The 360° Corporation

9781503607972: Hardback
Release Date: 3rd September 2019

Dimensions: 152 x 229

Number of Pages: 232

Edition: 1st Edition

Stanford University Press

The 360° Corporation

From Stakeholder Trade-offs to Transformation

Going beyond the business case for diversity or sustainability, this book offers guidance to leaders as they navigate the competing demands of stakeholders. Sarah Kaplan argues that conflicting needs, rather than being confusing or problematic, can actually be the source of organizational adaptability and resilience, and shows how companies can not only cope with real tradeoffs but actually thrive and innovate around these tensions.
Hardback / £22.99

Companies are increasingly facing intense pressures to address stakeholder demands from every direction: consumers want socially responsible products; employees want meaningful work; investors now screen on environmental, social, and governance criteria; "clicktivists" create social media storms over company missteps. CEOs now realize that their companies must be social as well as commercial actors, but stakeholder pressures often create trade-offs with demands to deliver financial performance to shareholders. How can companies respond while avoiding simple "greenwashing" or "pinkwashing"? This book lays out a roadmap for organizational leaders who have hit the limits of the supposed win-win of shared value to explore how companies can cope with real trade-offs, innovating around them or even thriving within them. Suggesting that the shared-value mindset may actually get in the way of progress, bestselling author Sarah Kaplan shows in The 360° Corporation how trade-offs, rather than being confusing or problematic, can actually be the source of organizational resilience and transformation.

Contents and Abstracts
1Creative Destruction Redux—How Stakeholder Needs Create Performance Trade-Offs
chapter abstract

This chapter provides an overview of the argument of the book: that the business case for social responsibility is inadequate for tackling the trade-offs between stakeholders that corporate leaders face today. It outlines the "total returns to shareholders" logic that has predominated for the past three decades and shows how current notions of shared value are limited in their effectiveness because they remain tied to this logic. The chapter then lays out an alternative approach for corporate social responsibility, the 360 Corporation model, and introduces four modes of action: knowing the trade-offs, rethinking trade-offs, innovating around trade-offs, and thriving within trade-offs. Building on Kaplan's previous book, Creative Destruction, the chapter shows how these four modes of action can lead to transformative possibilities.

2You've Got to Walk Before You Can Run—Knowing Your Trade-Offs (Mode 1)
chapter abstract

This chapter lays out Mode 1 action: knowing your trade-offs. Every business model has trade-offs embedded in it. Few companies recognize that each business decision involves a choice to favor the needs and values of some stakeholders over those of others. Because these trade-offs are often implicit, organizations may not have systems, information, or processes for understanding them. The risk to a company, though, is that stakeholders might find their own ways to make their voices heard, ways that might prove to be quite costly to the company—strikes, lawsuits, social-media campaigns, and protests may be the only way that stakeholders feel they can get into the conversation. Mode 1 involves two steps: understanding how the business model really works (an inside-out approach) and getting stakeholders to sit at the table to give voice to their own views (an outside-in approach).

3Is There a Win-Win? The Search for Shared Value
chapter abstract

This chapter introduces Mode 2 action: rethinking trade-offs. Although there is no shortage of books, articles, and reports telling organizations that they should make the business case for action, this chapter argues that the more interesting question is, How do you go about generating the insights about these potential benefits? The process is more important than the business case itself. What actions can organization take? The chapter proposes three steps: (1) go back to Mode 1: know your trade-offs; (2) use the analysis of trade-offs to set goals (3) develop solutions and understand whose interests will be affected by them. The chapter highlights the risk of sticking with win-win solutions, showing how making the business case can be counterproductive. The latest research suggests that the more we say we need a business case to justify action, the less likely we are to achieve our "moonshot" goals.

4Getting Stuck in the Business Case, or How the Business Case for Diversity Blocks Progress
chapter abstract

This chapter fleshes out the argument that making the business case can block positive action for change, using the case for diversity as a window into the challenges. Seeking a win-win requires a business case, but when leaders apply the business-case logic, it can undermine the impact of the actions made. Addressing trade-offs and growing the pie for shared value is often more complex than organizations would like to believe. Even if they believe it, it may be hard to muster the commitment, resources, and willingness to bring about change to make the pie bigger. Yet most of the discourse around corporate social responsibility remains stuck in business-case logic. This chapter shows why this is problematic and how making the business case is only the starting point for a conversation and a first step in a process of discovery.

5CSR Is Not an Add-On—Innovating in the Supply Chain
chapter abstract

This chapter takes the reader beyond the business case to Mode 3 action: innovating around trade-offs. Starting with the case of the Tazreen Fashion factory fire in Bangladesh, the chapter delves into situations where the win-win calculation between different stakeholders is often not immediately evident. While the initial response to these kinds of tensions has been audit and compliance, the chapter shows that companies are discovering that sticking to the rules of the game—compliance with regulations—may not be satisfactory. First, for anyone committed to the social goals associated with stakeholder needs, compliance may seem unambitious. Second, the compliance mind-set may make it hard to come up with the required actions even to achieve the regulated objectives.

6Stakeholders as a Source of Innovation—Transforming Operations
chapter abstract

This chapter shows how companies can take Mode 3 action to transform trade-offs into innovation challenges. The deeper the insight into the trade-offs and their causes, the more innovative the solutions can be. The chapter also argues that no company can innovate for stakeholders and get it right but instead must innovate with stakeholders in an embedded innovation process. Creating platforms to work with stakeholders is useful for both identifying the problems and generating the solutions. This chapter shows how companies can start with Mode 1 analyses of trade-offs but avoid getting stuck in Mode 2 business-case arguments, learning to cocreate innovative solutions with stakeholders.

7Dealing with Paradoxes—Selling Sustainably
chapter abstract

This chapter takes the reader into the difficult territory of Mode 4 action, in which companies must thrive within intractable trade-offs. Using the example of consumerism and consumption, the chapter lays out the kinds of tensions that may be impossible to resolve. If a company operates only in Mode 2 (making the business case), lots of tough conversations are off the table. These trade-offs—such as fighting the dangers of consumerism while trying to sell products—are so tricky that it is unclear whether any Mode 3 actions to innovate around them are possible. This is where existing theories mainly leave off. What happens when we can't find shared value or can't find any innovations that solve the problem? The answer, the chapter argues, will be to hold the trade-offs in tension and use them productively to promote organizational resilience.

8Experimentation—Going Green, not Greenwashing
chapter abstract

This chapter uses sustainability initiatives as a lens through which to examine the limits of win-win solutions. It argues that, when companies hit a wall, the most effective among them will break ties in favor of doing something new. If there isn't agreement about whether or not there is a business case for action (Mode 2), they decide on the side of action. Forward movement may provoke innovative solutions (Mode 3), but when solutions aren't readily apparent, that's where Mode 4 action comes in. It is precisely the impasses that can provoke the biggest insights. Impasses are uncomfortable, but the discomfort can lead to breakthroughs, experiments and new ways of thinking. Even those experiments that fail in the lab or the marketplace may be tremendous sources of learning and step ladders to the next experiment. This chapter shows that the best companies and leaders thrive within these tensions.

9The 360° CEO
chapter abstract

This chapter asks what it would take to spearhead the 360° Revolution. For leaders, this will be a transformative process, one that involves asking questions, co-creating with stakeholders, using impasses as creative friction, being willing to let go of the current business model, mobilizing innovative talent, aligning incentives, learning as you go. Most importantly, the leader just has to get started. You don't add on social goals to the day-to-day business, sprinkling some "feel good" on top of profit and loss statements. It's going to take courage to lead the revolution. The leadership challenge for the 360° Revolution is one fraught with unknowns, complexity and sometimes unresolvable tensions. Yet, it is also filled with inspiration, creativity, passion and meaning. The difficulties are what make possible the breakthroughs.

Epilogue: A New Perspective for Stakeholders
chapter abstract

This chapter turns the conversation on its head and asks what we can do as individuals facing corporations? We are citizens as well as workers. If we care about pollution, energy use, climate change, workers' rights, consumerism, discrimination or other problems that the capitalist system creates, what can we do? One important insight is that stakeholders can actually change the calculation about the relative trade-offs. If acting in ways that are contrary to the interests of certain stakeholders becomes more expensive (because of bad press, protest, liability or law suits), then it easier for companies to make the business case for action. The chapter highlights possible actions workers, consumers, and investors, can take to shape the corporation in society. The 360° Corporation takes the needs of different stakeholders seriously. It doesn't let anyone off the hook, not stakeholders, not companies. And, therein lies the possibilities for a new economy.

Sarah Kaplan is Distinguished Professor at the University of Toronto's Rotman School of Management where she is the founding Director of the Institute for Gender and the Economy (GATE). She is also Senior Fellow at the University of Pennsylvania's Wharton School, and has nearly a decade of experience at consultancy McKinsey & Company. Her prior works include extensive and award-winning academic publications as well as the business bestseller Creative Destruction.

"Today, sustainability is on the agenda in every boardroom. Most executives have come around to the idea that corporations need to do more than just maximize profit—but they don't know how. Sarah Kaplan's book provides a clear roadmap to this goal. As she says, there are no simple solutions here; however, she sets out the tensions and trade-offs with clarity and with many fascinating examples. This book is essential for executives and advisors who are looking to take corporate purpose and sustainability seriously."

Julian Birkinshaw, Professor and Deputy Dean
London Business School

"As business leaders, we evaluate and make trade-offs every day. Kaplan has prepared a cogent guidebook to help turn these events into strategic opportunities to capture value. The 360° Corporation outlines the critical criteria and a process of inquiry needed to make better business decisions, especially in today's ever-changing stakeholder environment."

Dave Stangis, Chief Sustainability Officer and Vice President of Corporate Responsibility, Campbell Soup Company
Entrepreneur-in-Residence and Senior Fellow in Social Innovation at Babson College

"There is a burning need for companies to engage with a variety of stakeholders, but doing so is costly and creates thorny tradeoffs. So how do we do it? This profoundly important book provides a fresh perspective on that question. It's a brilliant, indispensable guide for business leaders—and anyone else hoping to shape the role of corporations in society."

András Tilcsik, Canada Research Chair in Strategy, Organizations, and Society
University of Toronto

"Using organizational realities, this book puts leveraging tradeoffs instead of romanticizing shared values at the center stage of managerial decision-making. The 360° Corporation offers rare insights on how to combine humility, inspiration, and aspiration in business. A must-read for anyone interested in the potential of companies to do more than generate profits."

Johanna Mair, Professor at the Hertie School of Governance, Co-Director of the Global Innovation for Impact Lab
Stanford Center on Philanthropy and Civil Society

"Bestselling author and award-winning researcher Sarah Kaplan offers a wise guide for business leaders facing apparently impossible demands and tough choices in their environments today. Rather than simply looking to manage trade-offs or seeking fast win-wins, she reveals how companies can take a more difficult but ultimately transformational path: embracing the tensions to co-create new models with their key stakeholders."

Tanya Menon
co-author of Stop Spending, Start Managing: Strategies to Transform Wasteful Habits

"If you want to understand the keys to truly great corporations today, read Sarah Kaplan's The 360° Corporation. Based on more than a decade of research and work with the world's most innovative creative companies, Kaplan shows how the key to sustainable and enduring success lies in effectively engaging all stakeholders and managing complex tradeoffs. A must-read for CEOs, directors, executives, and future business leaders."

Richard Florida
author of The Rise of the Creative Class