Before I write about the conference, I'm going to focus on some broader reporting, particularly some recent articles in the FT's new series on the future of capitalism.
This notes that "capitalism – our ability to buy and sell, move money around as we wish, and to turn a profit by doing so – is in deep trouble". I actually think the issue is broader than this - the change I'm most interested in is that people are becoming less interested in serving the goals of capitalism, and will therefore be less ready to invest a major proportion of lives for the luxurious lives of their bosses and the profit of anonymous shareholders.
Although as I've pointed out before, I think there is evidence both for and against this situation. But I still feel the pro change is pushing ahead.
Did you see, for example, that Jack Welch, regarded as the father of the 'shareholder value' movement that has dominated the corporate world for more than 20 years, has said that "we are in unchartered waters" and that it was “a dumb idea” for executives to focus so heavily on quarterly profits and share price gains.... "Your main constituencies are your employees, your customers and your products", he says.
And even those who have benefited most from the single minded focus on shareholder value seem to be started to push back against what everyone else has already been viewing as unfair rewards. The FT series provides the example of a banker who turns down an airline upgrade, and the BBC Analysis programme has also broadcast an excellent episode on this, the Threat of Thrift.
Writers in the FT series also note that we have sacrificed "the most important source of happiness, which is the quality of human relationships", allowing our society to become "too individualistic, with too much rivalry and not enough common purpose".
It's not that capitalism will disappear: "Like democracy, it has serious flaws – but, just as one find faults with democracy, the critics of capitalism will discover that all other systems are worse... We do not want communism – as research shows, the communist countries were the least happy in the world and also inefficient. But we do need a more humane brand of capitalism, based not only on better regulation but on better values."
But the key question is still, "If, as it has become painfully apparent, the value system and operating principles that informed the corporate psyche since at least the end of the cold war were found wanting, what should replace them?"
A model may come from the Scandinavians countries which have "managed to combine effective economies with much greater equality and mutual respect. They have the greatest levels of trust (and happiness) of any countries in the world".
And also in Asia, "executives – with the exception of some family tycoons who use their companies as piggy banks – have generally eschewed the sort of remuneration packages that have become so discredited in the west".
It's all interesting reading. But I suspect not half as interesting as what will happen next...
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Hi Jon,
ReplyDeleteA well chosen theme for the time of recession. HR in recession or rather HR during the troubled time of Capitalism, where there is an acute shortage of Market (Read market as Consumer - and consumers as "Employees with enough money in their pockets"). Globally HR should focus on how they can evenly populate the salaries (Profits) to majority of citizens, who becomes the Market. Because when market grows - economy grows - employees grows. Sounds like a Socialist!