From Reimagining Capitalism to Reweaving Ourselves: Leadership for a Sustainable and Caring Future in a World on Fire
Q&A with Rebecca Henderson
Rebecca Henderson is one of 25 University Professors at Harvard, a research fellow at the National Bureau of Economic Research, and a fellow of both the British Academy and the American Academy of Arts and Sciences. Highly accomplished as a scholar and teacher of innovation and organizational change, she garnered worldwide acclaim in 2020 for her book Reimagining Capitalism in a World on Fire. The book is based on a popular elective course of a similar name that Henderson taught at Harvard Business School – a course that also became a popular audit choice for Fellows in the Advanced Leadership Initiative seeking guidance on leveraging their business and investment careers to promote positive social change.
The book Reimagining Capitalism in a World on Fire was published at a critical time of introspection by the business community. The highly influential Business Roundtable, in late 2019, had issued a restatement of its view on the purpose of corporations, shifting from a sole focus on shareholder value to a broader commitment to all stakeholders, creating momentum for the burgeoning movement in corporate sustainability and environmental, social, and governance (ESG) investment frameworks.
Soon after Reimagining Capitalism was published (which the Social Impact Review reviewed), the COVID-19 pandemic ensued, followed by increased right-wing populism, which created the current backlash to stakeholder capitalism movements and warranted a check-in with Professor Henderson. After attending a session of a new course Henderson is teaching university-wide at Harvard – Reweaving Ourselves and the World: New Perspectives on Climate Change – David Cifrino and Keith Forman met with her this past summer to learn how the focus of her work is evolving to meet the current moment.
David Cifrino: Professor Henderson, thank you very much for taking the time to speak with us. It has been five years since you published Reimagining Capitalism. At the time, you wrote that three truths were keeping you up at night, which you detailed in part as follows:
“First, the world is on fire. The burning of fossil fuels is destabilizing the earth’s climate, raising sea levels, and driving mass extinction. …
Second, wealth is rushing to the top. The fifty richest people own more than the poorer half of humanity. Billions of people lack access to adequate education, health care, and the chance for a decent job. …
And third, the institutions that have historically held the market in balance – families, local communities, the great faith traditions, government – are crumbling. Waves of anti-immigrant sentiment threaten to destabilize governments, and a new generation of authoritarian populists is taking advantage of a toxic mix of rage and alienation to consolidate power.”
Despite all that you expressed hope – that passionate students, purpose-driven CEOs, and innovative entrepreneurs, among others, gave you hope that a profitable, equitable, and sustainable capitalism was possible.
So, five years later, do you still have hope that these problems can be overcome? And, with or without hope, how should we deal with the anger, fear, despair, and other human emotions that many of us feel about this polycrisis that humanity faces?
Rebecca Henderson: I think of hope as a choice rather than as an estimate of the odds of success. I am not optimistic in the sense that I think, “Oh, yeah, we have a few problems; we're definitely going to fix them; no problem.” Realistically, given our recent political developments, it has become significantly harder to create the kind of reimagined capitalism I imagined, but it’s still entirely possible. We have the technologies and the resources to give everyone on the planet a safe and healthy life and to dramatically slow the rate of global heating and ecosystem destruction. And many, many people would like this future!
And as to how to deal with the very difficult emotions that can come up at times like this – and certainly come up for me, and I think nearly everyone I work with – I think two things are important. One, it’s important to face them, and second, to do so not alone. This is a truism, but one needs to process the emotions that can arise and to talk them through with friends or trusted advisors. I am also a big fan of developing some kind of personal practice that centers you on your deepest values and your reason for living. Why are you here? What are you focusing on? What are you hoping to achieve? Because I think it is touching back into that core that gives us a kind of solid base to stand on in times like this. That, and being surrounded by a community or part of a community that holds the same values and is trying to move in the same direction. In many ways, this is a very exciting time to be alive – a time in which how we show up has the potential to make a huge difference for the future of humanity.
So, it’s not about the odds of success. It’s about acting because it’s the right thing to do – for the love of our children and of this beautiful world.
Cifrino: Your current course, Reweaving Ourselves, is offered not just to Harvard Business School MBA students but also those from other Harvard graduate schools, including, among others, the Harvard Kennedy School of Government and the Harvard Divinity School. What are you seeking to convey to these potential leaders of tomorrow, in addition to what you've just said about hope?
Henderson: In Reimagining Capitalism, my course oriented to MBAs, I was focused almost entirely on what businesspeople could do to address the issues we face. Harvard MBAs were about 20% of the class this spring, but Reweaving Ourselves is wider than the original course in two respects. First, it looks not just at what businesspeople can do but also at what people in government, in law, in media, in education, and in the NGO and nonprofit sectors can do. I am much more focused on how addressing the big problems we face will require multi-stakeholder partnerships. I was keen to bring students from a wide range of backgrounds into the room and to explore what it means to act together. I had, for example, a large contingent from urban planning this spring and from public health, and both of those are disciplines in which people are very much accustomed to forging coalitions to address tough problems. One of the key moments in the class turned out to be when the MBAs realized that they needed everyone else in the class – and when everyone else realized that they needed the MBAs! So, that's one way in which Reweaving is different from Reimagining.
Second, Reweaving pays much more attention to the non-financial motives for action and to the need to cultivate a deep sense of what we're about and where we're going. In Reimagining, my stance was generally a fairly instrumental one. I talked about purpose and the idea that it’s important that one thinks of profit as a means to an end and not an end in itself, but mostly I made the business case for action. I stand by everything I wrote, but I have come to believe that it’s also very important to be aware of the moral case for action. Burning up the world will be terrible for business – but it’s also a huge moral wrong that will resonate for generations.
In Reweaving, I also focus much more on what an MIT colleague, Otto Scharmer, calls the “social soil,” as well as on social structures. The social soil is everything that happens below the surface: the trust we have for each other, the excitement we have in together working to make our community better, the ability to act with wisdom and compassion and to be motivated by curiosity and care, rather than assuming that human beings are just profit-maximizing animals and that the only way to motivate them is through financial incentives.
In Reweaving, I have really tried to open the lens wider and say there's another part of most humans that's also important to bring into this conversation. And that's the part that's deeply relational, that cares very much about the future and the well-being of the entire community, that is in touch with the fact that as people we're deeply dependent on those around us and on the natural world in which we're embedded.
Keith Forman: I love that, Rebecca, and I was totally moved by the class that David and I attended, not just through your teaching but also because of the contributions of your students, who have decades of possible impact ahead of them. They need to have pathways for action. There certainly is an interdisciplinary aspect to action on climate change. It’s a global problem, and it’s a problem of the commons, and therefore we need everyone to participate in the best ways that they can. Even though collective action problems are always challenging, could you have ever imagined, when you wrote Reimagining Capitalism, the lack of courage being shown by corporate leaders today in the changed political context domestically following the last U.S. election? We look to these people for leadership, but I don’t think we have seen much of that lately.
Henderson: I’m afraid that you’re right. But to be fair, it’s a scary time to disagree with the current Trump administration, and if you're running a large company and you have the livelihoods of, you know, tens of thousands or hundreds of thousands of people dependent on you, I can imagine that business leaders might well feel they need to be circumspect. Indeed, I know of several firms where, although there's still deep interest and investment in the longer term and in tackling some of the issues I talk about in Reimagining Capitalism, they're less prominent, say, on the company's website, or they've changed the terminology around what they're doing.
So, there certainly still is positive work going on. But yes, in my dreams I had hoped that at a time like this there would be a coalition of business leaders who'd say, “Well, no, we need to make money, so we do want to be careful – but making money is much easier in a society in which the law is respected and enforced and in which government, by and large, stays out of the business of the private sector.” And I am disappointed that that hasn't happened. But in some ways, I'm not surprised. In my book, I talk about business playing a role in rebuilding fallen or broken democracies, and one of the things that was clear in terms of the examples I could find was that business leaders had only really played an important role in rebuilding societies and focused more on the public good when the societies had had really a quite serious smash-up.
This is not to say that I don't believe in what I wrote in Reimagining Capitalism anymore. When I wrote that book, it seemed to me a large number of political actors, consumers and employees were very much asking for this kind of action against these big problems. And in that context, a business leader could step up, could play a leadership role, and could make a real difference for their companies. I don't think the consumer or employee environment has shifted that much, but as the political environment has shifted significantly, I fully understand business leaders wanting to be careful about what they say in public and what they do. As this administration has demonstrated, there is enormous power vested in the hands of the state, and to deliberately go against the wishes of the executive can seem like a very risky move right now in the U.S.
Forman: Reimagining Capitalism was a class designed for second-year students pursuing MBAs. I believe you also taught a condensed version to participants in some executive management programs as well as to executives of individual companies. Do you believe there are transferable lessons from your current class curricula that can be more broadly disseminated to an audience of business and political leaders? Or is it too late for them?
Henderson: It’s interesting you should ask this, since I’m just about to teach a version of Reweaving to a group of senior mid-career executives, and I’m not planning to change anything. My hope is that these ideas are just as relevant – indeed, perhaps even more so – to people in more senior positions.
Forman: There's a presumption that where we are in global warming is not reversible by science, not reversible by policy – basically, not reversible. There's an ask for acceptance that the world will be at least 1.7°C average mean temperature warmer, probably going north of 3.0°C. How do we preserve in that future environment what we love? What part of our natural systems, what part of our social systems, what part of our political systems can be preserved?
Cifrino: And let me supplement that with a question that relates to a perplexing dichotomy regarding climate change that you have identified: that although the problem can certainly be seen as urgent and dire, no consensus report of climate scientists or any severe weather event seems to produce sufficient urgency of action, as if there's ample time to avoid the most adverse consequences caused by burning fossil fuels. Is humanity like the proverbial frog sitting in a pot of water being slowly brought to boil, doomed not to recognize its coming fate until it’s too late?
Henderson: These are two very related questions. First, as to what is likely to happen: I am not a climate scientist, but I have friends who are, and my understanding is that it now seems likely, as you suggest, Keith, that we will blow past 2.0°C, and indeed the current forecasts – which incorporate significant renewables buildout – suggest that we'll go past 3.0°C. Fossil fuel emissions have stabilized but not dropped, and it looks as though most of the renewables that are coming online will be used to meet the enormous demand coming from AI. Such a temperature increase will have very profound effects on many of the world's natural systems and on human civilization, and, as I'm sure you've seen, a number of the identified tipping points – such as when the Antarctic ice is likely to melt or whether or not the Gulf Stream is likely to falter – now look more likely than less, and much sooner than anyone had anticipated even five or ten years ago.
So, it does look as though the physical environment will be radically destabilized, and we will see enormous damage to the ecosystems on which we rely. Just to make that a bit concrete – and I recommend your readers to the excellent website probablefutures.org for the latest projections – it looks as though large parts of India, tropical Africa, and Central America will become uninhabitable really quite soon, and that there will be very severe drought in much of Southern Europe and the southern and western U.S. There is a real risk that one or more of the major food baskets will fail. Yet – as you say – those of us in the 1% seem to be content with business as usual.
It’s the words of E.O. Wilson: our problem is we have godlike technology, medieval institutions, and Paleolithic emotions. We can do, if we decide to act as a species, almost anything. So, the issue is, I think, literally waking up to what’s happening and reframing our predicament as an opportunity for a fundamental rethink. What is our relationship with the natural world? What is our relationship with each other? What do we really value? Are we OK with the idea that, on our current course, many millions of people will suffer and die? That our children will face a radically more unstable climate and more impoverished world?
We're facing an epidemic of mental health issues. Ours is the only species whose young kill themselves, and we're seeing more and more of our young people in deep despair, seemingly having lost any sense of meaning or purpose or belonging. A third of adults routinely suffer from depression. Is all this a coincidence? It seems unlikely. It feels to me much more plausible to believe that, at some level, people can see what is happening and are shutting down because they cannot see a pathway forward. This, like all great emergencies, could be a moment to renew and revive – to turn toward a different vision of what human society could be like, one that would be much more focused on each other and much more focused on enhancing, enjoying, and participating in the natural world.
I'm not suggesting we must go back to eating turnips in huts – which is what my ancestors, who were Scottish peasants all the way down on both sides, did for many generations. We have the technology to have perfectly decent lives, but we cannot all have five-hundred-foot yachts and two-hundred-million-dollar weddings. Those of us who have been deeply privileged will need to cut back a bit – but given the alternatives, this will almost certainly increase our happiness. And for the vast majority of the world's population, it is possible that what's coming next could be much better. This could be a society well worth working and fighting for.
Cifrino: I noticed that you assigned portions of Pope Francis’ groundbreaking 2015 encyclical on climate change as a reading in your Reweaving class. And I also note, incidentally, that the Harvard Business School and the Harvard Divinity School are perhaps the two furthest points from each other, both physically and metaphorically, at Harvard. So, I think it’s interesting that you've brought those two together. Why do you think faith is important? Are you suggesting that some sort of spiritual revival, secular or otherwise, might be the cure for what ails us as individuals, and a society?
Henderson: I’m very careful about using the word faith. I think that's an important route for many people to access the deepest part of themselves and their deepest values. But it’s not the only one. You can go all the way back to Aristotle and talk about the importance of cultivating values and the idea that the ends of human life are to become the kind of person you would like to be: wise, compassionate, balanced, restrained, without needing to bring in any kind of required existential beliefs. What I think this moment calls for is a real turn away from the idea that material consumption is the only source of well-being and happiness. Most people would not actually say that in public, but we've been acting as if it is – as if the only thing we really care about is a new car every five years. Every major faith tradition – and all of modern psychology – would, I believe, agree that that’s crazy. Things are important – we all need enough to eat and a safe place to sleep – but they are not, in the end, the source of real happiness.
Cifrino: In his encyclical, Pope Francis wrote that “Earth, our home, is beginning to look more and more like an immense pile of filth,” but, less provocatively, he also wrote that “the human environment and the natural environment deteriorate together. We cannot adequately combat environmental degradation unless we attend to causes related to human and social degradation.” How do you see this linkage in terms of finding the social cohesion that will be necessary to combating climate change?
Henderson: I see the link in terms of a focus on place and community. Humans have historically always been really connected to the places they live in, and as climate change gets worse and as our natural systems come under increasing threat, we're going to have to work at the local level to heal, guard, adapt, and restore as best we can. We know from a lot of work by many social scientists that in an emergency humans will often pull together – and, with a lot of luck, this will greatly increase not only social cohesion but also our happiness and well-being.
Forman: There are government policy levers, private sector levers, and personal behavior levers that are applied to varying degrees to address climate change. Do you see a geopolitical security lever becoming more important as the rise in protectionist policies could enable some countries to outcompete others in the race to decarbonize? I’m specifically thinking about the U.S. abrogating the lead to China in the development of greener technologies such as electric vehicles, batteries, and so on.
Henderson: I would love that to be a significant motive for action, but I don't see it. The U.S. is a fossil fuel superpower and very proud of it. And, as you know, renewable energy is still less than five or certainly less than ten percent of the world's energy consumption. So, if what you're interested in is raw power, fossil fuels are much more important than renewables. I do think there's a security angle in that.
As an example, if the Amazon dries up – which seems increasingly likely in the next 10 years – if more trees are cut down and that destroys the water cycle in the Amazon so that basically the whole area turns into a dry savanna. If that happens, the entire hydrological cycle of the Western Hemisphere will be disrupted. And I know reputable people who think that means that there will be no rain in the Midwest, and that would be a major blow to the security of the United States. It would destroy the grain baskets in the American Midwest, so that kind of risk, I think, might prompt action. If the Antarctic ice shelf slides into the sea – which again was thought to be very low probability in any near time, but is now looking increasingly likely much faster – there’s enough water in Antarctica to raise sea levels by 60 meters. That would flood many of the world's military bases. And so, perhaps again, there's a reason to act. I would have thought the destabilization of the world's food systems was enough to drive action, but apparently not enough. So, yes, I think there are security concerns that could drive action. But I don't think China becoming a leader in renewables is enough.
Cifrino: Climate scientists teach solar radiation balance – the equilibrium between incoming solar radiation and outgoing radiation from the Earth – and that even if we stop burning fossil fuels, the planet will, by the end of the century, certainly be much warmer in the context of a new solar radiation balance. Hopefully, one that does not result in the mass extinction of humanity, but otherwise that seems to be our bracing, impending reality – but also, maybe, an instructive metaphor for how to achieve the necessary collective action. If you agree, do you think that we, as individuals, need to find a new balance regarding our own personal ambitions and societal commitments, and the ways in which we interact with nature and with each other?
Henderson: We must learn that our well-being is not solely a function of meeting our own needs. We need only look at some of the richest members of our own society to see that focusing only on oneself is a very unskillful way to live. There's a sort of frenzied consumption, you know. “I'm going to have the Rolling Stones at my party for six million dollars.” Really? I mean, this is crazy. It can feel as if we're living in the last years of the Roman Empire, with people just piling on stuff and status in a desperate attempt to bolster their own self-image. I think most of the world's population know that real happiness, deep happiness, is found in the context of taking care of the people around you and of meaningful work in service to the whole.
And as things get worse – and they will get worse – life will get very difficult. My belief is that leaders should be trying to build what are sometimes called “islands of coherence” – something like lifeboats or monasteries or lighthouses that can show us, concretely, what’s possible. One interpretation of complex systems theory is that the behavior of complicated systems is significantly determined by the quality of the interactions between the elements of the system. If we can improve the quality of our interactions with each other – so we really treat each other with dignity and respect, and not as things to be exploited or used – and we really treat the natural world as an integral part of our well-being and a source of enormous awe and amazement, that might just change the behavior of the whole system, really change our trajectory. Who knows? I think it’s behavior that's worth trying, even if it doesn't work. You know there are some things you do, even if you're not sure they will work. They’re still the right things to do.
Cifrino: I heard your fellow economist and University Professor at Harvard, Larry Summers, say a while ago that he thought the most important solutions to global warming would more likely come not from all the talk, talk, talk in conference rooms at various international climate summits like COP, but rather from innovation in laboratories around the world.
Do you believe, as some have suggested, including the authors of a book you've recommended – Fixing the Climate; Strategies for an Uncertain World by Charles Sable and David Victor – that climate change diplomacy, such as the Paris agreement, is less effective than approaches that foster innovation and experimentation, such as the successful Montreal Protocol regarding depletion of the ozone layer.
Henderson: I think we overwhelmingly need both. We certainly need the technology as fast as we can get it. But although I believe we could reduce energy use, perhaps by about 50%, and make money in doing so, there will come a time at which we will have to pay to reduce the use of fossil fuels. And that's a massive collective action problem and can only be solved by global diplomacy, or possibly the emergence of a massive social movement that pushes governments everywhere to agree to global diplomacy.
Of course, we need innovation. Who would have believed, 20 years ago, that solar or wind power could be cheaper than coal? But now they are, and that makes a viable future infinitely more likely. But there are problems that innovation cannot solve – like the need to transfer massive resources to the Global South so that they can decarbonize successfully, or the need to reshape the global food system.
Forman: Do you see momentum in higher education and/or in secondary schools to encourage engagement on climate-related issues by students not focused on the pure sciences? Making room at the table for all disciplines, diverse interests, and skill sets to mitigate or adapt to our rapidly warming world – not letting complacency and hopelessness set in. To clarify, not a single class such as yours, but a school-wide integration of multiple disciplines over a period of a couple of years or longer to activate a holistic, all-hands-on-deck approach to developing pathways forward.
Henderson: Alas not! There are wonderful faculty everywhere doing this work on the ground – but to date they remain few in number and mostly far from the mainstream. I completely agree that we need an all-hands-on-deck approach and some fundamentally different approaches to education, but I don’t yet see the kind of momentum one would need to make this a reality at scale.
Forman: We were impressed by how engaged your students are in discussion and how you engender self-reflection among them, starting each class with a few minutes of quiet mindfulness and ending in a large circle of the several dozen students each reciting a line of poetry (for example, from Invitation by Mary Oliver in one class and What You Missed That Day You Were Absent From The Fourth Grade by Brad Aaron Modlin in another). What are your takeaways from your students in the Reweaving class?
Henderson: I was struck by the fact that there was such an appetite, such a hunger, to come together with other students who shared one’s values and to be in community together. They kept reminding me that change takes focus and energy – and yes, often a business case – but they also reminded me that cultivating joy can be just as important as learning to raise money. It is a joy to see the students gain hope, gain connection, gain courage, and get access to concrete, multidisciplinary solutions for the problems that we face.
Forman: And what is next on your journey?
Henderson: I'm hoping to write a book and to put this course online. I hope, at a very, very low price – possibly a zero price – so that many people can gain access to these ideas and to each other. Because I envision an online course which tries to create the same sense of community we were able to connect in the classroom. So just the usual thing professors do – write, research, and teach – but hopefully supporting people in this very difficult time.
Cifrino: Thank you again for speaking with us and for all that you do.
About the Authors:
David Cifrino was a 2021 Fellow and 2022 Senior Fellow in Harvard’s Advanced Leadership Initiative. David is also a former partner and Senior Counsel at the law firm McDermott Will & Schulte LLP where he is a co-founder of the firm’s Sustainability, Impact and ESG practice group.
Keith Forman is a 2020 Harvard Advanced Leadership Initiative Fellow with over four decades of experience in leadership positions in the energy industry. He currently serves as the Chairman of Capital Clean Energy Carriers, a shipping company based in Greece. Over the years, he has advised global infrastructure and private equity funds on midstream energy investments, served as the CEO for renewable energy companies, and held positions as a senior financial executive in large midstream energy companies.
This Q&A has been edited for length and clarity.