If you've heard the term stakeholder capitalism or sustainability or ESG, corporate social responsibility, conscious capitalism, corporate citizenship or purpose-driven company, but don't know exactly what they mean, or don't know how to actually make these ideas come to life, then this course is for you. The world is facing complex challenges. In one day, Greenland lost 11 billion tons of ice. In one week, the US experienced four mass shootings. In one year, the world sent 21 billion tons of textile waste to landfills. In one decade, OECD countries have made almost no progress on the gender wage gap. You might ask, what does this have to do with corporations? These are social issues, these are environmental issues. My answer is that they have everything to do with corporations. We are increasingly understanding that corporations play a big role in creating these problems and they can and indeed must play a central role in addressing them. Every manager and leader, no matter at what level of the organization, from frontline supervisors to CEOs and boards of directors, will be expected to have skills in coping with these issues. More than coping, you'll be expected to lead responsibly. At this crucial turning point in the world, many people are reevaluating their lives and their careers. No longer is it satisfying just to have a job, people want these jobs would be meaningful. They want jobs that contribute to the betterment of society. By taking this course, you'll be joining a community of executives around the world who are looking to transform their organizations to meet the needs of the 21st century. What makes stakeholder capitalism or sustainability or corporate citizenship hard are the trade-offs that every business model creates. A retailer wants to get your online purchases to you on the next day, but that creates packaging waste, increased traffic and pollution, and potentially precarious jobs for warehouse and delivery workers. A bank wants to make loans to make a profit, but if their clients are oil companies, these loans may be financing global warming. A clothing brand may want to manufacture their products in a low cost country in order to keep prices down for their consumers, but that may contribute to poor working conditions in the supply chain. These are just a very few sketches of the kinds of issues any executive faces on a daily basis. Every business model and every operating decision has trade-offs embedded in it. Profits at the bottom line are not always compatible with the interests of the stakeholders that surround the corporation. This course is designed to help you analyze these trade-offs and learn how to address them, either by rethinking them, innovating around them, or thriving within them. The big problem is that meeting these stakeholder demands often requires action that could compromise profits. It is not as simple as saying just do it. Improving worker conditions, investing in environmental advances, addressing the impacts of consumerism, and creating talent pipelines for marginalized communities or stopping polluting activities are all costly. Costly in terms of cash, costly in terms of time, and costly in terms of organizational disruption. Yet, just because they are costly doesn't give organizations and excuse to go slow. In fact, the urgency for action cannot be greater than it is today. We see this as rising seas or already flooding communities, pollution is choking cities. The AI revolution is creating major dislocations as jobs are replaced with robots and gender and racial equality is stagnating. But the question of how is non-trivial? Let's say we want to make a difference. What's the first step? How do we make it real in our own organizations? I created a course at the University of Toronto's Rotman School of Management to see if I can figure out the answer to those questions. I called it the 360 corporation because I wanted us to look at the stake holders that surround companies from all directions, all 360 degrees. It turns out that there aren't easy answers. There aren't step-by-step instruction manuals or simple toolkits, even though that's what most people want. My students and I had to spent the last 10 years thinking hard about the role of the corporation in society, and about what companies might do to deal with the trade-offs created by stakeholder needs that conflict with the corporate bottom line. The ideas I've come up with are captured in my book, The 360 Corporation, from stakeholder trade-offs to transformation. Now, for the first time, I'm bringing the course to a wider audience through Coursera. I'm excited you are joining me to think together about these issues. As we go through the sessions, I'll periodically let you know when you can learn more from chapters in the book. The 360 Corporation is an organization that can productively and effectively address trade-offs. This course offers signpost to leaders who want to spearhead the 360 revolution. I'll show you that companies can develop explicit and coherent plans for addressing the tensions as created by stakeholders. Specifically, you'll learn about four modes of action. Identifying trade-offs is what I call Mode 1 action. It's the starting point. As I'll explain throughout the course, sometimes there's a win-win that allows you to address the various stakeholder interests. This is Mode 2 action, you're rethinking trade-offs to find shared value. At other times, creative thinking may lead you to an innovative, mutually beneficial solution. This is Mode 3 action, in which you innovate around the trade-offs. Then there are still other times when you hit an impasse, then you need to find a way to keep moving. This is Mode 4 action or thriving within trade-offs. In this situation, experimentation can help you make the best possible decision. To be clear, companies can operate in multiple modes of action at the same time. For some issues, they may only be assessing the trade-offs, which is Mode 1. For others, they may be acting based on a business case or Mode 2. For others, they may be innovating around the trade-offs, that's Mode 3. For others, they may still be stuck, unsure how to resolve the trade off, but working on it. That's Mode 4. Of course, some companies may not be doing any of this. This course on the 360 corporation will address all of these modes of action and serve as a comprehensive playbook for managers, CEOs, and innovators, who are burned out by constantly being tagged in many different directions by the stakeholders that surround them. I'll be showing you along the way how you can apply these ideas in your own work. This is not just a course, by the way, for people with social responsibility in their job title. Of course, it will be useful for anyone whose role is to spread sustainability, gender and racial equity, social responsibility, and other stakeholder strategies throughout their organizations. But the course is equally important for every executive and line manager because everything you do matters for the social and environmental impact of your companies. No longer are these functions separate in any organization, you don't have the do-gooder is over in one place and the business people over in another. When I started teaching in business school two decades ago, the prevailing mantra amongst the business students was learn, earn, return. That is get your MBA, that's the learning part, go out and make a lot of money, this is where you earn, and then later in life, you give back to society through volunteering and charitable giving. This is where you return benefits to society. This is a particular mindset that separates what people do to earn a living from what they might do for society. It's a mindset that's actually reinforced in many business schools by the fact that the ethics course is offered as a completely separate course from all of the other business disciplines that students study, such as strategy, finance, accounting, operations, economics, or organizational behavior. But given the social and environmental problems today, this mantra no longer holds up. People are not interested in working in a world where profits matter at one in time and social responsibility at another time. They aren't seeing the disconnect and indeed won't tolerate it. I've been on my own personal journey towards becoming an advocate for a more inclusive and sustainable economy. When I started my consulting career back in the late 1980s, we were all entranced by the notion of total returns to shareholders as the be-all and end-all of business. That is, the entire focus of one's efforts should be to do things that increase the stock price appreciation or dividend payments to the people who own the stock of the company. Indeed, in my 2001 book, Procreative Destruction, we based our claim about the mythical nature of sustainable competitive advantage on the observed inability of firms to maintain superior total returns to shareholders over the long-term. We argued that if firms were going to perform for their shareholders, they would have to change, that is both create and destroy at the pace and the scale of the market. It was an innovation story. We also pointed out that this was an extraordinary challenge, one that few firms would be able to achieve. We went in search of excellence and excellence turned out to be hard to find. That notion of excellence that dominated in the 1990s and 2000s was defined by whether or not firms could provide superior returns to their shareholders. I spent more than two decades researching and consulting to companies about how to meet that aspiration. It was hard enough to do, and I soon realized that this definition wasn't even complete. In addition to the shareholder, interests of other stakeholders needed to be figured into the equation. Now the challenge is even greater. We've learned that a solitary and short-sighted focus on returns has created risks for society and for the long-term sustainability of the companies themselves. How can you survive if your physical plant is damaged regularly due to global warming and storms? If employees no longer want to work for your company because of harms it is creating. If investors walk away because the company doesn't meet environmental, social, or governance standards. Now the question remains, what is a corporation to do? How do you do it? As you will see, it's still an innovation story, but now it is an innovation story that incorporates the incredible possibilities for transformation when you take into account the interests of all the stakeholders that surround you. I'm excited to delve into these issues with you over the next weeks. Thanks for joining me on this journey.
