Intelligent Design of Inclusive Growth Strategies

22 Pages Posted: 1 Nov 2019

See all articles by Robert S. Kaplan

Robert S. Kaplan

Harvard Business School

George Serafeim

Harvard University - Harvard Business School

Eduardo Tugendhat

The Palladium Group

Date Written: October 30, 2019


Improving corporate engagement with society, as advocated in the Business Roundtable’s 2019 statement, should not be viewed as a zero-sum proposition where attention to new stakeholders detracts from delivering shareholder value. Corporate programs for sustainable and ethical sourcing practices, however, have fallen far short of solving the underlying causes of extreme poverty, extensive use of child labor, and threats to the environment and human health. We identify several causes to explain this disappointing shortfall in societal performance, including traditional company policies and incentives that inhibit the implementation of innovative, inclusive growth strategies. We propose the role for a new actor, a catalyst, to help companies forge new relationships with external funders, local intermediary companies, NGOs, and community leaders. The catalyst aligns the multiple stakeholders from multiple sectors into enduring, mutually- beneficial relationships that produce more value than that currently produced when stakeholders connect only by transactional relationships. The catalyst attracts funding from public and private sources to invest in the new ecosystem, which can generate attractive financial returns while alleviating poverty and environmental degradation. Finally, the catalyst engages the multiple participants to collectively co-create explicit strategies and scorecards of metrics, which serve to motivate, create accountability, and enable an enduring governance model for a multi-stakeholder ecosystem.

Keywords: inclusion, sustainability, strategy, performance measures, governance

JEL Classification: M4, I3, M14

Suggested Citation

Kaplan, Robert S. and Serafeim, George and Tugendhat, Eduardo, Intelligent Design of Inclusive Growth Strategies (October 30, 2019). Harvard Business School Accounting & Management Unit Working Paper No. 20-050. Available at SSRN:

Robert S. Kaplan (Contact Author)

Harvard Business School ( email )

Soldiers Field
Accounting & Control
Boston, MA 02163
United States
617-495-6150 (Phone)
617-496-7363 (Fax)

George Serafeim

Harvard University - Harvard Business School ( email )

381 Morgan Hall
Boston, MA 02163
United States


Eduardo Tugendhat

The Palladium Group ( email )

United States

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