Cooperative Advantage: Rethinking the Company’s Purpose

As companies reopen and recalibrate during these turbulent times, it’s worth asking whether they should resume business as usual or whether their true purpose should instead be reconceptualized. Indeed, capitalism itself is being challenged due to inequities in employment, health care, and education that the pandemic has only emphasized as the model’s limitations have been exposed. COVID-19 has ravaged the well-being of employees and communities and brought renewed attention to the racial injustice experienced by African Americans, much of which is structural and systemic.1 Loyal employees who have been committed to their employers for many years are being unceremoniously let go. The leisure and hospitality sector, for example, has experienced massive layoffs at an unprecedented pace.2

Management theory is mostly based on the writings of early 20th-century scholars whose research orientations were heavily grounded in economics and classical sociology.3 These works portray human beings as an individualistic, utility-maximizing, transaction-oriented species.4 In contrast, a recent op-ed by Al Gore and David Blood argued passionately for a more sustainable form of capitalism, asserting that CEOs must put the welfare of their employees first — as was practiced in the Black business community in the early 20th century.5

During a period from 1900 to 1930 called “the golden age of Black business,” African American businesses experienced tremendous goodwill, support, and financial performance based on their pursuit of a cooperative advantage.6 We define cooperative advantage as the benefits that an organization possesses and accrues due to its people-centered approach to engendering a spirit of care and community, meaningful dialogue, and consensus building, for the benefit of employees, customers, and community.7

Why Pursue a Cooperative Advantage?

We propose that a business should strive not only to be profitable but also to ensure the well-being of all its stakeholders and of members of its extended professional “family.” Pursuing a more compassionate and communitarian form of the often maligned economic system known as capitalism would stimulate increased favor and backing from stakeholders and community members and help organizations gain a cooperative advantage.

The argument can be made that humans are generally social and communal beings, and that the successful Black businesses of yesteryear and early-20th-century Black business pioneers, including Charles Clinton Spaulding and Maggie Lena Walker, won the support of their employees, customers, and community because of the ethic of care that they exhibited to all stakeholders.8

Today, all businesses can benefit from learning how to obtain a cooperative advantage, an approach rooted in African traditions of cooperation and focused on the overall well-being of individuals and communities. One such philosophy is ubuntu, a word whose meaning translates to “I am because we are.” According to author Abdul Karim Bangura, the three main tenets of ubuntu are spirituality, dialogue, and consensus building. This ideology reflects an understanding of not just strength in numbers, but strength, survival, and success due to unified numbers.9

It is important for managers today to focus on these same tenets to obtain a cooperative advantage and to uplift their employees, customers, and community in an authentic and meaningful way, just as Black businesses did in the early 20th century. Contemporary organizational leaders should practice a similar ethic of care as they show attentiveness, accept responsibility, demonstrate competence, and display responsiveness to the needs of those with whom they interact professionally.10 We believe that such a people-oriented approach would be met with greater support and commitment from employees, customers, and the community at large. That would in turn render the organization better equipped to increase performance and serve its stakeholders, which enables the positive cycle to continue.

What Can Leaders Do to Gain a Cooperative Advantage?

To gain a cooperative advantage, organizational leaders must first be authentic in their cooperative approach. Their behaviors should not be construed as putting on a disingenuous show to reap the perceived benefits; such performative allyship may backfire. Recently, some companies have been accused of engaging in such performances, publicly supporting the Black Lives Matter movement because they fear backlash in the form of lost customers, sales, and profits but not necessarily because they genuinely care about Black lives. A number of companies in corporate America now claim to support the movement and have promised to combat systemic racism, but further examination reveals track records of inertia that raise skepticism about their commitment to real change.11

We also advocate that leaders learn to value and employ the three core tenets of ubuntu: spirituality, dialogue, and consensus building.

Spirituality: Spirituality is a core element of ubuntu, but practiced in a business context, it need not include religion or religious views. “Workplace spirituality” addresses the kinds of values that embrace people’s well-being, such as meaningful work, a sense of community, and caring.12

For employees, spirituality includes meaningful work that allows them to feel pride in being able to make a difference. It also includes consideration of the needs and preferences of all employees, as well as the nurturing of a sense of community at work that is built on inclusion, trust, and teamwork. Careful attention to job design and redesign, as well as flexible schedules and work arrangements, can ensure that employees are empowered to use their knowledge and skills for the good of the organization. Developmental opportunities, including job rotation and job enrichment, can be useful, and recognition and rewards go a long way toward increasing job satisfaction, motivation, commitment, and performance. In addition, employee wellness programs are quite valuable, especially when customized to the company’s workforce.

For customers and the community at large, spirituality is revealed via leaders’ commitment to addressing their needs. These needs may include (but may not be limited to) quality goods and services, fair pricing, equal employment opportunities, and philanthropy.

Dialogue: Open communication is essential for cooperation. People need to feel that they have a voice within the organization, and that their voices are heard — otherwise, it will be difficult to get their support. Discussion promotes participation. If there is no discourse, the signal sent is that stakeholders’ input is not valued, so cooperation may be slow and reluctant.

Effective leaders initiate practices that instill a conversational sensibility throughout the organization.13 Leaders should facilitate conversations with employees at all levels of the organizational hierarchy, and via a variety of media, so that everyone feels included and connections can be made and regularly maintained. Leaders who demonstrate that they genuinely appreciate honest input can secure informational gems to help in their decision-making and inspire support from stakeholders who then feel involved in the decision-making process.

Conversations with customers and community members should also be prioritized to gather their perspectives. These “conversations” do not have to be in person to prove valuable for idea generation and sharing; quality feedback is readily gained through social media, video and phone conversations, online chat, and other applications that aid participation.

Consensus building: Dialogue is a foundation for consensus building in which stakeholders address a common concern.14 When there is dialogue, people can learn from one another, understand different viewpoints, and find a way to reach an agreement. Agreement helps to unify people and promote cooperation.

Consensus building has the potential to incorporate many interests, to break logjams, and to find solutions offering mutual gain.15 Leaders must actually listen to employees, customers, and the community — and stakeholders must listen to one another. It’s essential that people feel confident that their voices will be heard — otherwise, they may feel ignored and may be more likely to ignore others’ voices, too, which hinders consensus.

Yes, engage your team in dialogue, but also pay close attention and heed what is being conveyed. Share important information so all involved can have a full picture of what is at stake. Because people will have differences of opinion and compromises may be necessary, be prepared to negotiate and resolve conflicts to achieve the required consensus for cooperation and win-win solutions.

In conclusion, businesses need to do better. They and their leaders should actively embody spirituality, engage in dialogue, and pursue consensus building. We expect these practices to result in significant benefits, including renewed employee, customer, and community support and increased organizational performance. These aforementioned tenets of ubuntu are not mere tactics to achieve the end that is cooperative advantage. Rather, when these principles are ingrained in an organization’s culture and purpose because its leaders and community members truly embrace them, they can help ensure the well-being of all of an organization’s stakeholders.