Sisyphus' task would be perceived differently in the context of "responsible leadership". While I agree that our lives are paradoxical, we are free to choose how we perceive our "pushing the rock up the top". While, according to Prof. Badaracco, the transformation of our global environment may be perceived as "an earlier more volatile form of capitalism" marked by a lot of turbulence, we are free to choose how we perceive the transition and how we react to it. We cannot expect to learn how to be accountable without discovering the meaning of our life and nourishing it to share it with the global community. The quest for our life's meaning is our inalienable right that not only defines who we are as humans but establishes our moral compass and provides direction for ethical decisions that impact us as individuals, members of families, societies and the global community.

    While I wholeheartedly agree with Prof. Badaracco's core values of clarity/transparency, championship of meaningful projects, and ethical behavior, I must emphasize the need to transcend and transform the role of leadership. While it was appropriate to foster the top-down leadership a decade ago or so, this is no longer an effective leadership campaign to transcend and transform an "unfriendly world" into a global environment of mutual and peaceful cooperation. It is our moral obligation as global citizens to "ask not what the global community can do for us but what we can do for the global community" by "being the change we wish to see in the word".

    I have recently polled answers on Servant Leadership via the Servant Leadership Assessment Instrument (Dennis, 2004) that provides insight on the Servant Leadership characteristics such as Agapao love, Empowerment, Vision and Humility. The Agapao love characteristic measures the degree to which a servant leader demonstrates meaning and purpose on the job where employees have the ability to realize their full potential as a person and feel like they are associated with an ethical organization. The servant leader is forgiving, teachable, shows concern for others, is calm during times of chaos, strives to do what is right for the organization, and has integrity. The Empowerment characteristic measures the degree to which a servant leader empowers information to others, positive emotional support, actual experience of task mastery, observing models of success, and words of encouragement. The servant leader allows for employee self-direction. Leaders encourage professional gr owth. The leader lets people do their jobs by enabling them to learn. The Vision characteristic measures the degree to which a servant leader incorporates the participation of all involved players in creating a shared vision for the organization. The servant leader seeks others' visions for the organization, demonstrates that he or she wants to include employees' visions into the organization's goals and objectives, seeks commitment concerning the shared vision of the organization, encourages participation in creating a shared vision, and has a written expression of the vision of the organization. The Humility characteristic measures the degree to which a servant leader keeps own accomplishments and talents in perspective, which includes self-acceptance, and further includes the idea of true humility as not being self-focused but rather focused on others. The servant leader does not overestimate his or her own merits, talks more about employees' accomplishments rather t han his or her own, is not interested in self-glorification, does not center attention on his or her accomplishments, is humble enough to consult others to gain further information and perspective, and has a humble demeanor.

    While I have ascertained that age, gender and generation played no statistically significant role in impressive scores, I am clearly aware of the limitation of my study based on its small population sample. However, what the study communicates to me is the growing need for purpose and meaning in our lives that leaves the corporate realms and transcends our perceived boundaries of boarders, cultures, ethnicities to participate in creating an environment of individuals who foster their core values with balanced egos in a peaceful, life affirming fashion while respecting and honoring the core values of others to enrich our community and birth a friendly, all inclusive, and prosperous global community.

    Living fully: Nourishing the Servant Leadership - Alina B. Wreczycki, PhD in Organizational Leadership candidate at Regent University School of Business & Leadership.

    References

    Chopra, D. & Tanzi, R. (2012). Super Brain: Unleashing the explosive power of your mind to maximize health, happiness, and spiritual well-being. New York, NY: Harmony Books.

     
     
     
    • Shann Turnbull
    • Principal, IntInternational Institute for Self-governance

    The very concept of leadership needs to be re-considered when "success in business isn't about creating large hierarchical organisations with huge factories - it's about learning to combine and recombine dozens of 'modules' both internally and externally to achieve goals". This describes what I call "network governance" as practiced by highly successful and sustainable stakeholder controlled firms. Examples are The John Lewis Partnership in the UK, VISA International Inc in the US and firms located around the town of Mondragon in Spain.

    In stakeholder controlled firms, their figureheads become servant leaders not authority figures. Decision-making is collective in the nested network of firms based on "dozens of 'modules" both internally and externally" as found in the Mondragon system. Network governed firms introduce distributed intelligence to simplify complexity. In this way the physiological and neurological limits of humans to receive, store, process and communicate data can be overcome. Figureheads are no longer exposed to "intense performance pressure and complexity". Responsibility becomes collective.

    This means that success in business becomes critically dependent on "learning to combine and recombine dozens of 'modules' both internally and externally". However, I am not aware of any schools of business that teach this knowledge of how to become a "governance architect"? University education seems to assume that organisations exist only as hierarchies rather than as networks.

    One advantage is that distributed governance with checks and balances can be used to remove systemic unethical conflicts of interest in hierarchies and provide creditable processes for managing those that are not systemic.

     
     
     
    • Shann Turnbull
    • Principal, IntInternational Institute for Self-governance

    Because the complexity of business and its environments are increasing so rapidly the current concepts of leadership is reaching its use-by-date. This conclusion is based on the fact the physiological and neurological limits of the human brain to process complexity is making it impossible for leaders to knowledgeable identify either future directions or how to get there.

    The idea of "transient strategic advantage" can also be rephrased more cynically in management jargon a "strategy of programmed flexibility". A one eyed priest who founded the nested network of network governed firms around the town of Mondragon in Spain described this simply half a century ago as: "we build the road as we travel".

    Conventional ideas of leadership in the Mondragon stakeholder controlled firms have little meaning as each firm, each group of firms and the whole system is governed on a collective basis. Network governance may have figureheads but not authority figures. Any figurehead becomes a servant leader of the workers and other stakeholders who elect them. Network governance allows complexity to be simplified to within the data processing limits of humans. The organizational architecture of Mondragon allows ordinary people without an MBA to achieve extraordinary results.

    The increasing complexity of business means that the Harvard Business School mission statement is also reaching its use-by-date. The HBS mission is to "To educate leaders who make a difference in the world". The current statement should be donated to the Kennedy School of Government because it does not mention business or the role of business in society. The mission statement is also embarrassing as Mao, Hitler and Stalin are leaders who made "a difference in the world". A new statement is required to identify a positive role for business in society like: "To create and spread sustainable prosperity". It is also four words shorter.

    Such a statement would not fit the Kennedy School, Mao, Hitler or Stalin, but it would allow leaders to be electable even if they only became figureheads. It would require HBS to research and teach how managers can become "governance architects" to simplify the complexity of business and its environment as achieved at Mondragon. The operating advantages of designing and implementing network governance in the public, private and non-profit sectors are set out in my posting here: https://docs.google.com/document/d/1c9gt9jsSL7i-JovneNfFiGjvxcj2V8Jz98Ku461aHmk/edit?pli=1

     
     
     
    • Alina B. Wreczycki

    Thank you for your posts Dr. Turnbull and the opportunity to become familiar with your article. While I agree that the complexity of business is growing exponentially in response to its evolving environments, I respectfully challenge the notion that "the current concept of leadership is reaching is use-by-date" on the basis of leadership not being a static entity but an "organic" and also rapidly evolving phenomenon. In Leadership for sustainability: An Evolution of leadership ability, Metcalf and Benn (2013) examine the existing differences in perceptions over the various leadership styles that influence implementation of corporate social responsibility/sustainability in organizations. Based on their research, Metcalf and Benn ascertained that the real issue is the complex nature of sustainability rather than business complexity. They also argue that organizations are complex and adaptive systems operating w ithin broader complex adaptive systems, making the task of interpreting just in what ways an organization is to be sustainable, an extraordinary demand on leaders. Therefore, leadership for sustainability calls for leaders with extraordinary abilities who can effectively navigate complexity and translate its components to engage others and secure their cooperation by imparting emotional intelligence to lead adaptive organizational change. Contrary to the opinion "humans are governed by their brains", we use our brains to evolve via our intentions (Chopra & Tanzi, 2012, pp. 12-25). Moreover, the British neurologist Dr. Lorber and the American neuroscientist Dr. Merzenich proved that regardless of the size of our brains "neurons that fire together wire together". Based on our heart rhythm, we have the ability to design our feedback loops and make a difference in the use of our brain. Contrary to the opinion, there are no physiological and neurologic al limits of our brain to process complexity since our brains contain over one hundred billion neurons and up to a quadrillion synapses to project axons and dendrites long enough to wrap around the Earth over four times. The only brain limitation is the perceived barrier of our thinking that combined with our emotions store in our subconscious to control us since the majority of our daily thoughts are from our subconscious unless we design new feedback loops to overwrite our subconscious. Hence, neuroscience places so much emphasis on neuroplasticity to teach us to remap our neural networks via compensatory regeneration. There is no need to engage the emotion of cynicism to rephrase the idea of "transient strategic advantage". All we need is to engage in system thinking to adapt to new conditions while we navigate our travel. Sometimes, there is not even a need to build a new road if all we need is to transit quickly. While I agree that "network governanc e with figureheads as servant leaders allow us to simplify complexity", we must remember not to serve the one-size fits all "simplified complexity" because of our diversified ways of processing complexity based on the use and evolution of our brains.

    I do not know on what basis the assertion of "the Harvard Business School's mission statement is reaching its use-by-date". Moreover, I respectfully challenge the idea that "HBS should donate its mission to 'educate leaders who make a difference in the world' to the Kennedy School of Government because it does not mention business or the role of business in society". How would we even begin to explain the role of business in our rapidly evolving global community without risking limiting the phenomenon sensitive to our evolution in times where the role of business in the global community is changing rapidly in response to the rapidly changing global community as we evolve in it as well? As leaders, we have the ability to change the framework of business and translate it to those who process the world at a different level of complexity. While I was not able to locate the mission statement cited on HBS' website, I came across Dean Nohria's words: "This must be where the world's best thinking about business and management takes place." By engaging in neuroplasticity (id est follow Gerald Edelman's advice on exercising the number of possible neural circuits in the brain as 10 followed by a million zeros regardless of our metric age), we can create in our brain the capability of our thoughts, emotions, feelings, and actions to develop in any direction we choose (Chopra & Tanzi, 2012, p. 45). Surely, there are other and more effective ways to communicate our perceptual differences on HBS' mission without dispensing with a static comment that "HBS' mission statement is embarrassing" in the context of controversial historical figures of Mao, Hitler, and Stalin as "leaders who made a difference in the world". Moreover, based on Yeung's Application of six sigma and quality management ideas to the development of business schools mission statements: A content analysis (2013), business schools forgo th e traditional way of forming their mission statements (by faculty members only) in favor of engaging their faculty members and managers in system thinking and quality management to comprehensively measure and validate their mission statements in response to the dynamic global business environment. Perhaps as servant leaders endowed with purpose, meaning, positive emotional support, etc. we can allow HBS' faculty members and managers to create and adjust HBS' mission in response to rapidly changing global environment by exercising our ability to navigate chaos with calmness and our position of being teachable?

    References Chopra, D. & Tanzi, R. (2012). Super brain: Unleashing the explosive power of your mind to maximize health, happiness, and spiritual well-being. New York, NY: Harmony Books.

    Metcalf, L. & Benn, S. (2013). Leadership for sustainability: An evolution of leadership ability. Journal of Business Ethics, Vol. 112, pp. 369-384.

    Yeung, S. (2013). Application of six sigma and quality management ideas to the development of business schools mission statements: A content analysis. International Journal of Management, Vol. 30, No. 2, Part 1, June 2013.

     
     
     
    • Shann Turnbull
    • Principal, INTERNATIONAL INSTITUTE FOR SELF-GOVERNANCE

    Thank you Alina for your challenging response to my posted comments above. It allows me to expand upon them. This could assist other readers to appreciate how network governance can provide operating advantages and also why the HBS mission statement is reaching its use-by date. Readers should be made aware that my second posting was written first. It was a response to the question raised by Professor James Heskett on October 2 in his "Working Knowledge" page located at http://hbswk.hbs.edu/item/7282.html. Heskett asked his readers: "Is Leadership an Increasingly Difficult Balancing Act?" Apparently I responded too late to be included in his discussion and so my posting was transferred to this web page to make it slightly out of context.

    As you state that you are "a Philosophy Doctor in Organizational leadership candidate" I very much respect your concerns about my comments. My comments not only question the importance of your research but also infer a career based on them could be diminished. I expect resistance and challenge to my comments could be considerably greater from Professors teaching leadership, consultants and other gurus. This makes it important to respond to the points you raise.

    The research you cite by my fellow Australians Metcalf and Benn does not appear, for the reasons stated below, to be inconsistent with the article Michael Pirson and I published two years earlier in the same journal. Hierarchical organizations do indeed introduce as you state "extraordinary demands on leaders". Network governance mitigates this problem by introducing distributed intelligence, control and communications. This reduces and simplifies data processing demands on individuals be they leaders in a hierarchy, supplemented by networks, or figureheads and servants in a network.

    There are four points you raise that need a response: 1. I do not understand why you report that Metalf & Benn "ascertained that the real issue is the complex nature of sustainability rather than business complexity". Either way complexity remains the problem. So either way network governance provides a way to mitigate the problem as set out my web page cited at the end of my last posting.

    1. Nor do I understand how you can hold a contrary opinion to my statement that "humans are governed by their brains". Are you suggesting that persuasive leaders become some sort of hypnotists that can somehow override or bypass the brains of their followers?

    2. Scientific evidence for refuting your claim that "there are no physiological and neurologic limits of our brain to process complexity" is provided by Peter Cochrane, the former head of the research department of British Telecom and MIT scientist Ray Kurzweil who holds patents in voice recognition technology. Cochrane measured in bytes per second the physiological limits of humans to obtain data from their environment by their five senses of smell, taste, touch, sound and sight. Kurzweil (1999: 103) reported that the ability of the human brain to sequentially process bytes was only around 200 calculations per second. This compares with millions of calculations per second of desktop computers. However, the human brain can outstrip desktop computers in pattern recognition because of its network architecture introduces massively parallel computations. The pattern recognition capability of our brains explains the value of the case method for teaching business. It allows student s to learn through the pattern of experiences of others. It also supports the adoption of network governance to improve the ability of firms to identify and respond to risks and opportunities.

    Practical common sense evidence of the limited ability of managers to cope with complexity is provided by the universal practice of mangers limiting their span of control over sub-ordinates.

    Your research will need to engage with the extensive literature on "bounded rationality" supported by Nobel Prize wining economist Oliver Williamson. Williamson (1975: 21) explains that it "involves neurophysiological limits". Williamson (1979: 99) in note 4 states "but for the limited ability of human agents to receive, store, retrieve and process data, interesting economic problems vanish". In his 1985 book (p. 283) he stated: "the problem of organization is precisely one of decomposing the enterprise in efficient information processing respects". In other words the adoption of network governance is required, as Nature has adopted for our brains.

    The evidence and literature cited above could make it difficult for your PhD examiners to accept your statement: "The only brain limitation is the perceived barrier of our thinking?" 4. Thank you for inviting me to explain why I believe that the HBS mission statement is reaching its use-by date. Let me begin my explanation by working backwards from latter in this century when the United Nations believes that global population growth could stabilize. Already 20 advanced industrialized countries have declining populations. A declining demand for MBA graduates can be expected in these prime countries for MBA education. The role of managers will also change from generating growth to maintaining and spreading prosperity on an environmentally sustainable basis. An extreme example is Japan whose population is expected to decrease by over 20% reversing economic growth to create ghost suburbs that become over serviced by long life infrastructure investments. The above considerations provide a basis to respond to your question: "How would we even begin to explain the role of business..?". The considerations note above means that the role of business would be forced to change from maximizing profits and growth to spreading prosperity and improving the quality of life on a sustainable basis in an ever-increasing complex world. As the quality of life and its sustainability becomes a critical social and political imperative so will the need for business to change its role. Such changes are likely to be reinforced by concerns over depleting non-renewable resources, climate change and the sustainability of humanity on the planet. The purpose and form of business directly affects the quality of life. Command and control hierarchies reduce the quality of life for both employees of organizations and the stakeholders on who organizations in the private, public and non-profit sectors depend for their existence. Employees are required to be subservient to the few while a multiplicity of stakeholders become alienated from organizations that affect the quality of their life. Network governance mitigates these problems while providing an economic, efficient and efficacious basis to sustain operations in complex environments. If HBS does not provide leadership in adapting the purpose and form of business, then other institutions could emerge to provide leadership in this regard. A starting point would be to adopt a mission statement along the lines of: "Providing an education to create and spread sustainable prosperity".

    I shared my concerns about the current HBS mission statement with Dean Nohria after he presented it to the June reunions this year. I was very heartened by the Dean changing his language the following day when he addressed my 50th reunion class to repeat a number of times the need for making the world a better place.