Too often companies struggle to do the right thing because 1) they don’t know what right looks like, and 2) peer companies aren’t acting either, so there’s no competitive pressure to change.
Quorum mover advantage is a social impact strategy that addresses these issues. It’s a new change theory I’m currently developing that could potentially unlock social change in many sectors and contexts.
This post introduces quorum movements and their competitive advantage, elucidates their similarities and differences to first mover advantage, and offers an example of a quorum movement in action.
Defining quorum movement
Quorum movement occurs when an external advocate rallies a quorum of competitors to take a specific social action in unison. Quorum mover advantage refers to the competitive advantage quorum members enjoy by pioneering said social action along with others.
All quorum movements involve the following:
- External advocate — The advocate determines the specific social action to be requested, coaches industry competitors on how to take the action, and convinces a quorum of competitors to act in advance of a deadline.
- Specific social action — The social action requested by the advocate must be specific and trackable. For example, “institute more diverse hiring practices” is unspecific and hard to track. “Publish percentage gender breakdown of candidates interviewed on a public website” is specific, trackable, and in service of more diverse hiring.
- Deadline — A deadline by which the social action must be taken is essential for accountability and for instilling a sense of urgency. Without a deadline, competitors will hesitate and may never act at all.
- Quorum — The firms that agree to take the specific social action by the deadline together compose the quorum. Firms that are part of the quorum tend to gain an advantage over laggards who do not commit.
- Laggards — Refers to the firms that refuse to take the specific social action by the deadline. The quorum’s move leaves these firms disadvantaged compared to peers. Some laggards become fast followers by taking action after the deadline; with enough fast follows, the social action becomes table stakes.
Firms that choose to join the quorum see advantages like favorable press coverage and higher regard for their brand; the quorum’s advantage is typically not one of profit, but of reputation and credibility. Firms that refuse to participate in social action and thus reject the quorum miss a chance to be applauded and risk criticism for not acting.
Relation to first mover advantage
Quorum mover advantage inherits from first mover advantage, the idea that being first to market with a product or service brings competitive advantage. First mover advantage is largely taken as dogma in business, though some have their doubts, and it frequently breaks for social impact moves. What’s best for society typically doesn’t improve profits easily — if it did, it would already be the status quo.
First movers and quorum movers are similar in that they both enjoy an improved competitive position as a result of taking action first. First movers beat all other competitors to a new offering. They carry all upside and downside risk. Quorum movers beat all competitors outside the quorum to social action. By being part of a collective that is together moving first, quorum members distribute both upside and downside risk among their peer movers.
Case Study: #MovingForward in Venture Capital
Quorum movements have been central to our strategy at #MovingForward, a non-profit I co-founded in 2018 with Andy Coravos, Cheryl Sew Hoy, and Tracy Chou. In the wake of #MeToo, we saw a specific problem in our industry: VC firms were not beholden to harassment and discrimination protections in employment law because entrepreneurs are not employees of their firms. This had led to a fundraising environment in which sexual harassment and discrimination were rampant but rarely addressed, and in which there was little accountability when the behaviors occurred.
Entrepreneurs deserved to know which VC firms had harassment and discrimination policies that would protect them, as well as how to report. With this in mind, #MovingForward devised a specific social action: VC firms opted to write and publish external harassment and discrimination policies and reporting contacts on our website, VentureMovingForward.org. Acting as the external advocate, we reached out to dozens of VCs and asked them to take this specific action. Thirty-seven agreed to join the quorum and take action before International Women’s Day (March 8, 2018). When the day arrived, the quorum moved. Firms that moved saw favorable press in CNN, Re/Code, Pando Daily, and other publications and gained in reputation in the entrepreneur community.
In our case, quorum movement induced many more firms to follow suit. The movement has grown from 37 firms to over 175, and from just the U.S. to 24 countries worldwide thanks to the many VCs who saw the quorum movers’ example and emulated their work. Over time, public policies and reporting contacts have become a new industry standard in venture capital.
#MovingForward is just one example; if you know of other quorum movements that I should consider as part of this ongoing research, let me know in the comments.