Cocreating Sustainable Value with All Stakeholders

In keeping with their competitive nature (the red zone) and fixed mind-set (the blue zone), smart leaders believe that the size of the market is fixed. They aim to grab as big a piece of pie as possible, or, in the case of leaders operating out of the blue zone, to hold on to every piece of pie they already have. This selfish attitude stems from their belief in business being a zero-sum game.

Wise leaders recognize that the world is becoming more interdependent and therefore seek to cocreate value with others. They reach out to others and invite them to collectively create a bigger pie so everyone can get a bigger slice. Outdoor clothing and apparel company Patagonia, for example, encourages its customers to consume less by offering them an exchange and recycling program that allows them to share or trade their used Patagonia products with others.²³ Through this initiative, Patagonia is catalyzing the growth of a grassroots movement called collaborative consumption—a socioeconomic system that enables the sharing and exchange, on a large scale, among consumers of all kinds of goods and services, ranging from clothes to cars to skills to spaces.²⁴

In a similar way, Facebook CEO Mark Zuckerberg regularly reminds his staff how the social networking platform that the company has built can make a difference in the world.²⁵ He actively encourages employees as well as Facebook users to be socially involved. Given the site’s vast reach, this can be extremely effective: in 2012 more than 100,000 Facebook users signed up to be organ donors, thanks to a new feature on the social networking site that made registering for organ donation easy.²⁶

Gitanjali Group is a $900 million company that pioneered the concept of affordable branded diamond-studded jewelry in India. It is a vertically integrated jewelry manufacturer and retailer with a wide range of activities ranging from diamond sourcing to manufacturing and retail. When Gitanjali Gems set up a facility for cutting and polishing diamonds and making jewelry on a 176-acre campus outside Hyderabad, a South Indian city, it faced a major human resource challenge: there were no skilled workers available in Hyderabad, unlike traditional hubs of diamond polishing like Surat, Gujarat, in western India, where diamond-polishing skills are passed down through generations. The cost of training diamond workers is high, and the work is intricate and detailed, which means a high dropout rate that adds to production costs. The question facing Gitanjali’s leaders was how to hire, train, develop, and retain productive employees and make the new unit cost-effective.

Mehul Choksi, the chairman of the Gitanjali Group, is a leader committed to developing society around the workplace and was therefore open to the concept of hiring disabled rural youth as a corporate social responsibility (CSR) initiative in 2005.²⁷ The plan was put into effect, and today more than 11 percent of Gitanjali’s twenty-five hundred employees are disabled youth. The company found that the attrition rate among this disabled employee group is much lower—and its productivity level much higher—when compared to the rest of the workforce. This convinced Gitanjali’s leaders to change the disabled youth initiative from a CSR project to a core element of the company’s talent management strategy. As the company expands, it envisions hiring up to five thousand more people in 2013 and 2014, with at least one thousand of them disabled youth.²⁸

We analyzed the factors that made hiring disabled youth a good business case for the Gitanjali Group. First, it helped the company tap into a large labor resource pool (India has a population of 20 million disabled; barely 0.1 percent of them are employed). Second, the training it offered to these young people quickly paid for itself, because disabled youth have a greater sense of loyalty, as the attrition rate suggests. Third, productivity among these disabled workers is also higher because they have more motivation to prove that their disability is not a deterrent to performance. Fourth, it leads to a more diverse workforce. It’s worth noting here that these disabled youth often earn more money than the company’s able-bodied workers because they are more productive and therefore receive performance bonuses. Enlightened self-interest is the prime motivation for Gitanjali’s leaders to hire disabled youth in an initiative that not only supports local communities but also garners a highly motivated and productive workforce for the company.