When leadership is in our way

It is time to shift gears and to stop searching for best practice models on leadership within the Fortune 500 companies.

Working in the field of social innovation is exciting for me, as it surfaces a variety of challenges but also opportunities across sectors to envision and implement social change. I recently attended the week-long World Economic Forum, held annually in the peaceful village of Davos in the Swiss Alps (actually 100 miles from my birthplace), and the conference provided a terrific forum for dialogue around social change and joint action.

For many years, social entrepreneurs experimented with and created solutions for social problems below the radar. Some people celebrated them as heroes; others viewed their activities as the lab work for society. The last decade, however, was a real game changer. The discourse on and practice of social entrepreneurs has changed, and their work has attracted the attention of a broader audience. The financial service industry is discovering that social innovation is a space for making investments with impact beyond profit; businesses see social innovation as a means to create “shared value” and consider collaborations with social entrepreneurs as an effective way to pursue opportunities at the Base of the Pyramid; and governments across the globe consider social innovation as an important anchor for ensuring social and economic progress. During her opening keynote at this year’s World Economic Forum, German Chancellor Angela Merkel remarked on how excited she was to see so many representatives of the social sector.

But how far ahead are we really? Have we been able to create a thriving and stimulating ecosystem where experiments can lead to more systematic social change? Observing who participated in the forum’s conversations—and even more, listening to what they were talking about—made me optimistic about the future, but it also raised concerns in me about the unspoken challenges ahead.

It was a busy week for the 30 selected fellows of the Schwab Foundation (founded by Klaus and Hilde Schwab to support social entrepreneurs more than a decade ago). This group of “knighted” social entrepreneurs included luminaries such as Wendy Koop, founder of Teach for America, as well as newly endorsed entrepreneurs such as Asher Hasan, an MD from Pakistan who develops solutions for affordable health care in South Asia. The group engaged in numerous panel discussions, on topics ranging from health to the power of business models. In a lunch meeting with politicians, corporate leaders, and social innovators, we discussed the potential for “shared value” to become more than just another management concept. And finally, there were several private meetings. One was on harnessing the hype on impact investing, and brought together the unusual suspects—institutional investors, high street bankers, and social entrepreneurs—in an effort to develop a common understanding of opportunities.

The amount of sessions explicitly and implicitly touching on social innovation exceeded my expectations. But it was the latest addition to the World Economic Forum Family, the Global Shapers, that allowed me to overcome my suspicion that this year’s theme—“The Great Transformation: Shaping New Models”—was more than just a flashy title. The Global Shapers community is comprised of individuals selected based on their potential for future leadership roles in society, and it embraces a diverse group of twenty-somethings, including Howard (Warren) Buffet and Amira Yahyaoui, a human rights activist from Tunisia. This group probably best represents what is at stake: the need and opportunity to change gears and adopt a fresh perspective without the conventions imposed on us by the sector, constituency, or profession we represent.

The challenge for all of us in the field of social innovation is not so much that we lack the models for social—and often even systemic—change. The challenge is how to get there. We often claim that it is different mindsets and different languages used by different constituencies that inhibit progress, even when interests are aligned. But it took a trip to the remote village of Davos for me to realize one of the big challenges ahead as we undertake the great transformation towards a more inclusive capitalism. We need to seriously revisit our models of leadership.

The recommendations and reflections on leadership offered by academics, politicians, and CEOs of for-profit and nonprofit organizations neatly follow textbook recommendations. But do they speak to the demands and challenges of today? They might be useful in bringing us one step closer to pursuing the objective function—profit or social impact—but they will not allow us to invoke the type of paradigm shifts necessary for great transformations.

As Jim March, Emeritus Professor at Stanford University has claimed, leadership is pre-eminently anti-organizational. Leadership needs to come from the outside not the inside, as organizations are bound to conventional behavior and standards of knowledge. It is time to shift gears and to stop searching for best practice models on leadership within the Fortune 500 companies. We might find the seeds for new leadership models in an unexpected place, and the thriving space of social innovation might be one important space for experimentation.

Editors Note
Johanna Mair is an academic editor of Stanford Social Innovation Review, the Hewlett Visiting Scholar at the Stanford Center on Philanthropy and Civil Society and as of September 2012 a professor of Management, Organization and Leadership at the Hertie School of Governance in Berlin.