Innovation and change in business often mean a shiny new product or a “re-branding” with a redesigned logo and an acronym in a sans serif font.
But what interests me, as someone who has worked for years in corporate social responsibility, is the sort of innovation that changes how a business does business. I’m talking about how decisions get made and how resources get allocated; how projects and departments get evaluated; what gets people promoted and fired; how companies interact with partners, suppliers, the myriad constituencies they affect, and the natural environment. How, and why, do those systems and processes change?
External forces can help lead a company to change. Regulators create laws and policies (and sometimes enforce them); companies compete with each other (sometimes to the top, sometimes to the bottom); investors, consumers, and the media can all exert pressure. But whatever external forces suggest, the company decides whether and how to internalize those pressures.
"The company decides"—what does that mean? Companies are not the command-and-control systems they perhaps once were, where CEOs or boards make pronouncements and troops fall in line. Businesses are not people (despite some legal and other opinions to the contrary). They don’t “make decisions.” They are collections of human beings, rife with competing interests and fluctuating power dynamics. In such a complicated system, who actually drives change?