If capitalism is broken is social innovation a way to fix it?

Over the past several years I have come to think that capitalism as practised in the western world is fundamentally broken. Even before the global financial crisis (GFC) this feeling was strong. But in the aftermath of the GFC my discomfort with modern capitalism has continued to grow. Nothing I have seen, read or heard has shifted my perception.

I know and understand the world of capitalism. I like capitalism and think that it has been good for us in many ways. I respect profit and the law of compound interest. Most of my work experience since leaving school has been with large corporations (mostly large enterprises, Fortune 500 or S&P/ASX 200) – what I jokingly refer to as ‘the belly of the beast’.

But business models that were effective for organisations in past centuries are no longer relevant to the conditions that face the world today. We must find business models that are sustainable, equitable and fair to replace them.

A few things to consider:

  • Western business has been like a cargo cult for too long and has elevated shareholder return as an idol.
  • What good to shareholders (a.k.a. human beings) if the profit that is returned to them comes at the price of the environment their children and grandchildren must inherit?
  • What good to the shareholders if the people who work in the business to generate those returns are broken by corporate politics and are called upon to undertake immoral or illegal acts (for example #hackergate)?
  • What good if those returns to shareholders are generated at the cost of social bonds and the common good?

For many years I’ve pondered: surely it must be possible to generate profit sustainably and to create social good while generating profit?

Over the years I’ve also noticed a growing number of people thinking along similar lines. These people have talked about, among other things, the idea social innovation.  They have also discussed concepts such as sustainable or resilient communities (checkout the MiiU wiki); and concepts like open source innovation are becoming increasingly important.

Even if the US manages to sort out its internal issues with the debt ceiling, there remain serious economic issues in Europe and North America.

We need to take collective action to create profit and abundance that is sustainable on a social, economic and environmental basis.

For too long we have let run rampant a corporate ideology that exalts profit as a deity and we have allowed worship at the altar of shareholder returns to dominate our thinking and ways of doing in business around the world.

It’s time to create better ways for organisations to be more sustainable, more humane, and more planet friendly.

UPDATE 7 AUG 2011

An interesting article just popped up on The Guardian from the UK: Our financial system has become a madhouse. We need radical change. Here Will Hutton argues that “As a new global crisis looms, and political paralysis worsens, genuinely bold solutions are required to overcome the malaise”. I recommend this article.

Generational theory cannot explain how people behave

Quite often there’s an article that bundles us all up into handy age-based cohorts (a.k.a. ‘generations’). Behavioural phenomena are neatly explained by the characteristics of the particular age cohort or generation. Based on the theories of Strauss and Howe generations have been adopted as a popular explanatory model for people’s behaviour, and demographers like Bernard Salt and Mark McCrindle have done very well in explaining this model to business and marketing folk.

While large scale external factors can impact on a particular generation and influence them in a particular ways, individuals of that generation shape their lives by other means too. A generation that suffers a war, like the First or Second World War, or a Great Depression like during the 1930s, is shaped in important ways by that shared experience.

Yet I am not convinced that the individuals within each generation are like a mob of sheep who respond as a mob to stimuli.

DiffusionOfInnovation-300x1851 Instead, based on my experiences in implementing technology and process change in the workplace, I am more influenced by the technology adoption lifecycle (as popularised by Rogers).

I think that this model can be generalised to explain other parts of human behaviour in addition to technology adoption.

Clearly significant life experiences influence an individual’s responses to events throughout their life. And shared experience, such as wars and major disasters, can influence how cohorts behave in future. But we respond to stimuli as individuals who live within societal, kinship and friendship structures that influence our behaviour. And that behaviour is also enacted within our internal physical, psychological and spiritual context. Thus our age cohort compatriots may be part of the mix, but they are not the entire story.

Which leads to one of my pet peeves about generational theory. Articles like this, (from 2007) A-Z of Generation Y:

“THEY’RE hip, smart-talking, brash and sometimes seem to suffer from an overdose of self esteem.”

It is this kind of glib summary that irritates. It fails completely to reflect the diversity, magnificence and sheer idiocy encompassed by humanity.

We see the best and the worst of humanity every day. And just when you feel like giving up hope for us as a race someone somewhere does something amazing, moving and awe-inspiring.

For example, I do a lot of work with those Gen-Y kids who are so often the target of this shallow analysis in the media, and every day their enthusiasm and passion to make the world a better place inspires me.

I also work with a number of Baby Boomers (the so-called “Baby boomers: powerful and selfish“) who work every day to improve their corner of the world and the global community.

Perhaps it’s time we stop making assumptions about what people are like and judging them by stereotypes? I suspect people are more complex than the simple stereotypes so beloved of tabloid journals.

Here’s a few inspiring examples mentioned on Twitter today in response to one of my questions about inspirational things people had heard about recently:

@casandjonesy trek 2 southpole 2400km on foot” via @ljLoch

Well, @Nyx2701 did some pro bono legal work to (ultimately) help let the family of a missing person know they’re still alive.” via @mjberryman

My good friend having a bone-marrow transplant.” via @zbender

I read in the Enquirer that a blind couple adopted two blind children previously thought unadoptable. It’s an amazing story.” via @AskMonte

what planet are you on? How about @CadelOfficial Cadel Evans 1st aussie to win TourdeFrance?? #tdf #yellforcadel” via @lisafeg

Why do bad leaders happen to good people? #notw #hackergate

There have been astonishing revelations in London about leaders in the News International group of companies and in the UK Parliament. Perhaps even more shocking is the disclosure of the deep and complex relationships between the two groups?

It is a classic case study of power and the old-fashioned dispensation of favour. News International controlled the media, and thus they controlled politician’s access to the power of the media. It was good old fashioned Machiavellian politics of fear and favour.

For years, without the general public realizing it, the leaders of the nation were kow-towing to the powerful masters of the mass media. Democracy as we believed it to be did not exist. Instead electoral success rode on the back of favorable mass media coverage.

It now seems that even the (once respected) leaders of the Metropolitan Police and Scotland Yard were not immune to seduction by power and money from corrupt media players.

Now all this is being laid bare, with systemic criminal, unethical, and idiotic behaviour revealed. The people are seeing the tawdry mess in the light of day. None of the leaders in question come out of this well. Their venality, their cupidity, and their stupidity are on public display.

But the real question is were good people betrayed by bad leaders in business, government and the police? Is society to blame? Do we get the leaders we deserve?

These are important questions for us here in Australia – after all we are an outpost for News International as well. It’s time we started looking into the murkiness of relationships between those players here too. And it’s time we ask ourselves what kind of government and business institutions we want. It’s time to think about how our democracy works. And to consider how mass media can make a mockery of universal suffrage by manipulating messages.

Andrew Crook on Crikey has done an interesting analysis of the Daily Telegraph’s coverage of the current government’s carbon tax versus the Howard goverment’s GST.

Julie Posetti raises some interesting questions for local media organisations to address in her recent post Some #Hackgate Questions for News Ltd and Other Media.

Another recent development in Australia times is industry lobby groups – such as mining companies and cigarette companies – harnessing the power of mass media to promote their own agendas. And through their campaigns they seek to stop governments enacting policies such as the mining tax or plain packaging for cigarettes. Thus the lobbying that once happened behind closed doors has moved out into the public realm.

The media landscape is shifting. The democratization of access to mass media means that others who seek to drive political agendas now have access to the means of production. Power relationships around media are also shifting. As a result these are dangerous times for democracy and for the implementation of long term public policies.

It’s time to stop sleepwalking and blindly accepting the ideas that the proprietors of the mass media want us to swallow. It’s time to ask questions like:

  • What kind of leaders do we deserve?
  • What kind of leaders do we create through our actions and demands as a society?

Also worth a read in this context is an article by Massimo Pigliucci on Al-Jazeera titled Ignorance today: Our world is awash in information – but can we make sense of it?

Staying human

I’ve had a very lucky life in many ways. But along with that I’ve lost a lot of people in my immediate family over the years – parents, aunts, cousins, grandparents – to untimely death. No great traumas. Traditional family illnesses mainly rather than accidents.

The thing I’ve learned through all of this is that we need to honour those we love and those who loved us by experiencing the pain and sadness.

We live in a time where one need not even suffer the full effects of the common cold. Take a few simple tablets and we can omit many of the nasty symptoms. The same goes for our emotions.

Instead of enduring, of going through the feelings of denial, anger, sadness and pain we can simply pop a pill or two. We can avoid the pain. We can reject the feelings that are natural and human.

But I think that by doing that we reject the love we knew before the loss. By accepting the pain we acknowledge the loss of the one we love. We acknowledge the fundamental nature of being human. We acknowledge that we are each here for a relatively short time. We acknowledge that our loved one existed and that their loss means something.

I take no shame in shedding a tear for those I love who are gone from me. I remember why they were special to me and I to them.

I celebrate their time here and the love we shared. That is all that matters in the end. It is part of staying human.

Bad management, ethics and philosophy: what can we learn from News of the World?

The demise of a 168 year old (and reportedly profitable) newspaper in Britain called the News of the World (NoTW) gives us some valuable insights on a number of levels.

Every day over the past few weeks we have been gobsmacked by the revelations about NoTW and assume nothing could be more shocking.

But then there’s a new revelation about the way NoTW practised its business and we’re even more shocked.

An important insight they offer us is how management practice in the real world is informed by management thinking about business and ethics. And how thinking about business and ethics translates into behaviour in the workplace.

Bruce Guthrie, writing in the Sydney Morning Herald, recounts that in 1988 at a conference of News Corporation editors in Aspen, Colorado:

“I asked about ethics and Rupert called me a wanker”.

This article is interesting because it gives us a view into the behaviour that the top leader in that organisation demonstrated to his senior leaders and managers.

As Guthrie notes:

“I left that conference in Colorado more than 20 years ago concerned that Murdoch saw ethics or, at least, the discussion of them, as an inconvenience that got in the way of the newspaper business.”

When the top leader of an organisation gives that kind of strong message then it is extremely unlikely that any other leaders or managers will explore issues like ethics or managerial accountability. It is also unlikely that exploring those kinds of issues is part of the reward and remuneration structure within the organisation.

Further, it is also unlikely that the business leaders, given that kind of strong message from the top, will ever take the time to consider philosophical issues about management, leadership and the kind of business they want to run for customers, employees or society.

With that kind of leadership message we get a soulless automaton of an organisation that does whatever it takes to deliver shareholder value, no matter what cost to the people involved in the process.

And now, with News of the World, we see the results of that kind of leadership and management.

Where does the buck stop with the kinds of bad behaviour we saw in News of the World? Where did the people at the front line get the message that their appalling practices were okay? What kind of management philosophy was in place there?

news-corp-governance-300x126Perhaps just a quick check of the News Corporation corporate governance page demonstrates their current thinking on corporate governance?

It seems that there are interesting questions for all leaders and managers to ask ourselves arising from this tragic tale of a corporation gone wild.

Most importantly we must ask ourselves “would I have gone along with business practices like those in evidence at News of the World?” – it is easy to say no from the comfort of an armchair and with full hindsight.  More pertinent to consider is the challenge of saying no during the cut-and-thrust of a busy day in the office when your job is on the line?

Why LOLcats are important

Many people have pondered my fascination with lolcats. The answer is simple: humour using animals as a proxy allows us to delve deeply into the human condition, to reveal our foibles  and frailties.

funny-pictures-meme-cats-business-cat-climbA good example is the recent post I shared from icanhascheezburger. It highlights the dangers of success for human beings.

We strive and strive to achieve power and status and then often discover that this achievement does not fulfil as we had hoped or planned.

There often remains unnamed, inchoate desire that is unsatisfied by achievement of long held goals.

Or, we achieve the goal and then discover that we’re on a treadmill from which it can be hard to alight. The achievement of success can be a trap, one where satisfaction remains elusive, and yet one cannot seem to stop.

As a person who has achieved a variety of ‘successes’ during my life this lolcat reminded me that success is not always what one imagines.

The lolcat is a charming, cute mechanism for transmitting humourous and important ideas about humanity. They also make me LOL.