Harvard Business Review March/April 2022

OVER THE PAST DECADE Harvard Business Review has published articles, interviews, and books exploring alternatives to the shareholders-first model of capitalism. Internally we refer to that work by a simple shorthand: “fixing the system.” In August 2019 Business Roundtable came up with a fix of its own: It issued a landmark statement that the purpose of a corporation is to promote an economy that serves all stakeholders—a clear shift away from shareholders first. We applaud that shift—and the increasing debate around it. But we recognize a problem: Too often, discussions of managing with “purpose” can be frustratingly vague. What exactly is purpose? It sounds great in an annual report, but how do leaders actually use it, day by day, to make difficult trade-offs, engage customers, energize employees, and attract investors? This issue’s…

Rosabeth Moss Kanter, a Harvard Business School professor, has spent decades illuminating how structures and cultures propel success or decline. More recently, she has added a focus on big societal problems, asking what it takes to go from changing organizations to changing the world. In an article in this issue she and her coauthor explore how companies and governments can team up to address crises such as Covid-19 and related health disparities. Such voluntary and fluid collaborations require leadership styles unfamiliar to many CEOs. This article identifies essential factors for effective impact. In his undergraduate days at the University of Minnesota, Randall S. Peterson served as the student representative to the school’s board of regents. “I distinctly remember sitting in meetings and realizing that I didn’t understand what was happening—and that…

New Research and Emerging Insights HUMAN RESOURCES LEADERS commonly assume that for a company to stand out as a great place to work, it must deliver competitive perks—everything from skills training to pet insurance to foosball. New research finds that this view is outdated: Engagement and retention don’t correlate with benefits awards. Employees have begun looking beyond material offerings and assessing how they feel about the company they work for—and that requires a different approach. Fortune 500 companies spend more on benefits and perks than ever—almost $2,500 a year per employee, on average. But a study by the research and advisory firm Gartner, comprising global surveys of 5,000 employees and more than 150 HR leaders, reveals that employee engagement has been flat since 2016. For example, just 31% of workers say that their…

More-Experienced Entrepreneurs Have Bigger Deadline Problems WU: Entrepreneurs are notorious for failing to hit their own delivery dates, and those in our sample were no exception. Fewer than one-quarter of their projects were completed on time. Although experience should in theory help people anticipate how long it will take to bring something to fruition, set more-realistic deadlines, and execute more quickly, in practice just the opposite happened. And we’re not talking about minor setbacks. We saw average delays of an additional six weeks for each subsequent project undertaken by these entrepreneurs. HBR: That’s so strange! Why weren’t they learning from experience? To make accurate forecasts, you have to correctly anticipate the complexity of a project: the number of interdependent tasks or components. As entrepreneurs execute more projects, they do get better at…

WHEN ERIK CASSEL and I launched the precursor of our online platform Roblox, our users were friends, family members, and about 100 tech enthusiasts we’d recruited via Google ads. We offered one experience. “Peak times’’ meant maybe 30 or 40 people playing at once. Erik and I were the moderators, keeping our community safe and civil. We also chatted constantly with those early users about what they wanted to see on the platform. Our vision from the start was to build an entirely new category of human coexperience—nothing less than the realization of the next phase of human interaction. We imagined an online space where people from anywhere in the world could share experiences with friends, just as they would in person. Our core idea to get there was a platform supported…

TODAY’S BUSINESS LEADERS are under pressure to come up with a corporate purpose, much as they were challenged to develop vision and mission statements in the 1980s and 1990s. Although this focus on the role of corporations in the economy and broader society has many positive aspects, a risk is that speed, shortcuts, and spin may take precedence over authentic action. Our goal in this article is to help executive leaders be clear-sighted about what they seek to define: the purpose of their purpose. Purpose has become something of a fad and a victim of its own success. Companies are aware that their customers and employees are paying more attention to it as part of a wider reassessment of the role of corporations in society. BlackRock’s CEO, Larry Fink, and other…