"Through sports, we have the power to change lives". That belief was oft-repeated in the hallways when I worked at adidas. At strategy meetings and employee town halls, we talked about channeling movement and fitness to enable others to live better, and through the business, protect the environment for sports to be played in the future.
I wondered what does changing lives meant. Is it supporting someone else to change their diet and fitness? Is it enabling someone to have gainful employment? Do we need to solve a particular global problem? Could we change lives at scale?
The onset of COVID-19 was the catalyst for The Altruistic Capitalist in a few ways. First, I had more time saved from commuting—to meetings and the gym—and more time from the reduced socializing that the pandemic imposed on many of us. It was a good a time as any to write a book.
Second, businesses, public and private, and non-profit organizations worked together to supply protective and medical equipment and develop a vaccine quickly to fight against the disease. It amazed me to see how quickly and united we could solve a global problem like the pandemic. What if we could unite to solve other problems such as homelessness and access to clean water? What does it take to bring disparate groups or even competitor companies to work together?
Competitors and Win-Win
These questions set me on the path of companies that develop social innovation that positively impacts their community, the environment, and the bottom line. Futurecraft.Footprint was born from the collaboration between adidas and Allbirds, two competitors in the sneaker industry. Both wanted to reduce the harmful impacts of their business on the environment.
They exchanged proprietary technology and materials innovation to produce a sneaker that emits only 2.94 kilograms of CO2 per pair, from production to end-of-life. This is around 20% of 14 kilograms, or what the average pair of sneakers emits during its life cycle.
This collaboration was different from many others in the industry and the business world. Traditional business textbooks advocate for leaders to increase their dominance in the marketplace and gain an advantage over their competitors. They were willing to disrupt the supply chain and rethink how to produce more sustainably sneakers and do this together. But this collaboration was not to defeat the competition but to solve the two businesses' common problem, that of climate change.
But this is not the only example. In 2012, when Hubert Joly took the helm of Best Buy, the electronics retailer was at the brink of bankruptcy with the Goliath Amazon at its heels. Customers may be walking into Best Buy to research products, but they would go online and purchased their electronics on Amazon in the end.
Instead of competing with Amazon, Joly partnered with Amazon and other vendor suppliers such as Samsung, Sony, and Apple. Best Buy launched the store-within-a-store experience, where customers could test out new products across different brands all under the Best Buy roof, including new Galaxy products by Samsung and Kindles from Amazon. The relationship worked well for Best Buy and their vendor suppliers. So much so that Amazon granted exclusive rights to sell their Fire TV to Best Buy.
Systems Leaders and Generative Conversations
Systems leaders are often behind corporate social innovation in these two stories. They empower others towards collective leadership—to break down barriers and assumptions that may limit collaboration. They usually have a high level of empathy—being able to see the perspectives of others quite different from them—creating a relationship built on trust and respect.
Often systems leaders are not concerned with taking credit—it is not about the number of social media likes and reposts. These vanity metrics fade with the scroll. What legacy do social media metrics leave behind?
For adidas and Allbirds, the teams were more focused on reducing the environmental impact in the sneaker lifecycle. For Best Buy and its vendor suppliers, Joly and his team focused on enriching the lives of others through technology. They were less focused on the profit (although they remained financially responsible) and looked to the longer-term impact of the solution they were creating.
Bringing different organizations with varied cultures requires fostering generative conversations. According to Otto Scharmer, generative listening is the highest form of listening where individuals can "listen together", hear new possibilities, and surface ideas for collective action. This goes beyond factual listening—where individuals start to accept information that may not align with existing ideas and assumptions—and empathic listening—where individuals can see the perspective of the other and forget personal agendas.
Leaders should ask questions that build understanding and elicit possibilities and create a safe space for others to share their opinions without judgment to foster generative conversations. Developing trust across groups that have not worked together before may require time and patience. Creating an environment where disparate groups actively listen without judgment will empower the collective to accept the different opinions and develop a solution that incorporates the other points of view.
The Collective and Shared Value
Generative conversations enable the group to build ecosystems of shared value. Each player in the ecosystem understands that everyone has a unique role to play in solving the problem. Companies bring creative energy to develop new business models while non-profit organizations are more knowledgeable about local social needs and facilitating engagement with and mobilizing local communities.
Yara was having problems reaching rural farmers in Tanzania. Government corruption at the ports of entry into the region and poor infrastructure meant little access to fertilizer that would increase crop yields and reduce famine and poverty. Farmers could not influence government policy, and international aid provided temporary relief but did not solve the underlying issues that led to economic stagnation and famine within the region.
Yara is a global fertilizer company. The micro and macro changes needed to alleviate famine and poverty in Tanzania were beyond their power. But they provided the impetus to start the ball rolling.
Yara brought together 68 organizations, including businesses, international aid agencies, and the Tanzania government, under the SAGCOT (Southern Agricultural Growth of Tanzania) partnership. While Yara was the spark that ignited the change in infrastructure, transportation, and commercial support, it was not a significant investor in terms of funding.
The public and private partnerships were successful because Yara was not insistent on having things done their way or implementing their particular solution. Stepping into co-creation with others means letting go of existing mental models that may limit the group from moving forward and doing things differently.
Transience and Legacy
SAGCOT identified the individual and interconnected causes and mapped them to the key stakeholders within the partnership. Having different stakeholders at the table enables second-order thinking, where the subsequent impacts of an action are considered. It is deliberate, longer-term, and more complex than anticipating immediate consequences (first-order thinking).
Imagine a crisis at work. First-order thinking leaders would resolve the problem themselves, thinking, "I have done this before, I can solve this faster. My team can learn later". The impact is that the team does not feel empowered and loses the opportunity to grow.
Second-order thinking leaders instead guide their team to solve the crisis themselves. While in the short run the team may take more time to resolve the problem, in the long run, the team will be better equipped to deal with future crises. The team may also find new ways to solve and approach the problem.
When we consider beyond the immediate impact of our business actions, beyond the next fiscal quarter or year, we realize how many stakeholders we need to bring to the table to develop comprehensive solutions that do not create problems in themselves.
The days of win-lose and outsmarting the competition belong to the past. Leaders who positively impact communities and the planet, actively engage their employees, and sustainably grow their business think win-win. They foster environments for generative conversations, build trust and break down barriers. This open mindset empowers partnerships that help us see beyond our actions' obvious, intended, and immediate consequences.
What legacy will you leave behind?