Groundbreaking ideas and research for engaged leaders
Rotman Insights Hub | University of Toronto - Rotman School of Management Groundbreaking ideas and research for engaged leaders
Rotman Insights Hub | University of Toronto - Rotman School of Management

'The 360° Corporation' will give leaders the confidence to start and follow through with a transformative change

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Sarah Kaplan

In the process of researching and writing her latest book, professor Sarah Kaplan was taken aback by how deeply managers wanted to improve the social impact of their organizations — but how little they knew about actually going about it.

“While it’s reassuring to see business leaders concerned about pressing issues such as climate change or inequality and motivated to take steps towards progress, we also need to think about whether they have the skills and capabilities to move forward,” she says. “People want to know what to do on Monday morning.”

Her new book, The 360° Corporation: From Stakeholder Trade-offs to Transformation (Stanford Business Books, Sept. 3, 2019), gives readers a roadmap on how to make big changes at their organizations, and the confidence to get going. In the book (and in the classes she teaches at Rotman), Kaplan urges business professionals to examine their organizations from the perspectives of all stakeholders — all 360 degrees around them. It’s only by understanding where they stand with all of these stakeholders (consumers, employees, environmental groups, and shareholders, just to name a few) that companies can make sense of the tough decisions they are facing.

Early on in the book, Kaplan explains how, for every organization, there will be times when the values of different stakeholders do not align. In these cases, leaders must make trade-offs. For instance, companies that increase hourly wages for employees may also need to increase the prices that consumers pay. Manufacturers that take drastic (but costly) measures to reduce their carbon footprint will satisfy environmental groups, but will increase operating costs which may reduce their overall profits.

While the very idea of making such tough calls seems daunting, Kaplan walks readers through four modes of action for moving forward: knowing your trade-offs (Mode 1), rethinking trade-offs (Mode 2), innovating around trade-offs (Mode 3) and thriving within intractable trade-offs (Mode 4). At the end of the book, armed with these tools, readers get advice on how to spearhead a 360º revolution.

Without a doubt, The 360° Corporation comes out at a crucial time.

The role of businesses in society has changed, Kaplan says. Consumers expect companies to be driven by more than just money, and they have the power through social media and boycotts to enforce those expectations. Citizens can now threaten major companies by starting Twitter storms; they can stop investing in and buying from businesses whose operations do not align with their ethical and environmental standards; they can take their talent to work for companies that do.

Companies can’t afford to ignore stakeholders or move too slowly in the face of new social expectations. The challenge is in getting started.

Readers could not ask for a better guide than Kaplan, who is director of the Institute for Gender and the Economy, and a professor in the strategic management area at the Rotman School. Her academic work is focused on organizational change: from exploring how businesses contribute and respond to the emergence of new technologies to applying an innovation lens to the challenge of gender equality. As a management consultant with a decade of experience at McKinsey & Company and academic, she is able to frame high-level concepts in practical terms. And she has first-hand experience guiding business professionals using the principles she writes about, having designed and taught, for many years, the very popular Rotman MBA class on which the book is based.

What’s most refreshing about the book is how honest Kaplan is with readers. She’s encouraging, but realistic: the road to change is not easy.

Even when there are clear benefits for many (if not all) stakeholders, executing a big change is not straightforward. In analyzing Walmart’s decisions to install LED lights (which are better for the environment and reduce energy costs) across its stores or to sell only concentrated detergent products (the smaller package sizes cuts down on shipping costs and allows for more products on shelves), she points out how these moves required time, effort and collaboration with many stakeholders.

Often, the challenges that companies need to address are far more complex, whether they are striving for more inclusive workplaces or adopting more sustainable practices or reducing their carbon footprint. The real solutions came from moving beyond the business case — by listening to and working with stakeholders and thinking innovatively.

“Instead of starting with the business case, companies can develop it over time as they engage in the process of innovating around trade-offs,” she says. “Just get started. Take a leap of faith, and see what possibilities for transformation emerge.”

This book was originally published by Stanford Business Books on Sept. 3, 2019.

The 360º Corporation

by Sarah Kaplan

Sarah Kaplan is director, Institute for Gender and the Economy,  distinguished professor of gender and the economy and professor of strategic management at Rotman. She is a co-author of the best-selling business book, Creative Destruction as well as Survive and Thrive: Winning Against Strategic Threats to Your Business. Her latest book, The 360° Corporation: From Stakeholder Trade-offs to Transformation was published in September 2019.