The annual meeting of the World Economic Forum in Davos is usually a forum for billionaires to hobnob and celebrate the glories of capitalism. But with the climate crisis gaining momentum and signs of dissatisfaction with inequality boiling up across the world, "Davos Man" seems to have been more introspective than usual this time around.
"Everyone at Davos this year really wants you to know that the corporate world is cleaning up its act," opined Tim Wu in the New York Times. "Walking around, I thought at times that I had mistakenly wandered into a business-casual Bernie Sanders rally."
Microsoft CEO Satya Nadella was fully on board with the shift in tone. In an interview with WEF founder Klaus Schwab, Nadella delved into the challenges capitalism is facing, the role of companies and their leaders in addressing them, and the mindset needed for changing times.
1. Prosperity by Colin Mayer
When Schwab asked Nadella for his thoughts on how companies can "do good and do well at the same time," Nadella immediately looked to books to frame his answer, noting that "last year, perhaps there were more books written on capitalism and how capitalism needs to be redefined than ever before."
One of them, Prosperity by Oxford economist Colin Mayer, offers a definition of the social purpose of companies that Nadella particularly likes: "A corporation finds profitable solutions to the challenges of people and the planet."
"The key word is 'profitable,' because we do know that capitalism does have the ability to allocate resources in the most efficient way," he explained. "But the other key word is 'the challenges of people and the planet.' It's not about creating more challenges to people and the planet but to have real solutions to the problems."
The aim is to set things up so that "when you do well, the world around you does well." Social good can't be a Band Aid, Nadella concludes.
2. The Narrow Corridor by Daron Acemoglu and James A. Robinson
As Quartz points out, the authors of this book, an MIT economist and a University of Chicago political scientist, got into a debate with Bill Gates about what exactly causes some countries to have good living conditions and others to struggle (Gates stressed geography and culture, while the authors pointed to institutions). But apparently Sadella is more of a fan of Daron Acemoglu and James Robinson than of his old boss. At Davos, he called The Narrow Corridor "a fantastic book."
"It's [about] the real, constant tension between what does a society want and ... what does the government want ... and you have to find the narrow corridor," he said in response to a question about CEO pay. "Similarly I believe between markets, democracies, and liberal values, we have to find the corridor that works, where there isn't anything out of kilter."
3. Mindset by Carol Dweck
Davos was far from the first time Nadella praised this book by Stanford psychologist Carol Dweck, who is famous for her work on the growth mindset. In fact, as my Inc.com colleague Justin Bariso has reported, he's previously credited Mindset with inspiring Microsoft's turnaround. He was equally effusive at Davos.
"I would say that whatever change we've been able to achieve is because the cultural meme we picked was inspired by Carol Dweck and her work around growth mindset," he stressed. Being "vulnerable enough to say 'I'm not perfect, I'll never be perfect, but I can learn'--that's a good posture to have, to have a living culture that is constantly keeping up with our own aspirations."