It is hard for anyone to be against the idea of inclusive prosperity. Of course the bounty produced by economic growth should be broadly shared. But the devil is in the details, and when people advocate for inclusive growth they don’t always have the same things in mind.
Some, for example, are inspired by Thomas Piketty, who seems to have singlehandedly set a new agenda for economics research. This group focuses on reducing the disturbing inequalities in individuals’ incomes and wealth.
Others, like the Legatum Institute, think of prosperity less in financial terms and more as overall well-being, and focus on measuring and growing all its components in societies around the world.
A third group takes a more managerial approach; and that’s the one we want to focus on here. When Eric Beinhocker and Nick Hanauer took on the topic, they put it this way: “Prosperity in a society is the accumulation of solutions to human problems.” By emphasizing solutions as the engine of growth, Beinhocker and Hanauer wanted to cast capitalism as a force for prosperity (as the system that churns out the most constant stream of superior ones). But their way of thinking about prosperity also offers direction for any managers who want to work harder to make the world better off: your mission is to imagine, develop, and launch more life-improving solutions, especially the kinds of goods and services that improve ordinary people’s lives. Businesses have a variety of social responsibilities, but the essential one—and the main reason that private enterprise is given license to operate—is to innovate.
We’d like to add a wrinkle to Beinhocker and Hanauer’s argument. If we’re thinking about prosperity in broad terms, then we should also recognize it isn’t just the solutions themselves that improve quality of life – it’s also engagement in the act of solving. Participating in the satisfying work of innovating enriches lives by endowing them with purpose, dignity, and the sheer joy of making progress in challenging endeavors. Imaginative problem-solving is part of human nature. Participating in it is essential to the good life – and no elite minority should have a monopoly on that.
So this raises the question: How do we enable more people to get involved in solving problems? Every person is capable of creative thought and action. Great managers know how to tap that superabundant resource, and they recognize that pooling creative energy usually accelerates progress. Many minds make lighter work.
But for this to happen broadly, more organizations need to recognize that their innovation mandate is not just to design new products and services, but also to redesign how work gets done. The digital age gives us a tremendous opportunity to do that – but also comes with its own challenges and risks. How businesses continue to develop and deploy information and communications technologies will profoundly affect whether prosperity is inclusive or exclusive. At their best, today’s increasingly capable machines enable and empower people to collaborate more effectively, and they make learning from experience scalable. Collaborative platforms allow people to combine their measurements and observations of large-scale phenomena (such as water quality), while advances in machine learning, artificial intelligence, and sheer computational power extend the powers of human intellect just as earlier technologies amplified human strength.
But at their worst, smart machines have the potential to marginalize human contributions, automating cognitive work and leaving society with, as Bill Davidow and Michael Malone vividly phrased it, “hordes of citizens of zero economic value.” The situation creates huge responsibilities for politicians, educators, executives, and others to manage the transition and the hardships that may come with it.
We find ourselves, therefore, at an important crossroads. The technologies our species is developing might either hold the keys to unlocking human potential — or to locking it up more tightly than ever. Indeed, they could even transform what we think of as human potential, given the startling new combinations of technological and human capabilities being devised. (No need to wait for Elon Musk’s Neuralink. As DARPA’s Arati Prabhakar has described, the merging of humans and machines is happening now. )
Clay Christensen likes to remind innovators of the importance of remembering the essential “job to be done” by their offerings – what is it that customers “hire” your product or service to do for them? In that spirit, what is the “job to be done” by the practice of management itself? What is the job that society needs to get done that it turns to competent managers to do? Increasingly, that job is not only to produce better goods and services more efficiently, but to organize individuals to collaborate and create together in unprecedented ways. The business leaders who get that job done will be those who make the most of human potential, and manage to make prosperity inclusive.
This post is the first in a series leading up to the 2017 Global Drucker Forum in Vienna, Austria – the theme of which is Growth and Inclusive Prosperity.
Originally posted on https://hbr.org/, 3 April 2017.
About the authors:
Richard Straub founded the nonprofit Peter Drucker Society Europe after a 32-year career at IBM. He is on the executive committee of the European Foundation for Management Development, is Secretary General of the European Learning Industry Group, and serves the IBM Global Education practice in a strategic advisory role.
Julia Kirby is a senior editor at Harvard University Press and longtime contributor to HBR‘s pages. Her newest book (May 2016) is Only Humans Need Apply: Winners and Losers in the Age of Smart Machines, with Tom Davenport. Follow her on Twitter @JuliaKirby.