Adam Kahane is Director of Reos Partners, a global social enterprise that helps people from across a whole system be it an organization, a sector, or a society work together to make progress on their most crucial challenges. Adam received a 2022 Schwab Foundation Social Innovator of the Year award at this years World Economic Forum meeting in Davos. He has worked in more than 50 countries in every part of the world, with executives, politicians, generals, guerrillas, civil servants, trade unionists, community activists, United Nations officials, clergy and artists.
As companies face growing pressure to make statements and take actions in reaction to world events, including war and violence, the climate crisis, global inequalities and more, understanding how to find a balance between profitability and purpose is becoming increasingly complex. I previously interviewed Adam about his recent book Facilitating Breakthrough, and in light of all the geopolitical problems in the world from Russia invading the Ukraine to US-China tensions, I wanted to talk to him again to get his perspective on what business can do in these challenging times.
In this conversation, Adam and I discuss the role of business amid tensions and conflict, and Adams perspective on how balancing competing priorities is a fundamental part of business.
Christopher Marquis: Were discussing businesses role in world affairs, and there are many contextual issues at play.
For one, in the last 20, 30, 50 years, the rise of multinational corporations has resulted in stateless entities that have no responsibility to anyone. When we look at the scope and power of these corporations, theyre hugely influential on the global scale. Walmart’s sales are about the same as Belgium’s GDP. So it’s crazy that there’s not more systematic engagement with these gigantic companies in the multilateral world, such as through the UN, to harness their influence in an effective way.
Then there is the multinational nature of supply chains, and that the typical pattern over the past number of years has been for businesses to push environmental and social damage deep into the supply chain, usually in developing Global South regions. Then there are extreme issues such as Ukraine and companies needing to take a stand.
All of this is on the one hand obvious, but then it seems also few are recognizing the systemic nature of the issues at play. How do you see these challenges and tensions playing out in your work?
Adam Kahane: The work I and Reos Partners have been doing for the past 30 years has been to help teams of leaders from across a whole geography deal with their most crucial challenges, such as peace, water health, Indigenous rights, climate change, education, community development, and gender-based violence. Those efforts almost always include business leadersin some cases, they have been convened and funded by business leaders. So business leaders are already playing important roles in addressing such challenges.
The role and responsibility of business leaders are the same as those of any other human being to do your job while taking into account what is going on around you, including what is going on for other people.
I express that concept in terms of power, love, and justice. Business leaders have power and must exercise this power. By power I mean doing their jobs, achieving their mission and ambition. Exercising power always creates opportunities and risks. The challenge for business leaders, just as for everybody else, is how to do this in a way that is responsible: that takes account of their context.
Power is the force that drives all life and all action: literally nothing in the world happens without power. How do we exercise our power in a way that is aware of our context? That’s the love part. Love is about awareness of the larger whole of which you are part. And how do we act in a way that is fair to others? That’s where justice comes in.
Marquis: I often consider the motivations for businesses to do good. A number of the people I talk to have very strong opinions about this stakeholder capitalism idea that has overtaken the world. The World Economic Forum is deep into this conversation, as well, I recall this was the explicit focus of the January 2020 meeting, the last in-person meeting before COVID.
Whats your take on it? Is stakeholder capitalism about taking care of your employees and the community and environment because it is the right thing to do, or is it because there’s a business case for it? It seems like your idea is more about the right thing to do rather than actually having a business case.
Kahane: I define power as the drive of everything living to realize itself. This is something business people understand very well. The business objective of the organization, the drive for growth, the drive for development, the drive for ambitionthis is all contained in the word power.
But the idea that you do that in isolation, without paying attention to what’s going on around you, is absurd. You have to pay attention to the laws, to what’s going on in the communities you’re working in, to what’s happening in your markets. What are the wholes that you’re part of? For that concept, I use the word lovethe drive to unite the separate. For me, the idea that you have to do business, and all of these other concerns are extraneous, makes no sense at all. How long would a company remain in business if it wasn’t paying attention to laws, markets, employees, communities? Not even a day.
The business case involves all of that, including whether you are being a fair and just player. Or are you seen to be ignoring demands for racial justice in your operations, or ignoring demands for community responsibility, or for sustainable development? To me the business case IS all of that. So to say the business case is not just about us making money is unnecessary, because the idea of just making money without those other factors is ridiculous.
Marquis: Id love to explore how this plays out in real life. Im curious about your take on a recent example with Ben and Jerry’s and its parent company, Unilever.
Kahane: Sure, Unilever is a company Ive worked with and admire a lot.
Marquis: Me too. Both companies are great. So Ben & Jerrys was tweeting about Bidens Ukraine policy before there was even an invasion. The CEO of Unilever said, essentially, Ben & Jerrys are not international relations experts and shouldn’t be making a statement.
These business leaders, they’re individuals, and through their platforms they have a way to express a point of view. So they tweet their perspective, and then the owner of the parent company says this might have a negative impact on us.
These leaders have their personal values, as well as their organizational interest, and they can come to different conclusions on issues. Their business platform puts them in a different category than a regular person.
I know this is an extreme situation in Ukraine, but it highlights all the various factors that come into play.
Adam Kahane: It’s an interesting example. Here’s how I look at it. Unilever is trying to do something in the world, something that is complicated. It provides products and employs people. It is a powerful player more powerful than an individual executive, more powerful than an ordinary person.
That is the challenge the organization faces. Like a person, it needs to think about many things at once: How do I take action in the context that I’m in? How do I do it in a way that is aware of the whole I am part of? How do I act fairly?
This is not easy or straightforward. These imperatives are always permanently in tension. So in this case, there is the question of the financial health of the company and the well-being of the employees. There is the reputation of Unilever with its customers, including angry European customers.
Two of the many questions to be asked would be: How do we as Unilever deal with this situation where one of our big marketsRussiahas attacked Ukraine? We can’t just pretend nothing’s happening. We can’t be unaware of the context we’re in. And that includes how we protect our own financial interests and our brand value. Despite the extreme nature of the example, it’s an ordinary business issue in that all business issues are about how do we do what we’re trying to do in the situation we’re in, given these multiple imperatives?
Marquis: I appreciate the nuance of your response and that there are many complex and sometimes conflicting expectations. When you mention the love and justice dimensions companies should think about, and you say that is the business case, do all those elements have to at some point, whether in one year, five years, or 20 years, have some sort of profit or revenue associated with them? Or is it okay to say that it’s not about self-interest at all, but about the love and justice in themselves? It could be argued that humans do things because of love, even if its not in our self interest, but with companies it seems people expect every decision to end up making money.
What is your position on that?
Kahane: Power is about the drive to self-realization. Just like a human being cannot stay alive for long without food or water or oxygen, a company can’t stay alive for long without revenue and profits. So the idea that I’m going to do something, but as a result I’m not going to be alive anymore, is not workable. That’s why Martin Luther King said power without love is reckless and abusive, and love without power is sentimental and anemic. That quote, from his final speech at the Southern Christian Leadership Convention, is what inspired me to this idea. He went on to talk about justice in the same quote.
The power part of it is we have to stay alive, we have to to remain healthy, we have to grow. You would not compromise being alive in order to recognize your place in the system. But in order to stay alive, and to achieve your mission, you have to recognize the way in which you are part of a larger whole. And the way in which you are being seen as a fair player if Amazon is killing its workers through unjust labor practices, this is a human issue, but its also going to be a business issue. These things are in permanent tension, and there are constantly shifting dynamics.
What is the role of business in these social contexts such as peace or climate? All these things are in play all the time and none of it is easy. You can imagine the Unilever executive considering all of these factors in the first days of the war: We could withdraw to not support the Russian invasion, but what about our employees there? What about our shareholders and our customers? It took companies a few weeks to figure it out. Now, theyve decided the best thing to do for the business is to withdraw. I think to say they did it solely as a moral thing is a misunderstanding. It is all a business decision.
Marquis: Ok, lets see how this plays out in another example, an issue thats been under my skin recently. What do you think about the massive inequality that exists within the payroll at some companies? Both CEO pay and economic inequality around the world are through the roof. What can we do about that, in particular?
Kahane: The board in this case has two imperatives: On the one hand, they need to satisfy the aspirations of individual employees, including a valuable executive who says, if you don’t give me this package, I’ll go somewhere else. And they need to have a policy that is seen as fair by people inside and outside the company.
Willis Harman says things change in society when something goes from being understood as unfortunate to being seen as unacceptable. Is the requirement that LGBTQ employees hide their identities at work seen as unfortunate or unacceptable? Is massive inequality in company payscale seen as unfortunate or acceptable? Is a company operating in Russia seen as unfortunate or unacceptable? And how fast can those things change? Very quickly. That is about justice. That is about a sense of fairness. For a long time, people would say, We’d love to pay everybody well, but we can’t afford to. People go along with it until they don’t. It relates to the balance of power in society and who gets to make the rules.
Marquis: A lot of my research and thinking is about how, basically, there’s collective brainwashing that has gone on around the purpose of business, and it being solely focused on shareholders and profit. Your ideas and frameworks give traction to the issues I’m trying to figure out myself, so its great to talk again.
Kahane: Social norms about what people consider just or unjust, or unfortunate or unacceptable, are complex phenomena influenced by, amongst other factors, power dynamics, identity, and misinformation. The belief that the role of the company is to serve shareholders isn’t natural law, it’s something people thought about and decided. I think there’s an opportunity to offer a different way of thinking about the subject, which breaks out of that straightjacket.