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Julie Battilana is the Joseph C. Wilson Professor of Business Administration in the Organizational Behavior unit at Harvard Business School and the Alan L. Gleitsman Professor of Social Innovation at Harvard Kennedy School, where she is also the founder and faculty chair of the .

In her research on social innovation, Professor Battilana identifies that are essential to create successful change:  agitators, who bring attention to social problems; innovators, who come up with solutions to those problems; and orchestrators, who lead the action necessary to implement the solutions. Today’s agitators are calling out inequality (in terms of both wealth and power) along with climate change and environmental degradation, among many other critical issues. But agitation isn’t enough. For example, following the 2008 financial crisis, the Occupy movement highlighted many problems with the American economic system, but ultimately the movement didn’t fundamentally change that system. The movement lacked clear innovation: new arrangements to replace the old. To push change further now, Battilana takes on this sort of innovation, encouraging us to pursue new models of purpose and power in organizations — especially companies.

Purpose

What is the purpose of a company? Is it just to maximize profit like most economists assume in their models or demand in their ? That usually seems to be the consensus among corporate decision makers. Many corporations are still boosting salaries for top earners and targeting short term returns to investors with no regard for the effect on inequality, and they are ruining ecosystems and emitting ever more carbon dioxide despite disastrous consequences for the environment and climate — all in pursuit of profit.

However, corporations don’t need to run this way, and many people don’t want them to.  agree that companies should “consider the interests of the communities where they operate” and “follow through on climate commitments.” To some extent corporations have responded to this desire for change, pledging to be more ethical and sustainable, but most of the corporate response has been .

Battilana argues that tackling the massive problems we face requires divergent change: not just cosmetic changes, but changes to the template of organizations themselves. This means challenging deep-seated norms, like the commitment to maximizing profits above all else, and replacing them with new ones. Companies need a new purpose. Specifically, companies should balance profit with social and environmental goals — what Battilana and other scholars call the “triple bottom line,” instead of the single bottom line of profit. Organizations which embrace the triple bottom line are called hybrid organizations, and they exist on a spectrum: between purely profit-oriented corporations and purely non-profit, mission-based organizations. In the middle of this spectrum are social enterprises like Mondragon and Grameen Bank.

Battilana studies organizations like these and asks how they can maintain three objectives at the same time. She’s learned that hybrid organizations face unique challenges, but these challenges are surmountable. In particular, they face 1) divergent expectations among stakeholders, many of whom come from the extremes of the hybrid spectrum, 2) mission drift as the need to maintain financial stability may overcome social and environmental goals, and 3) indecision/conflict over competing objectives. Fortunately, there are tried and tested practices which can manage these challenges. They cover all aspects of an organization: strategy, culture, recruiting, and so on. Some are clear from first principles (for instance, rewarding people based on all objectives, not just profit), but others require trial and error. For example, in a study of five organizations over 16 years, Battilana and her co-authors found that consistently maintaining attention on all objectives inside the organization and on the board helped prevent the emergence of conflicts seen in organizations where attention shifted between goals from year to year. There’s still a lot to learn, but hybrid organizations are undoubtedly viable.

Power

If we were to describe the power structure of most companies in political terms, we would have to acknowledge that they are quite , with bosses sometimes acting as dictators over their worker subjects. Although most people balk at political autocracy, we often unquestioningly accept it in the workplace. It’s possible to run workplaces in a more democratic fashion: giving decision-making power to workers as well as executives. But, most companies don’t. Why is this?

There are practical justifications for concentration of power: the ability to take quick and decisive action with minimal deliberation and negotiation. However, this trades off against the benefits of distributed power like requiring decisions to draw from multiple viewpoints and areas of expertise (especially important when pursuing multiple objectives like the triple bottom line). And in addition to the practical arguments, there are principled arguments for distributing power: giving people voice and autonomy is good in and of itself, and it reconciles the dissonance between democracy in political life and autocracy in work life. Battilana has seen organizations adopt workplace democracies for both practical and principled reasons.

Workplace democracy creates a fundamental shift in power, going beyond things like self-managed teams and worker voice, which have been the topic of most academic research in this area. A true democracy doesn’t just offer control over small day-to-day decisions or a platform to speak; it bases important decisions on peoples’ will. Less research has been done on this sort of arrangement, in large part because fewer organizations have adopted it (those who have the ability to make the change are reluctant to give up their power). However, the arguments in favor of democratization merit further investigation.

Choosing better

Combining the strands of purpose and power, Battilana looks to organizations that have adopted both a triple bottom line and democratic structures as alternative forms of organizing worthy of further attention. She gives the example of , a “worker cooperative organized by Brazilian women immigrants, which sells housecleaning services using natural products that are healthier for domestic workers and for the environment.” Vida Verde has operated successfully for years, and it offers its workers dignity and control over their lives.

We don’t know everything about the best structure for organizations. Battilana has a number of ongoing research projects on these topics, and many more open questions. How well do triple bottom line workplace democracies achieve their objectives? How does this depend on institutional context? But there’s no question that there’s room for improvement in our conception of purpose and power in companies. With people trying out new models all the time, we are presented with a real opportunity to learn from their efforts.

The essential point Prof. Battilana makes is that power arrangements and the purpose of organizations are social choices — not just by the organizations themselves but by society more generally. They reflect norms as well as laws and modes of financing. Although we often take these things as given, they are changeable. And if the prevailing systems are failing — creating inequality, destroying the environment, and undermining democratic values — they should be changed.