Corporate credibility continues to deteriorate. Global natural resources are scarcer than ever. And for many Americans, “the dream” is slipping further from reach. Many fault big business for these pressing problems, but according to Harvard Business School Professor Rebecca Henderson, we should be investing in business, not blaming it.
Business, she says, is “an instrument for human good, and a major source of prosperity and freedom.” But for years, “we’ve run businesses as if social capital was free and natural capital was very cheap,” and clearly, such strategies don’t match today’s realities. Still, the system of capitalism offers our best chance for generating both economic and social value – if it can adapt to meet the challenges. And if it succeeds, Professor Henderson, who also has a deep background in engineering and economics, is confident businesses will profit in the process.
Professor Henderson acknowledges that change is hard. But it is possible. She has dedicated her career – including 21 years at MIT – to studying large firms that couldn’t do new things (and likewise, many that could and do). Harnessing the energy and enthusiasm in people to tackle these big world problems provides just the kind of transformative push needed for large-scale innovation. It’s a message Professor Henderson emphatically delivered at the recent World Innovation Forum and it’s the foundation of her forthcoming business book on strategic renewal.
The message is resonating. Professor Henderson teaches Harvard’s first – and immensely popular – course on “Reimagining Capitalism.” Relying more on provoking conversation and less on traditional cases and “how to” prescriptions, she is helping leaders explore the idea that many of the world’s problems can be effectively addressed by high performing, well run businesses, and how their motivations and actions can make a critical difference in shaping the future.
“We have a big transition on our hands,” she says of the move toward sustainable business. But it’s one of enormous renewal, growth and opportunity for those that make the leap.