Business Book Review by Constance Devereaux
Shaking his fingers, face in a frown, a former professor always cautioned us to avoid the “sloppy thinking” evident in our “sloppy speaking.” He believed most people, students especially, were guilty of vague and ambiguous expressions in everyday speech, with negative consequences for thinking and decision-making. Over the past couple of years, I’ve wondered if a good finger wagging, and a really stern frown, could have steered us from the sort of sloppy thinking that brought about the present global economic meltdown.
The New Capitalist Manifesto: Building a Disruptively Better Business by Umair Haque doesn’t jiggle any digits in our direction, but it does suggest a few overdue shake-ups to jolt us into new ways of thinking and talking about business, economic growth, and capitalism. He offers a list of beliefs that “most deserve to be challenged.” For example, we used to believe the prime directive of efficiency was making money rather than “to enhance human well-being in economically efficient ways.” Back in the day, short-term earnings performance seemed best for judging – and compensating – executives, instead of assessing “long-term value creation.” And, remember customers? We used to think they were just people who paid their money and took their chances – on whatever they were buying. Instead, they are “all those who are influenced” by corporate actions.
I happen to agree. But then, who doesn’t these days? Glance through the current edition of Harvard Business Review and you’ll find plenty of people who figured out, a long time ago, that old-style capitalism – the sub-prime loan, out-of-control hedge fund, and just plain greed – was a rather bad idea. HBR quotes Joseph Stiglitz, no less, winner of the 2001 Nobel Prize in economics as saying, “The economic crisis has resulted, or should have resulted, in a crisis in economics – in the prevailing ideas about how economies function…. For decades I have been engaged in a critique of the standard paradigm – The results have been devastating for much of the conventional wisdom.”
Gee, Joe. You coulda let us know.
Haque is no anti-capitalist. It’s just that the old model (your father’s and grandfather’s) doesn’t work anymore. His goal “is to help you become a bellwether of 21st century capitalism.” The old style “is founded on the equation of creative destruction.” We undercounted the destructive outcomes of value creation. At the same time, we overcounted the creative value that was actually created. Too MUCH bang (or economic destruction) for the buck, in other words.
In a globablized world, the impacts are far-reaching. So, we must minimize global bads and maximize global goods or risk societal “deep debt” – which of course we already have. So far, so good. Lesson One is to become a “constructive capitalist,” by turning linear value chains (from old capitalism) into circular value cycles. Haque identifies several 21st century “revolutionaries” who are already making it happen: Wal-Mart, Nike (hey, didn’t they used to be the bad guys?), Lego.
Other strategies include “upping the speed, accuracy, and agility of a value cycle,” by engaging in value conversations instead of value propositions. What if there was a machine, Haque wonders, that would let us make any product in the world – clothing, for example – in the blink of an eye? That would make us “maximally, operationally agile.” Forget Gap. Consider instead Shishi Clothing City, “the largest garment market in China’s Fujian Province. And that’s just the tip of an iceberg: Hangxiu Clothing City, China Clothing City, and Huanan Market City… Any garment, any time? These innovative “insurgents,” as Haque calls them, have upped the ante on doing things a new way.
Don’t get me wrong. I’m no fan of capitalist greed either. In the face of what’s happened over the last couple of years, I’d say doing things differently is a great idea. But, I’m no sloppy thinker (those wagging fingers did the trick). Asking me to work harder and faster – under the guise of speeding up the agility of my value cycle – is hardly a new capitalist platform. Unless corporations, customers, and people in general make some real changes – in their thinking and actions – just calling us “revolutionaries” and “insurgents” won’t do the trick either. FBN
