Editorial: Embracing the atypicals to solve challenges of the 21st century

What the paper says

We live in atypical times. Apocalyptic scenes of Los Angeles under fire are no longer a piece of cinema; it is our reality. Businesses today operate in an era where climate change and extreme global wealth inequality are not distant but existential concerns. Unlike in the previous century, when corporations cared about the impact of their actions on their immediate stakeholders-shareholders, customers, employees and suppliers, businesses today must consider their externalities on the entire planet. Despite the giant footprints of companies today, our economic system and managerial approaches still do not put externalities (unlike profits) at the centre of their decision-making.Our existing economic system prioritising profit maximisation has led to unprecedented hockey stick growth over the last two centuries, with China, India and Southeast Asia being its latest beneficiaries. The system has produced unaccounted visible and invisible waste, leading to climate change, ecological disruption, and other cascading effects that harm the most vulnerable people and ecosystems. However, the existing responses of businesses that produce this unaccounted waste have been insufficient, as businesses’ environmental, social and governance commitments still do not form a part of their core strategy.Stakeholder capitalism, proposed in the 1980s (Freeman, 1984), was conceived as an alternative approach to the dominant shareholder primacy paradigm of the Chicago School (Friedman, 1962), where firms were pushed to consider various stakeholders in decision-making. However, the model has largely failed, and even vocal commitments shown by corporations to stakeholder centrism (e.g., the 2019 CEO business roundtable) are inconsistent with their actions (Bebchuk and Tallarita, 2022).Hart and Zingales (2017) explain why stakeholder capitalism fails to have a bite. They explain that public firms, which are part of financial markets, are exposed to amoral drift – the gradual erosion of ethical standards in pursuit of profit. Even firms with well-intentioned shareholders who initially seek to operate ethically and pursue “clean” strategies for profit are pushed towards “dirty” profit and efficiency-maximising strategies with threats from external players through actions like hostile takeover – that externalise harm. Hence, while non-market stakeholders may push firms credibly towards more “clean” strategies, they often lack comparable formal influence to deter amoral drift.The hostile takeover of Twitter (now X) in 2022 illustrates this phenomenon. Before its acquisition by Elon Musk, Twitter had implemented extensive and expensive content moderation policies, significantly expanding its workforce to combat misinformation and hate speech on its platform. Expensive content moderation costs led to a decline in Twitter’s valuation, creating an opportunity for Musk to buy the company in a hostile takeover, offering a premium. Once Musk bought the platform, he fired most of the workforce, including teams responsible for content moderation, driving “efficiency” initiatives in the company. These actions led to an increase in misinformation and hate speech on the platform, affecting vulnerable groups like LGBTQ+ people.Stakeholder capitalism does not offer an effective counterbalance to the financial constraints businesses face in pursuing “clean” strategies and the lure of short-term profits from pursuing “dirty” strategies. The mere intention of a business (Bebchuk and Tallarita, 2022) is not enough. We still need an integrated approach to strategy that can credibly move beyond conventional profit-driven models and embrace a broader set of stakeholders without being vulnerable to amoral drift. For this, organisations need a new iron cage that embeds the concern for various stakeholders, especially those who are atypical in their decision-making – in their norms and routines (Raj, 2025). With this change, businesses can move beyond unsustainable practices and embrace a more inclusive and sustainable future without waiting for one-off regulatory or public pressures to force them to change.Atypical stakeholders, those who are often economically disadvantaged, socially underrepresented and historically stigmatised groups, are not just statistics but individuals with a crucial role in decision-making. They are often the first to experience systemic risks but are rarely given a seat at the table. Consider a family in Madagascar that faces a deadly famine due to climate change, for which they are not responsible. When will they get a seat at the table in places, e.g. boardrooms of corporations, where decisions that impact greenhouse emissions get made?Atypical stakeholders are systematically ignored; not listening to them represents a fundamental managerial blind spot. When atypical stakeholders get ignored, they lead to major crises. The COVID-19 pandemic exemplifies how failing to listen to atypical stakeholders exacerbates disasters. Dr Li Wenliang, a Wuhan-based physician, attempted to warn the medical community about the novel coronavirus in December 2019. Rather than taking proactive measures, Chinese authorities silenced him, delaying critical global response efforts. Had his warnings been taken seriously, the world could have mitigated the pandemic’s early spread. Similarly, environmental activists and indigenous groups have long sounded the alarm on deforestation, biodiversity loss, and water scarcity, but their insights remain largely excluded from corporate and public decision-making.The case of DuPont and Teflon (with chemical C8) shows well how atypical voices played a crucial role in uncovering corporate malpractice. Rather than top-level management or regulators, the first warnings about Teflon came from often sidelined stakeholders – workers and the local communities (Shapiro and Zingales, 2017). As early as the 1960s, lab studies had indicated the toxicity of C8. However, DuPont executives continued using it despite becoming aware of risks by at least 1981, particularly after its supplier, 3M, linked the chemical to congenital disabilities in rat fetuses. The Tennant family, farmers who lived near a DuPont landfill in the 1990s, raised the first external alarms. They noticed deformities and deaths in their cattle, ultimately discovering that their water supply had been contaminated. Their 1999 lawsuit, led by lawyer Robert Bilott, led to a lengthy legal battle exposing DuPont’s extensive cover-up of C8’s dangers. A subsequent 2001 class-action lawsuit forced the creation of an independent scientific panel in 2004, which in 2012 linked C8 exposure to multiple diseases affecting thousands of individuals. Well into the 2010s, DuPont continued to downplay the risks until it was exposed.Despite the social and strategic value of atypical stakeholders, they are often ignored. There are a few factors that drive this:If businesses are to put atypicals at the centre, they must actively reorient their business to embed atypical voices in their decision-making. This implies going beyond occasional diversity initiatives or corporate social responsibility efforts and attempting to make atypicals a central aspect of their strategic thinking.In traditional business settings, decision-making relies heavily on historical data, forecasting and top-down planning. Such methods are increasingly obsolete in an increasingly uncertain, complex and interconnected world. In the world we live in today, novel information is at a premium and atypical stakeholders – those who are distant from us, are valuable sources of such strategically valuable novelty. Empathetic and immersive listening becomes more than just a soft skill to learn from atypical stakeholders; it is a strategic tool that allows organisations to learn better under uncertainty.Businesses that institutionalise empathy and immersive listening through design thinking frameworks can be ahead of the curve by learning from atypical voices better and sooner. The strategic design thinking process (Raj, 2025) begins with identifying diverse stakeholders and immersively listening to them to recognise their unique needs, wants, desires, issues and asks. Such an exercise helps businesses develop personas of diverse stakeholders, giving them access to various strategically valuable perspectives. Immersive listening involves understanding stakeholders through open-ended conversations and immersions rather than just brief surveys and highly structured interviews.Once insights have been gathered, businesses can map the stakeholder needs and issues on a dashboard and find patterns that give them insights into ignored challenges and opportunities and the proximate and ultimate factors that drive them. Such activities then provide insights to businesses on the short and long-term actions they must take to address them.The core inimitable capabilities of businesses that drive strategic success are often embedded in their relational contracts. When relational contracts between stakeholders are based on trust, process and product innovation occur smoothly. For example, the Toyota Production System places decision-making power in the hands of frontline workers, who can stop the production line if they find defects. Toyota’s worker-centric philosophy encourages managers to visit factory floors and engage directly with production teams, ensuring real-world insights inform strategic decisions. This bottom-up approach enables faster problem-solving, process optimisation, and continuous innovation, making Toyota one of the most iconic car manufacturers in the world.The Tata Group exemplifies grounded leadership through its long-standing commitment to stakeholder engagement. Unlike many modern corporations focusing primarily on shareholder value, Tata has cultivated deep, trust-based relationships with employees, suppliers, and local communities, making it one of India’s most respected brands and successful businesses. For example, Tata Steel’s decision to retain workers rather than lay them off during downturns has fostered employee loyalty and operational stability.Innovation is the heart of progress and business success. Without innovation-driven strategies, dirty strategies that raise entry barriers, opaqueness and stakeholder “management” become more common if managers have no positive agenda to drive their business. However, innovation is complex, requiring a culture that values idea generation and execution. Many businesses struggle to develop such an innovative culture.Innovation today involves businesses working closely with myriad stakeholders to raise an ecosystem or a village. Businesses that support entire innovation ecosystems have been remarkably successful, such as tech giants Apple, Netflix and Spotify. Consider Netflix and Spotify, which worked closely with big and small artists and content producers to create an alternate and entirely novel business model for the music and movie/television industry. This has allowed them to be agents of creative destruction in their various industries, becoming dominant players in an industry which a few big incumbents historically dominated.All products and processes generate externalities. These externalities can be positive (such as improved public health) but are often damaging (such as pollution from manufacturing). Many externalities remain invisible for long periods. For example, plastic microfibers and Teflon were not recognised as a significant pollutant until recently. Similarly, the effects of carbon emissions were not identified until the late 1980s, and carbon dioxide emission was not considered pollution as long as the emission was “clean”. Today, with more knowledge, carbon emissions are one of the biggest problems of our century. In all these cases, these harms were not apparent in sales data or consumer feedback but were flagged by atypical voices long before companies acknowledged them.Atypical voices have often been the first to detect externalities because they experience them firsthand. Factory workers exposed to toxic chemicals, Indigenous communities facing deforestation, or whistleblowers uncovering financial fraud often identify risks long before regulators or executives do. To detect externalities early, businesses must shift from salesmanship to atypical testing. Traditional product testing focuses on consumer desirability and performance, often overlooking broader societal impacts. In contrast, atypical testing (Raj, 2025) engages marginalised stakeholders to identify risks proactively. Unlike salesmanship, which seeks to persuade, atypical testing seeks critical review to mitigate harm, ensuring long-term sustainability and trust.Businesses have often played a crucial role in positively driving social progress beyond their immediate commercial interests. Frontier innovation and strengthening inclusive supply chains are two direct ways businesses can help create commons that outlast business cycles and benefit the general public.To create either of these public goods, bringing stakeholders together through a unifying vision is the key tool for businesses looking to build a sustainable legacy. COVID-19 showcased how businesses, governments, and NGOs must collaborate and bring their unique capabilities together to reach the last mile (Saranga and Raj, 2021). For example, while AstraZeneca had strong innovation capabilities, its success depended on the University of Oxford’s fundamental research in vaccines, Serum Institute’s manufacturing capabilities, and governments’ and NGOs’ distribution abilities in last-mile distribution and delivery.One of the most significant contributions businesses make to the commons is innovation at the frontier. Many scientific and technological breakthroughs, from vacuum tubes to LED technology, including several Nobel Prize-winning discoveries (e.g. the 2024 Nobel Prize in Chemistry that emerged at Google DeepMind), stem from industry-led research. Another crucial way businesses nurture the commons is by developing resilient and inclusive supply chains that reach the remotest populations. Indian FMCG companies excel in deeply penetrating supply chains, supported by a vast network of local distributors. Such supply chains also can be used to deliver health innovations. For example, making access to iodine available to the public through iodised salt has drastically reduced iodine deficiency-related diseases worldwide.The defining challenge for businesses in our times is no longer merely maximising profits. Businesses that fail to integrate atypical voices into their decision-making processes risk becoming obsolete, reacting from one crisis to another rather than pursuing proactive innovation. The future belongs instead to businesses that believe in deep engagement with a variety of stakeholders like workers on the line, communities in points of production and sale, and non-traditional innovators with novel insights. To create shared value, businesses today must put not just the typical stakeholder but also the atypicals at the centre of what they do.