In the book: The New Capitalist Manifesto: Building a Disruptively Better Business Umair Haque delivers a harsh critique of the moral, social and economic bankruptcy of 20th century capitalism. But Umair Haque goes further and delivers a bold vision, interesting framework and concrete examples of companies already practicing 21st century ‘constructive capitalism’.
Purpose First. Then Profit
With a combined focus on meaning, happiness, sustainability and radical innovation Umair Hague inspires us to recalibrate the hopelessly unbalanced ‘balanced scorecards’ of most big corporations today. He offers us a brilliant metaphor for our situation:
“Prosperity on an ark differs radically from prosperity in a game reserve. In our metaphor of yesterday’s capitalism as a game reserve, economic institutions were built to organize daily hunting most efficiently. They matched the swiftest, most powerful hunters to the biggest game to generate prosperity. But if the rules of hunting are to manage an ark, the result will repeated crisis and eventual collapse. In a big, empty, stable world, hunters can borrow benefits and shift costs with abandon, accumulating deep debt. Throw your bones away here. It doesn’t matter… But in a tiny crowded fragile ark, everything counts. There’s no one left to borrow benefits from or shift costs to: the destines are all inextricably interdependent… Here then is the predicament the global economy is in today. We’re using rules built for hunting to manage an ark…”
The New Capitalist Manifesto essentially delivers a rethinking of most of the strategic thinking taught at leading Business Schools around the world – including Harvard Business School.
The Constructive Capitalist of the 21st century
Fine with the idealism. What’s the case for Constructive Capitalism? Why should you be a Constructive Capitalist? The simplest reason is: because Constructive Capitalists don’t just outperform—they redraw the boundaries of disruptive outperformance. This chart shows the performance of Constructive Capitalists vis a vis market indices (the Nasdaq, S&P 500, and Dow Jones) over the last decade.
Source: The New Capitalist Manifesto
Below some of the companies that according to Umair Hague has one or more of the component of a 21st century constructive capitalist. He cites Google as an example of a value-driven business with a celebrated commitment to do no evil, its preoccupation with speed and its commitment to open data. He cites companies like Threadless, LEGO and Starbucks for commitment to co-creation. And he cites companies like Apple, TATA and Nintendo for their radical innovation and ability to redefine the music-, mobile phone-, game- and car- market.
The Constructive Capitalist of the 21st century: Google, Apple, Lego, Nintendo etc
Here are the Construtive Capitalists and their counterparts.
- Google vs. Yahoo
(By philosophy, values and dedication to Open Data)
- Nintendo vs. Sega
(Redefining the consol gaming market)
- Threadless vs. The Gap
(Winning by user engagement through co-creation)
- LEGO vs. Mattel
(Wining by stronger values, philosophy and co-creations)
- Nike vs. Adidas
(Winning by customer communities + sustainability)
- Starbucks vs. McDonalds
(Winning through Open Innovation + Fair Trade + Sustainability)
- TATA vs. General Motors
(Winning through new market category with the Nano)
The Capitalist Manifesto is an inspiring, thought provoking and important book. Forget all about classic CSR – Umair Hague is much more radical in his approach. A must read for everyone interested in making his or her company or organizations ready for the 21st century.
Buy the book at Amazon
Also visit Umair Hague’s blog at Harvard Business Review.