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Six Steps for Reinvigorating America - Rosa Beth Moss Kanterís new book: America the Principled
Sean Silverstone

December, 2007

(A note from Jackie – this is one of the best books I have read this year. Professor Kanter captured the essence of the current American Agenda. She also provides Six Steps for Reinvigorating America. This is my gift of choice for my friends this holiday season.)

It's no coincidence that the new book America the Principled is coming out just as the U.S. presidential election gets into full swing, says its author, Harvard Business School professor Rosabeth Moss Kanter. She wants us all to rethink the American agenda.

"Once a widely admired as the land of opportunity, America could instead be closing it down—unless we create a positive agenda to renew the American spirit," she writes in the book's introduction.

Kanter believes America at the start of the 21st century has lost its way both as a beacon to the world and as a can-do nation. Among the discouraging trends she sees are political and religious attacks that stifle science and innovation; growing unease and pressure in the workplace; too few companies recognizing obligations to their communities as well as to their shareholders; mistrust and contempt of government; a prevailing political ideology that is xenophobic and isolationist; and the splitting of Americans into antagonistic ideological camps instead of finding common ground upon which to build.
What's needed, she continues, is an agenda built on core American principles that

  • Widens prosperity by spreading more innovation and the opportunity to participate in the "white coat" economy and life sciences revolution of the 21st century.
  • Writes a new social contract based on real family values, creating fair and flexible workplaces that are productive while also attentive to the needs of families and women.
  • Motivates values-based capitalism and drives companies to contribute to solving social and environmental problems while also providing employees stimulating and satisfying work.
  • Restores trust by committing to government as an instrument of public interest.
  • Harnesses the power and reach of Americans to act as "citizen diplomats," spreading greater understanding of our values and helping countries that empower their people and build their economies.
  • Develops an ethos of a community that cares about others and a program of national service to unite people around common understanding.

Kanter, who holds the Ernest L. Arbuckle Professorship at Harvard Business School, specializes in strategy, innovation, and leadership for change. We asked her to discuss several themes in the book, especially those with a business emphasis.

Sean Silverthorne: Why this book at this time?

Rosabeth Moss Kanter: I have for a long time been interested in all the institutions of a country that make a difference for the effectiveness of business and the prosperity of people. And I teach leadership, so I teach about running large systems—small businesses, too, but large organizations—some of them in the public sector or nonprofit world, as well as in the business world.

"When we start closing minds, we jeopardize our competitiveness."

I've been concerned about what has happened to the United States in the 21st century because we entered this century with a great deal of hope, with unprecedented prosperity, with exuberance about the promise of new technology. In the subsequent years, the place of America in the world has changed dramatically.

The dot-com boom was followed by a recession, and only recently has the technology sector recovered. We had a terrorist attack and now have an unpopular and very costly war in Iraq. Meanwhile, countries that used to be called "less developed" became emerging markets, and have invested much more in the development of talent than we have. So there are also concerns about the competitiveness of the United States. Since childhood I've felt that America had a special place in the world, that America was a model for the world in terms of our values and in terms of our contributions. Sadly, in the last few years, that's been questioned.

In 2008, there will be a presidential election, a time when we can debate the nation's future. I wrote America the Principled to offer a perspective about those enduring values that have always been so important to America's prosperity and role in the world, while also providing 21st-century ideas for how we could restore our strengths and also engage with the world in a positive way.

Q: How do you believe we ran off the rails in these last 7 years?

A: Several ways. We let the rhetoric of fear overcome the natural self-confidence of the American people. When there were restrictions placed on certain liberties, there was not as much public outcry as there might have been. Some of those restrictions included the ability to get visas for highly talented foreign workers and graduate students. One of the great strengths of America is our phenomenal system of higher education; we have educated the world's engineers and scientists and many of the world's political leaders. That is an enormous strength in many ways, including having influence in other countries because we've taught those leaders here. So these kinds of restrictions, small restrictions, began to undermine our competitiveness.

"Values-based capitalism starts with principles."

The debates about religion in public life also began to undermine our competitiveness. I think it's possible to be people of faith and still respect the empirical truths of science. But because of religious ideology, restrictions were placed on a major form of science, stem cell research. When we start closing minds, we jeopardize our competitiveness, because innovation and entrepreneurship are the source of our strength, not low-cost labor. And innovation and entrepreneurship require open minds. They require challenging the paradigm and doing something new. We started undermining that a bit.
We have not solved the problems of public education. There are still schools in America where teachers have to buy supplies for the children and where children share books. People have to be willing to see that public education is a valuable investment for the future. It doesn't take very long for young kids to go through school—by sixth grade, you can predict the dropout rate. Our high school dropout rate is much too high in the United States—a million children. I remember in the 1980s, the business community was incredibly concerned about K through 12 public education. A report was issued called A Nation at Risk. In the '90s, the business community was very involved. But in this century, businesses have had other priorities.

We're behind in green technologies, and one of the reasons is an unwillingness on the part of the current administration, for a long time, to acknowledge there was even a need to think about alternative forms of energy or saving the planet. If the federal government had said this will be our equivalent of putting a man on the moon, which energized the economy and the country under John F. Kennedy, we could be the leader in a range of new technologies that save money and build businesses. That seems to me to be sensible. But we're not doing it.
There are many other things. We're not using enough of the technology we have to improve healthcare. We have a national service program in the United States that does so much good, but it's tiny. Imagine how much more good it could do if it were expanded dramatically. But we don't have money for civilian national service because so much money, trillions of dollars, is being spent on a futile war in Iraq.

The view of America and Americans around the world has slipped dramatically. We're not respected, even in countries in Europe that are supposedly our allies. There's also a big gap between how these countries view Americans, the people, and America, the country. I have survey data in the book that show that. So why aren't we mobilizing more Americans to do good around the world?
General Colin Powell, when he was Secretary of State, suggested a Marshall Plan for Africa. This would require government expenditures. But there's also a tremendous opportunity to match the activities of philanthropists-I know many of our HBS alums are very generous and would love to get involved in solving problems in the United States and around the world. There could be matching funds from the government for worthwhile activities. In fact, the Gates Foundation stimulated many governments around the world to make contributions to childhood immunizations because of what the Gates Foundation did itself.

So I'm not saying things are bad. I am saying, however, that we could slip even more, and I think the world would suffer. People used to look to America for leadership, but I'm not sure they do anymore. I think we can bring it back.

Q: What is the white-coat economy, and why is it important?

A: This, I think, is the leading edge of the economic stimulus of the future. It's well known that in the developed world—the United States, Europe, and other mature economies—we have already moved from blue-collar to white-collar economies with the dominance of services over manufacturing. Even the manufacturing that remains is technology infused with a heavy white-collar or brainpower component.

But I think in recent years the leading edge is beginning to shift from white collar to "white coat," a term I coined to describe an economy that creates new value from discovery in science and in the helping professions. The life sciences are an important part of that-healthcare, quality of life services such as environmental technologies, and education. The white coat is a symbol for both health professionals and people working in laboratories to discover new things. Our entrepreneurs are reliant on the people who have new discoveries.

This economy is different from a white-collar economy because it's much more dependent on nonprofit organizations such as hospitals, teaching hospitals, and universities. In this economy there are often complex partnerships between companies, start-ups, universities, and federal funding. But it's also one where science and math play an extremely important role, and I'm worried that we're not educating our young people enough in science and math.

We also need the arts to open their minds and their imaginations, but we need those basic skills in science and math. Even the doctorates awarded in science and math in the United States are heavily taken by foreign nationals. It's a strength to educate foreign nationals, but why aren't we also encouraging our own young people to go into these fields?
This all is going to be a source of tremendous innovation because it's also a set of discoveries, products, and services that are good for the least advantaged parts of society. If we improve healthcare, we can expand access to it. If we have technology for schools, we can level the educational playing field so the distinction between the inner city and the suburbs isn't as great.
And, of course, green technologies are a tremendous opportunity not only to create products we can export worldwide, but also to reduce high fuel costs in the United States, including home heating fuel, which hits the poor more than it hits the rich.

Q: One of the things I enjoyed about the book is that everyone is included in terms of being the solution. It's not just a government problem. It's not a business problem. I was struck by the idea of the citizen diplomat. Can you talk a little bit about what a citizen diplomat is?

A: Involvement of the population at large has always been a classic American strength. When Alexis de Tocqueville, a French aristocrat, came to the United States in the 1830s and wrote his famous book Democracy in America, he didn't spend much time on the federal government. Instead, he highlighted community action, showing that cities and towns were replete with associations and volunteers, and that citizens took on so much responsibility—social entrepreneurs were another manifestation of America's entrepreneurial spirit.

That's a strength we can mobilize at home and abroad. Citizen diplomats are all the philanthropists and activists who get involved in grassroots change in other countries, that contribute to the quality of lives in other countries, whether it's clean water for an African village or it's sponsoring children in other countries. There are many ways that people get involved.

Businesspeople are among our best diplomats because every time they travel, every time they do a business deal in another country, they're also representing the United States informally. When I speak around the world, especially when I speak at events that have the president or the prime minister of a country on the program, I'm always asked, "Why is America doing this? What should America be doing next?" I'd say I'm just a private citizen. But I began to realize that every private citizen carries the potential to create goodwill in the kinds of partnerships they form, in communicating the values this country stands for. That's very important, and much more active than just writing checks to charity. Many people around the world think that the United States stands for greed and domination of other countries.

That's really unfair because this is also a very generous country, and I would like to get back to that spirit of generosity. One of the headlines I have in the book says generosity can unite us. We may disagree politically about grand national policy, say about public education, but we can all agree about the need to tutor 1 particular child, regardless of party or affiliation. So I would like to tone down the partisan heat and get back to the values that unite us and then show those values to the world.

By the way, this is in the interest of major corporations and businesspeople, because when there's a positive aura about America, it makes it easier for them to get in the door with customers or business partners in other parts of the world.

Q: In regard to the role of business in revitalizing America, you expand on the idea of values-based capitalism.

A: Values-based capitalism starts with principles. It does not say that the only job of a business is to make money, regardless of how. At Harvard Business School, we say our mission is to educate leaders who make a difference in the world. For IBM, one of its central values is innovation that makes a difference for its customers and the world. The company hopes that statement of values will be used to make money for its shareholders and to pay its employees very well, but it's a different way of stating the purpose. It's a way of saying we have a responsibility to live up to high standards and to use the products and services that we create to improve the world.

There are some leading-edge companies that are trying to set a higher standard, among them IBM, Procter & Gamble, Cisco, and Timberland. These companies find that their values motivate employees, get them goodwill in communities, and help them develop new products and services. IBM in particular gets new technologies out of every engagement it has when they say, "Here's a problem we'd like to contribute to solving." I think it is a new model for the future.

We don't rely on government to do everything, so it's natural to define a new kind of capitalism that in the minds of consumers and the public will be motivated by something other than pure greed.

Q: To take advantage of these 6 opportunities that you lay out, we have a crying need for leadership from all the different sectors that you talk about. In general, what does leadership in this context look like?
A: Leaders work through their messages. They need to send a positive message and one that is inclusive rather than divisive, that does not make people who disagree with them into enemies. Leaders have to be able to admit they were wrong from time to time; consistency is not a virtue if circumstances change. Admitting a mistake might get us out of difficult situations earlier, such as Iraq.
I think leaders also have to live the values they espouse. There's a great deal of hypocrisy among politicians, and personally I'm very tired of having the term "family values" being thrown around by public officials who later get caught in sex scandals, and also when family values is taken to mean "restrict the rights of women."

Leaders need to set bold goals and provide the resources for people to reach those goals. It doesn't help to have legislation with a very grand sounding name like No Child Left Behind and not give it enough funding so that schools can actually live up to the intent of the legislation.

Leaders should call us to a higher purpose. Leaders should demand sacrifices, make it clear why we stand together, why we're called on to serve the public. We had a moment after the attacks of September 11, 2001, when Americans were ready to jump in and help each other, and we missed that opportunity.

Q: Throughout your career you've talked about confidence, the power of confidence. But the portrait you paint of America and Americans today doesn't look like a very confident people.

A: I think we can restore confidence. We need more voices putting forth a positive agenda, and we need to show the practical ways it can be accomplished. That practical part is important, and that is why America the Principledhas so many examples of practical actions with demonstrated results. Pep talks mean nothing without evidence. I offer many specific examples of things that are already happening in the United States that if we could do more of, will produce will produce positive outcomes.

That's how confidence is rebuilt. It is rebuilt through words but also deeds, and through showing demonstrations of what is possible. I'm tired of all the voices of negativity. It's unfortunate that no is always an easier answer than yes. The cynics and the critics can look really smart because it's possible to poke holes in anything. I decided to take a risk by being positive. It's possible to get attention by being negative, but that gets us nowhere. It only makes the situation worse.

So here's to optimistic visions, supported by very specific citizen actions and policy proposals with demonstrated results somewhere in the country. That's the winning combination.

Excerpt from America the Principled
It takes leaders of good character—who exhibit humility rather than imperial arrogance—to guide good companies. But relying on individual attributes alone is insufficient. Good leadership is made possible not just because people have the right values, but because institutions have the right checks and balances, including abundant opportunities for dialogue and dissent. We can do the following:

  • Continue to demand transparency Disclosure and discussion are among the best ways to steer business behavior toward high standards—and high standards include high performance. Hiding bad news undermines business success and hurts the economy. Good companies can provide plausible answers to the tough questions the press and the public ask. Give airtime to the NGOs that investigate; give equal time to companies to respond.
  • Keep score Triple bottom-line reporting (financial, social, and environmental performance) is common in Europe, but at its infancy in the United States. Companies such as General Electric and IBM are issuing "corporate citizenship" reports and seeking standards for evaluating their performance against citizenship goals. Consumers can ask about every aspect of performance; investors can demand it. People should applaud the good companies, and vote with their wallets.
  • Use bully pulpits to push the highest standards The United Kingdom has a minister for corporate social responsibility; in the United States, we prefer convening committees and councils with a private-sector chair, such as President Bush's corporate responsibility committee. In either case, public officials can make noise and broadcast a big message about what is expected. The stick of regulation can be waved in front of companies even when not being used to strike. The carrot of praise and publicity for voluntary compliance and above-and-beyond contributions can be held out frequently, and not just at annual award dinners. Political leaders can use their convening power to bring companies to the table to sign on to sets of principles in relevant areas, akin to the Equator Principles, which puts their commitments on record. And business schools represent another set of pupils for educating future business leaders and rising executives about values.
  • Encourage local action When the Chicago city council passed its own minimum-wage law for large retailers such as Wal-Mart, above the national minimum wage, the mayor (appropriately) vetoed it; but the action brought attention to public concerns about the discounter's employment practices. Communities can set standards and work with businesses to meet them. If communities are sufficiently strong in the assets world-class companies seek, such as human talent, communities can make their other values clear. BankBoston's inner-city banking initiatives were triggered by a Massachusetts report on racism and failures of banks to provide services in poor neighborhoods; that one bank's response established financial services for neglected areas, which became a profitable business for the bank. And sometimes communities can act on issues without waiting for the government. California and Maryland did this with stem cell initiatives. Or consider that a coalition of U.S. cities committed to implement the Kyoto Protocol for environmental standards that the Bush administration refused to sign.
  • Expect politicians to raise standards to what the public wants Politicians should not be creating standards to save money for an industry (a perennial consideration invoked around minimum wage, health benefits, or energy consumption). Higher standards can stimulate innovation because creative companies identify efficient new ways to meet them. And innovation, as we have seen, is the best way to secure the future.

This was taken from an article and interview by Sean Silverstone, published on November 13, 2007 in the Harvard Business School Working Knowledge Newsletter. You may find the article at The summary comes from the book: America The Principled by Rosabeth Moss Kanter. Copyright 2007 by Rosabeth Moss Kanter. Published by arrangement with Crown Business, a division of Randomhouse, Inc.


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