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What does it take to rethink capitalism? Ten steps.
Initially recognize the scale and depth of the crisis facing capitalism: “Rising income and wealth inequality, decline of the middle class, threats to jobs from globalization and digitalisation, declining trust in institutions, discrimination against minorities, global poverty, pollution.”
The second is to understand that Capitalism itself is embedded in a broader crisisthe ongoing war in Europe, the raging Covid pandemic, rising inflation and slowing economies, extreme politicization in the struggle between democracies and dictatorships, the uncertain twists and turns of global politics, Includes major climate change risks.
The third is to recognize it. capitalism should not be abolishedDespite its many flaws, capitalism has brought enormous material benefits to mankind for centuries. I have no reason to believe. Instead, efforts should be focused on understanding capitalism’s current deviations and taking steps to adapt it to a rapidly changing world.
Fourth is to see it The world is also experiencing the woes of the birth of a new economic age: the digital age.As the age of industrialization steadily becomes less central, we are entering an era that will upend workplaces and corporations and destabilize parts of our economic and political systems. , to create a new battlefield on which today’s power struggles unfold. But the benefits of the new age are extraordinarily attractive. As customers and users, we are empowered when we are offered possibilities to make our lives cheaper, easier, more convenient, faster, more comfortable, and more appropriate to our needs. You have made your choice. There is no going back. We are already in a new era, but we are still finding our way.
Fifth, recognize it. Customer capitalism is best suited for the digital age, prioritizes creating value for customers while creating value for all stakeholders. This is not surprising, as customer capitalism began in response to the problem of managing software with bureaucracy. As companies adopt new, more agile ways to create value for their customers, they can change direction more agilely, create better workplaces, and acquire and utilize better talent more effectively. , gain customers faster, attract more money, and be able to do your part in meetings. Achieve social and environmental goals more easily and create longer-term shareholder value.
The goal of giving customers an edge is gaining momentum among major companies. For example, according to the review, 18 of the top 30 companies in the Dow Jones Industrial Index have already committed to customer centricity in their mission statements.
Sixth is to see it Businesses need to address not just the “what” of corporate behavior, but the “why” and “how”. of changeCustomer capitalism is about humans creating value for other humans. Different companies take different forms of the same core idea. Includes “zero distance to customers”. and the “experience economy”. But getting the “why” right is not enough. Businesses also need to do the ‘how’. To build a people-centric organization, companies need people-centric processes. You need a system that keeps your organization focused on systematically achieving outcomes that are relevant to people, rather than just producing outputs.
Seventh is to recognize it. Avoid maximizing short-term shareholder value as soon as possible. This form of capitalism maximizes profits for shareholders and management at the expense of all other stakeholders and society. It destroys long-term shareholder value, instills short-termism, astronomical executive pay, stagnant median earnings, rising inequality, increasing financialization, periodic financial crises, declining corporate lifespans, and All in all, it leads to a growing sense of mistrust in the business. In the long run, this capitalist deviation is doomed. However, its removal is neither easy nor quick.
Eighth, Companies must not get lost in stakeholder capitalism— the most widely cited form of capitalism today. Since 2019, this goal has been promoted by both companies and their critics, but with different implications. It is primarily used as a facade to allow companies to maintain the status quo and pursue shareholder capitalism.
Ironically, becoming a capitalist reformer also defends stakeholder capitalism. They often do not realize that they are inconsistent as a good guide.
Ninth, Government must play a more active role in some areasThe anomalous forms of capitalism of the last half century are like a virus that ravages the economy. This is perhaps the last desperate move by industrial companies to sustain themselves before succumbing to the demands of the digital age. Our current understanding of the different stages of the capitalist life cycle shows how governments can eliminate the different ways in which the public sector indirectly supports shareholder capitalism.
finally, Businesses must prepare for a long and difficult road From industrial age capitalism to customer capitalism. With digital winners benefiting customers and users and the stock market making huge profits for those digital winners, most executives recognize the need for change.
leaders themselves must change
More and more, the drive for change comes from the top as they realize that organizations need to build their own game to keep up with a rapidly changing market. In fact, the question shifts from “Why should we change?” to: “Why can’t we have what they have?”
Top managers need to be successful Fundamentally different management methods: some are beginning to understand they must change too. There are fruitful discussions going on within many large organizations. There are often advocates for significant change. For some, the shift is non-negotiable. When a company doesn’t support change, the best people go elsewhere.
There is a growing realization that new ways of running an organization are more than just tools. It is about communicating a meaning that reveals our deepest values as human beings, our core.
Discussions within companies tend to progress slowly, as they are large-scale rethinking of traditional management principles. The changes cut deep. However, anecdotal evidence shows that successful leaders find that it gives them the opportunity to live and lead with satisfaction and even joy in their work. They think and feel differently about their organizations and their lives.
So new ways of getting things done are innovative ideas. As with all transformative ideas, create a way to evaluate other ideas. It provides a way out of many of the practical, financial, economic, social, political and ethical dilemmas of our time. Establish Rather than offering jigsaw puzzles of small fixes, it offers broad theories about how organizations and societies can work for the better.
Also read:
Why agile needs to take over management itself
Rethinking the very concept of management
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