Disruptors get a bad name, but they are uniquely placed to change the world.
Ahead of the Positive Impact Summit 2018 in March, Palladium has linked up with Management Today to explore the relationship between long-term, sustainable business growth, and social progress.
It sounds like a contradiction in terms. Disruption is in many ways the current incarnation of get rich quick capitalism. It’s predicated on the idea that success is eating someone else’s lunch, as quickly as possible – taking the share, not growing the market.
At first glance, it’s hard to see how such rapacity could be especially ethical, if all it’s ultimately concerned with is wealth-transfer. Indeed, that can almost seem like an invitation to unethical behaviour, whether that’s cutting corners on safety and sustainability, or replacing good jobs with lower quality ones. These are all charges that have rightly or wrongly been thrown against the most high-profile disruptive start-ups.
But there is another way of looking at it. Disruption could also be seen as deploying a dramatically new business model – often but not always underpinned by new technology – to do things better than they’ve been done before.
There are numerous ways in which such value-adding disruption can and indeed should be ethical. Take M-Pesa, an African corporate venture launched in 2007 by Vodafone and affiliates Safaricom and Vodacom. It’s a mobile carrier that allows cashless payments in societies that previously had minimal payments infrastructure. In a sense, M-Pesa disrupted the cash economy but in the process brought millions of people into the formal financial system, with all the economic benefits that brings.
This is an example of accessing hard to reach markets, one of the three key ways for business to have a profound social impact as identified by Robert Kaplan, George Serafeim and Eduardo Tugendhat in their recent Harvard Business Review article Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality.
Their thesis is that attempts to create social value are far more likely to succeed if they’re profit-making, collaborative and boldly ambitious, something that applies to accessing hard-to-reach markets as much as the other two routes to inclusive growth that they identified, upskilling workers and building sustainable supply chains.
The bold pursuit of long-term results is a hallmark of disruptors, perhaps more than collaborative business models. But just as being in a hurry doesn’t have to mean cutting corners, so being impatient and ambitious doesn’t have to mean refusing to work with others, and being technology-driven doesn’t have to mean you neglect the skills of your workforce. Indeed, those are features you’ll find lacking in the biggest and best disruptive start-ups, but common in the list of flash-in-the-pan failures.
Ultimately, disruptors can be ethical or unethical, or indifferent to ethics, like any other business. Some will make a fortune while delivering social impact, others won’t. But the fact is that some things need disrupting. Too many markets simply don’t work for their participants.
The most profound opportunities are to be found in fixing these markets, or making new ones in their stead. Those with disruptive mindsets are perhaps uniquely able to perform this task, because they can see new ways of doing things and are ambitious enough to try.
Whether they will is up to them. It would require them to come out of their comfort zone – collaborating with local partners, with local knowledge and patient capital – but the results could change the world.
by Adam Gale