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

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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.

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Rebooting business and capitalism

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Last year with the launch of Social Innovation Sydney I was inspired by the idea of rebooting capitalism. I had become depressed about the nature of business in our world today and wanted to do something practical about changing things.

Then I went off to Paris for LeWeb 2010 Conference and ran into Tara Hunt and our conversation got me thinking (I love meeting people who make me think!).

Upon arrival at home I read Tara’s posts about The Hole in the Soul of our Culture [Part 1 here and Part 2 here – both are recommended reading] and these resonated with the feelings that had sparked my involvement with Social Innovation Sydney.

Tara’s posts also pointed me in the direction of Umair Haque’s I’m Bored – The Significance Manifesto, which I’d missed during my travels.

I believe that we have entered an age where ‘business as usual’ is no longer viable. We need to come up with new business models that are founded on truth, openness, justice, equity, and sustainable profit. No longer can we sustain a world where profit and profit alone is the only goal of business (after all we are not Ferengi). We need businesses that change the world, that make things better for people, that do not destroy the environment for future generations.

We have flirted around the edges of change with notions like the triple-bottom-line to no avail. The existing culture of business has shown itself to be highly resistant to change. Existing business culture does not value the things that go into creating value that are not easily measured as ROI. Thus having a conversation with a customer is often not valued highly over getting the customer off the phone quickly to meet KPIs in a call centre.

I suspect that Tara is right when she identifies a key part of the problem as us:

“But it all comes back to what we value and why I think we have a hole in the soul of our culture. It isn’t merely the businesses and boardrooms where there lies an issue. It’s all around us. In North America at least. We pay lip service to wanting to change the world, to being better human beings, to ‘balancing’ our lives, but when it comes down to it, we tend to be more impressed with big numbers: 1 MILLION hits, 100,000 followers, $1 BILLION market capitalization, etc.”
[Source: The Hole in the Soul of our Culture – Part 2]

The change needs to start with an individual deciding to be different and to think differently. Deciding to shift away from instant gratification and ROI measured in mere numbers seems to be the first step. I also suspect that once an individual changes their thinking in this way that individual behavioural change will not be far behind.

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Serious stuff: "dream machines that deliver the desires of the material heart"

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I was lucky enough to hear my friend Mark Pesce speak at the Social Innovation BarCamp in Sydney on 6 Nov and his talk, while entertaining, was also profound.

Mark commenced by referring to mobile phones as “dream machines that deliver the desires of the material heart”. Then he pondered the notion of materiality and how it takes us away from the ‘real’ and towards the things. He concludes that what we own ends up owning us and that the material goods we own do not matter at all in the long run. He draws attention to Australia’s prison of stuff. He noted that sustainability starts with each of us saying no to stuff and that we need friends who’ll say “f*ck off mate, we’re full”.

These are challenging ideas. A call to reject the lure of things, of shiny pretty things, is hard to execute in this society that is so full of shiny pretty things.

Social Innovation Keynote by Mark Pesce from ApostrophePong on Vimeo.

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1 more sleep until Social Innovation BarCamp #sibsyd

Social Innovation Sydney
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After many weeks of planning with my co-conspirators Selena Griffith, Michelle Williams and Kim Chen we are finally on the eve of the second Social Innovation BarCamp.

This venture was a leap of faith for us. At the start we did not know if anyone else had a passion for social innovation and wanted to join in creating conversations around making change happen. Nor did we know if the unconference format would transition successfully out of the geek world where it originated.

But now with one successful event done and another under way it looks like our idea of creating a shared space where ‘change makers meet’ is coming together.

We’ve had great support from organisations like ASIX, COFA, Cisco and Headshift. Brasserie Bread also helped out with some of their wonderful artisan style bread for lunch. A huge thank-you to our kind supporters.

It’s not too late to register for this free event in Sydney. Also check out:

All you need to know for tomorrow’s Social Innovation Sydney!

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Help a girl and you help a family, a village and the world #becauseiamagirl

becauseiamagirl
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I’ve been a big supporter of the Plan Because I am a Girl campaign – if you haven’t shared your story do it now!

The other day @uskovic shared this video about the Girl Effect with me:

 

You Can Help Change the World

Plan International says “There’s no greater enemy of inequality than keeping quiet!”Act now! Spread the ‘Because I am a Girl’ message throughout your network of family, friends and colleagues.

Simple Things You Can Do Right Now …

  • Share your story here
  • Inform people about the campaign through your websites, newsletters, emails and other touch points. Plan can provide you logos and information on the campaign.
  • Host lunches with friends, partners and clients. Depending on the event Plan can provide content and speakers.
  • Plan can work with you to see how your business can build awareness among your customers and suppliers.
  • You can donate to Plan in Australia’s GirlsFund, that works to address the unique obstacles faced by girls.
  • You can sponsor a child with Plan. Over 48,000 individuals and businesses in Australia sponsor children with Plan.  Plan uses funds through child sponsorship to support projects that bring lasting change to a child’s entire community, such as gender equality.
  • For more ways on how you can support the campaign visit Plan Australia’s ‘Because I am a Girl’ website
  • Because I am a Girl Facebook Group
  • Twitter: @invest_in_girls
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    What matters?

    Social Innovation Sydney
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    A recent discovery for me is McKinsey & Company’s new site What Matters. It is a thought provoking question and it is good to see it being tackled by McKinsey and their interesting array of authors.

    The things that matter change if we are considering big or small things. At this time in our world there are an enormous number of big things for us to consider. And we all need to get out of our focus on the small things and start thinking about the big questions.

    Big questions like:

    • Do we need to change the way we do business for it be sustainable?
    • How can business be profitable and ethical simultaneously?
    • How can we innovate in a resource constrained world?
    • How can we balance security and freedom in an increasingly turbulent world?
    • How do we create an inclusive world that respects diversity?
    • What can we do to respect individual rights while respecting diversity?
    • What difference can individuals and small groups make?
    • How can individuals and small groups take action?

    It was questions like these that inspired me to do something and, along with Selena Griffith and Michelle Williams, kicked off Social Innovation BarCamp Sydney.  The inaugural event went well and now we are thinking about next steps. If you have any ideas or suggestions please head over here and post a comment.

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    Libraries for the future

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    I spent most of my youth and childhood hanging about in public libraries and reading their books. In fact I blame libraries for most of my quirks these days, since it was there that I was exposed to dangerous ideas from philosophers, historians and fiction authors. The local, school and state libraries provided a welcome haven away from my rowdy siblings at home and the somewhat unpleasant school bullies of my youth.

    Last week I was lucky enough to join a distinguished panel at the State Library of NSW to discuss the future of libraries. The event was the Futures Forum 2010 (PDF of media release available here).

    The panel and assembled librarians were considering the possible futures for libraries in NSW – looking at these via the The bookends scenarios : the future of the Public Library Network in NSW in 2030 (PDF copy of the scenarios available here).

    The booksellers on our panel were very worried about the impact of e-books and readers such as Kindle or iPad on their existing business of selling physical books.

    This concern is no surprise with the rapid shift of consumption towards virtual rather than physical media for both books and audio. It seems very clunky to buy a CD for music now when I can just download the music I want to my mobile phone. It’s not hard to imagine the same scenario for books once equivalent reading devices are more widely available.

    Another feature of the shift to virtual goods instead of books is the growth of recommendation engines and the ability to share our enthusiasms widely and immediately via social networks.

    Thus if I love a new book, article or song it is easy to share it was all my contacts via Facebook or Twitter with a click or two. And interested parties can acquire it almost immediately based upon my recommendation. Thus the role of the mediators (like booksellers) is being replaced by the broader community of my social connections.

    The growing hyper-connectedness facilitated by the internet and our connected devices make sharing of media a communal thing. In the same way that we pass physical books and CDs around amongst our circles we are sharing our passion and interests for virtual media.

    Libraries are either going to adapt or go the way of the dinosaur. Judging by the level of thinking, debate and discussion I saw last week, my money is on adaptation.

    Of the future scenarios considered, the one I see as most probable is that libraries become shared community spaces providing a hub for local activities and collaboration.

    Have you been to your local library lately? Why not get along and check it out?

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    Being real

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    As a child I read a story where the main character wanted to be a ‘real boy’ and not just a wooden puppet.

    And this choice between being a real person – who connects with other people and things in an open and organic way – and being a puppet – driven by fear and striving and struggle – seems to be facing us all today.

    Social media is merely speeding up the process.  It is helping the real people find each other and create sustaining communities.  And it is helping the others to find like-minded desperate souls.

    We are at a crossroad in the future of our world.  Which group have you chosen to join?

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