There is a lot of conversation happening about what capitalism means, and how it might morph to address a changing society. Have you noticed it? I feel that there has been a growing pace and intensity to this global conversation, and I wanted to provide you with a few links to some thoughtful content on this topic, as well as distill the “big conversation” into something actionable.
The fundamental challenge for companies is to balance the tension between three vital stakeholders in the business: the customer, the employees, and the investors. This leads companies to closely manage their labor costs (employees) to pay no more than absolutely necessary so that they can win customers in a competitive market and satisfy the aspirations of investors (represented by boards and executive management). But there is an emerging school of thought around the idea of conscious capitalism. It’s not that it’s new idea (it’s not). It’s that I’m noticing a new intensity to the discussion.
I’ve long thought the best path forward is to start with the employees. The emphasis on investors above other stakeholders has led to a national short-term approach to investment that, over time, leads to a sort of corporate anorexia. Many businesses are driving 100 mph in 90 day fogs.
When we hear “invest in employees” people immediately think about pay, but there are a number of interesting ways that companies can invest in employees, such as in this cover story from The Atlantic which chronicles how Starbucks is partnering with higher education innovators to give their employees an opportunity to get the elusive degree.
There are a number of efforts to create positive focus on those companies that are doing well by doing good. One is a new list from the creators of the Fortune 500, called the Change The World list, found here. Another is this article about a billionaire hedge fund manager’s effort to address the wealth gap via an investor-led effort to reward companies who engage in an effective balance in their business activities .
I enjoyed this article about the co-CEO and co-Founder of Whole Foods, John Mackey. One of the aspects of the article I found interesting is how someone who lives his life and is passionate about issues consistent with the left has embraced capitalism as the best way to enable the poor to move up the economic ladder.
One more: here’s an interview with an associate professor from MIT Sloan about her book which details the positive correlation between employee investment and corporate profits.
So what are we to do about this customer/employee/investor tension? For me, while I sometimes fail at this, I always try to remember the quote I featured as the image for this post from Herb Kelleher (former CEO of Southwest Airlines). I think that’s a good place to start for all of us.
Good luck!