With unprecedented changes, the very old stories, models, frameworks, and perspectives don’t work very well. Think about how globalisation and technology is changing things, the next generation will have a smaller world than we have it presently. Over the recent decades now, we’ve seen the privatisation and commercialisation of social/public mechanisms like electricity, telecommunication, and water corporations by government. How constantly we think about the issue of sustainability.
With this idea, people expect business to be active on social issue, from keeping environment clean to bridging the gap between the poor and rich. In all of these is the impact of pervasiveness of information technology more than how we had it in the last two decades ago, and which is going to be more effective and efficient on the next few decades that information can be more easily acquired than we have it now. This should account for a change in the old story of business practices.
The old story about business is that: Business is primarily about making money and profits. The only constituency that really matters are shareholders. And capitalism works because people are completely self-interested, and will only act for others is they have the proper incentives. Business works because people are competitive and greedy, and as if by an invisible land: the greatest good emerges. Alas, this is story that is disrespectful for human being. This story needs to change!
Towards a new story about business is that business is primarily about purpose, money and profits follow. For the fact that we need red-blood to live doesn’t mean the purpose of life is to make red-blood cells. Or for the fact that fire needs oxygen to exist and survive doesn’t mean the purpose of fire is to make oxygen. Business has to make profit but it doesn’t follow that the purpose is to make as much profit as possible. The purpose of life is not to make as much red-blood even if I have to make time concentrating on making red-blood. The idea that shareholder first, completely misses the idea of what it takes to build a sustainable business. Think about employees who show-up everyday putting his ideas and energy to make business better.
Human begins are social, spiritual, sexual, emotional than going after rewards and avoiding punishment. Once you start treating people as less-human, such as rewarding and punishing, they start to act like animals and it becomes a self-fulfilling prophecy. Most people tell the truth and keep their promises, and act responsibly most of the time, and we need to respect that behaviour. Business and capitalism are great system of social cooperation and value creation ever invented, competition is important on a free society since it ensures options. But, the engine of capitalism is value creation. It is about how to work together to create something no one can create alone.