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Illustration by David Plunkert |
In multinational corporations, for example, “everybody is frozen,” says American Express Chairman and CEO Kenneth Chenault. “What has not kept pace in the business world is an understanding of how the uncertainty of the geopolitical environment has impacted business.” The ability to seize opportunities or make a profit often depends on unfamiliar and unpredictable factors, such as the reputation of the company and its grasp of changing trends.
Meanwhile, governments, which were previously relied upon to manage the problems of public society, can no longer spend or regulate their way into requisite solutions. “In the past, corporations could depend on the fact that government defined the answers,” says Stephen Merrill, formerly the governor of New Hampshire and currently president of Bingham Consulting Group LLC. But now, he says, business leaders are afraid that “government doesn’t even understand the questions.”
Moreover, there is a subtle but detectable waning of confidence within the public sector as governments around the world find themselves accountable for issues without easy answers: the changing role of the military; new economic uncertainties as emerging and established industries compete; and rising costs of health care. These problems often occur at an unprecedented and almost incomprehensibly vast scale. For example, as former World Trade Organization Director-General Renato Ruggiero notes, “Our current Western society fails to acknowledge two megatrends: the world population growth in the next decade, and the fact that this growth will be primarily driven from nonindustrialized countries. This will increase the immigration pressures at our borders and cause a change in the demographic structure.”
Nongovernmental organizations (NGOs), for their part, are finding that although expanding communications and the Internet have given them more voice than ever before, the demand for their work has increased commensurately, competition for funding has escalated, and they no longer understand constituents’ needs as easily as they used to. “We’ve had blinders on,” says Paul Leonard, the former CEO of Habitat for Humanity International. “We need to change course, to become more of a partner and a player; more knowledgeable about the large systems that exist and the role we can play in them.”
The root cause of the challenges confronting these leaders is complexity: the growing density of linkages among people, organizations, and issues all across the world. Because people communicate so easily across national and organizational boundaries, the conventional managerial decision-making style — in which a boss exercises decision rights or delegates them to subordinates — is no longer adequate. Solutions require multi-organizational systems that are larger and more oriented to multilateral action than conventional cross-sector approaches are. In such systems, the most successful leaders are not those with the best technical solutions, the most compelling vision, or the most commanding and charismatic style. The “winners” are those who understand how to intervene and influence others in a larger system that they do not control. We call this type of larger system a “megacommunity.”
Three-Sector Intersection
A megacommunity is a public sphere in which organizations and people deliberately join together around a compelling issue of mutual importance, following a set of practices and principles that will make it easier for them to achieve results. Like a business environment, a megacommunity contains organizations that sometimes compete and sometimes collaborate. But a megacommunity is not strictly a business niche. Nor is it a public–private partnership, which is typically an alliance focused on a relatively narrow purpose. A megacommunity is a larger ongoing sphere of interest, where governments, corporations, NGOs, and others intersect over time. The participants remain interdependent because their common interest compels them to work together, even though they might not see or describe their mutual problem or situation in the same way.
