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Reimagining Capitalism in a World on Fire, Rebecca Henderson

"The world is changing. The firms that change with it will reap rich returns--and if we don't reimagine capitalism, we will all be significantly poorer."


"Markets only create genuine freedom of opportunity if everyone has the chance to play. When unchecked markets leave too many people too far behind, they destroy the freedom of opportunity that is fundamental to their own legitimacy."

p. 22

"We know what needs to be done. The United Nation's seventeen Sustainable Development Goals lay out a coherent road map--widely embraced by the business community--for building a just and sustainable world. We have the technology and the brains to address our environmental problems, and we have the resources to reduce inequality. The question is not what should be done. The question is how."

p. 27

"Business as usual is not a viable option. We have to find a different way to operate if our planet--and with it capitalism--is to survive. We need to move from a world in which environmental and social capital are essentially free--or at least someone else's business--to a world in which the need to operate within environmental limits within a thriving society is taken for granted. The transition will be massively disruptive--but like all such transitions, it will also be a source of enormous opportunity."

p. 36

"One way to understand the history of the human race is to look at it as the story of our increasing ability to cooperate at larger and larger scales. We built cooperation first within the family, then within the extended family group, and then within the village, the town, and the city. Successful nations cultivate disdain for the "other" and pride in the homeland to persuade people to pay their taxes and participate peacefully in the political process. At their best, large corporations are cooperative communities, persuading hundreds of thousands of people to work together toward a shared goal. Reimagining capitalism requires taking this ability to cooperate and mobilizing it to solve public goods problems at large and larger scales."

p. 42

"Running a company committed to doing the right thing is harder than running a conventional company. It's about being able to be a superb manager and a visionary leader. About being ruthlessly focused on the numbers and simultaneously open to the wider world. But it is eminently possible--and a lot more fun--to manage this way. Leaders like Hamdi and Paul are reimagining capitalism. They are creating value for their investors, while never losing sight of their responsibility to the world on which they depend. Building a just and sustainable world will not be easy or cheap. But in my view we have no realistic alternatives. We must find a way to make this work."

p. 46

"Using the embrace of shared value to reduce risk and increase demand is a powerful way to create economic returns. Walmart's culture-changing experience with Hurricane Katrina led it to the discovery of another great reason to embrace sustainability: the fact that there turns out to be money--a great deal of money--lying on the floor. Cleaning up one's environmental footprint can be a great way to cut costs."

p. 59

"People will work hard for money, status, and power--"extrinsic" motivators. But for many people, once their core needs are met, the sheer interest and joy of the work itself--"intrinsic" motivation--is much more powerful. Shared purpose creates a sense that one's work has meaning--one of the core drivers of intrinsic motivation and a driver of higher-quality, more creative work. It also creates a strong sense of identity, another source of intrinsic motivation and a powerful source of trust within the firm. To the degree that purpose supports authenticity--the ability to live. alife in accordance with one's deepest values--it also increases the presence of positive emotions--something that is strongly correlated with the ability to see new connections, to build new skills, to bounce back after difficult times, and to be more resistant to challenges or threats. The employees of purpose-driven firms are thus likely to be significantly more productive, happier, and more creative than those at more conventional ones."

p. 92

"This is the central premise of industry self-regulation. If all the firms. in an industry need something done--ore something stopped--but are unable to address the problem by acting alone, it may be possible to solve it by agreeing to act together. In the case of palm oil, for example, every major consumer goods company in the world--many with brands worth hundreds of billions of dollars--was potentially vulnerable to NGOs accusing them of destroying the rainforest. Pepsi, for example, is one of the largest buyers of palm oil in the world. So is Mars, the maker of M&Ms. Neither firm could afford a sustained campaign linking their products to pictures of orangutans being hacked to death as they ran from the falmes of a burning forest."

p. 168

"Both environmental degradation and inequality are systemic problems that cannot be solved without government action. Arrestin climate change requires decarbonizing the world's energy supply, radically upgrading the world's buildings, changing the way. we build cities, remaking the world's transportation networks, and completely rebuilding agriculture. These are massive public goods problems that not even the most sophisticated self-regulation can solve. We need governments to provide either the economic incentives that will move firms to action, or the regulations that will force everyone to do the right thing. Business, in its own interest, must take the lead. Without good government and free politics, the free market will not survive."

p. 203

"What we can learn from Mauritius's experience? As advertised, it turns out that business can help build inclusive institutions outside Europe, even when the local society is not radically homogenous. It's also a story that illustrates the subtle interplay between economic interest and the shared sense of what is right. In Germany, Denmark, and Mauritius, a strong sense of self-preservation led a ruling elite to agree to institutional arrangements they did not favor, and would almost certainly have vigorously resisted if they could. In each case, these arrangements proved to be very successful--and to engender a common sense of shared destiny that led to these ways being increasingly seen as. the right way, the only way, the obvious way to behave."

p. 243

"The real world doesn't actually work that way. Effective leaders ride the wave of change they find bubbling up around them. Martin Luther King did not create the civil rights movement. It grew from decades of work by thousands of African Americans and their allies, each doing the dangerous and difficult work of standing up for change. Rosa Parks was not a lone heroine who simply decided to stay in her seat one evening. She was deeply committed civil rights worker whose decision that night was taken in close collaboration with a network of experienced female activists. Nelson Mandela did not single-handedly end apartheid in South Africa. He built on fifty years of struggle in which thousands of people participated and hundreds died."

p. 257

"Change is slow until it is fast. The avalanche looks like nothing but a few pebbles moving until the whole hillside goes."

p. 263

"You don't need to transform the structure of the modern corporation single-handedly to make a difference. If you can make even a small part of a single firm. abetter place to work, you will change lives."

p. 264

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