The FT’s “Capitalism Reset” campaign is a wake-up call and flashing red light
Most things in life are about a delicate balance and there is a growing belief that business has lost that balance. The argument is that since the global financial crash, companies have continued to make good profits but have not re-invested sufficiently back into its structures, people and development rather than focused on greater shareholder value.
Business needs profits to be reinvested along long held principles as well rewarding shareholders. Without this reinvestment it is no real surprise that we are seeing many of the problems that we are today with talent opting out, disengagement, cynicism and a growing lack of trust in business leadership.
It is also no surprise that emerging generations leave jobs so frequently and are seeking to work for those companies that really do carry a social as well as commercial purpose. It is easy to patronise the younger generations and say that is just the way of millennials but maybe too companies do hold a responsibility?
One knows that the balance has been lost when the FT – the City’s leading voice and paper – launches a campaign in September called “The new Agenda”/ “Capitalism Reset” arguing that “in the decade since the global financial crash, the model has come under strain, particularly in focusing on maximising profit and shareholder value. These principles of good business are necessary but not sufficient. It is time for a reset.
The long-term health of free capitalism will depend on delivering profit with purpose. Companies will come to understand that this combination serves their self-interest as well as that of their customers and employees. Without change, the prescriptions risks being far more painful”
These are strong words from a newspaper such as the FT and do say much. Business is facing new challenges and change. There will be new roles created in the boardroom as companies today do face the challenges of building trust back with their own people let alone customers. The lack of trust exists for good and fair reason and patronising the emerging generations is, at best, unhelpful. It does need people at the board table that will bring new thinking and that will challenge the board in its actions.
Over the last few years, any discussion about investment in people, in culture, in social enterprises, in innovation has been almost seen as a luxury item. During austerity one make the case but the austerity piece is a bit like Brexit and gets used to cover a wide range of issues. This is as simple as being about core values and principles/pillars that a business stands for and believes in – beyond making profit. That is what employees want to see – businesses that do stand for something greater than self-interest and the irony is that this is what customers want to see. There is a reason why the FT led such a campaign which was a brave move. There is a reason why it is stated that 63% of employees do not trust in their leadership teams.
Business today does need to find its old principles and pillars once again. It does need to think differently and be prepared to reinvest in those things that will build trust back into business and in work environments. This can involve reinvesting back in people, in culture, in social enterprises but most of all it is about business leaders understanding the issues and creating the change that so many desire.
As the FT campaign indicates, this is not to be seen as a cost but a way of engaging again with both customers and employees.