Time for a “Kinder, Gentler” Capitalism?

The “Noble Enterprise” business model uplifts people and profit.

As we witness the decline and implosion of major companies, with the ensuing government attempts to shore up some of these companies and the very economic system within which they operate, we wonder not only “What went wrong?” but also “There must be a better way – a better business model! The syndicated article below (which you are welcome to use and distribute, with the complete credit at the bottom) addresses this issue, urging business owners and corporate executives to take the time – especially during this seasonal time of Goodwill to consider a different business model, one that puts people at the core of the business – recognizing not only the contributions of their Minds, but also of their Hearts and Wills – and a business model that serves a larger purpose and acts with ethical values.

We live in an era when companies have overextended themselves, pursuing ever more growth and profitability – with CEOs getting ever larger compensation packages – and even golden parachutes when forced out due to lack of performance. With the latest meltdown of the financial industry, we’re seeing the downside of such a business model. Some call this greed. Others call it poor management or just irresponsibility.

Society rightly wonders if business will be primarily about greed and unethical practices, or will it play a positive role in society. And we rebuild companies that have fallen is one challenge. Even more important is how we create a new business model that capitalizes on the good – and potential good within the business community?

The battleground regarding what to do about the financial institution mess is mostly about governmental oversight vs. the free market. While that is part of the story, it’s not the whole story.

Will the answer we need come in the form of outside intervention – from more governmental oversight and regulation? Or might there be an inside answer? Could there be a better way to deal with an industry segment that has seemingly gone astray (or some would say, shown their true colors) than just outside oversight?

The long-term solution will not be about more governmental intervention. It will be about utilizing the forces already existing – within the business world – that can “right the ship” and create businesses that go beyond just the profit model that has driven business ever since the emergence of Capitalism.

Why? Because we live in an era that has other forces at work. Companies will succeed in a much larger and more responsible way when they recognize that their long term success and sustainability relies not just on increasing immediate profits, but rather on excellence in other dimensions such as
…..building great places to work that attract great people and inspire them to grow and contribute their best
…..serving customers in ways that go beyond the maximization of profit on every transaction
…..serving the communities within which they operate, and
…..recognizing that business is not just about the material dimension, but about something deeper.

When employees see a higher purpose to their company than merely serving the material needs of customers, but also contributing something of deeper value to customers and the world, they participate in creating a great company that attracts dedicated people and inspires them to new heights.

Ironically, despite this approach being not just about profitability, this noble approach to business can generate impressive sustainable growth and profitability. Such a Noble Enterprise approach then serves all constituencies
….customers
….employees
….financial shareholders
….community
– in a balanced way that actually enhances all dimensions and creates a stronger company that over time can run rings around a company that is only focused on one dimension, the financial shareholder.

The Emergence of Noble Enterprise

Such companies are Noble Enterprises. They have been emerging and succeeding right under our noses – following the beat of a different drummer than the Profit Motive above all else. What’s the evidence of the emergence of a new business model?

* The rise of socially responsible investing – and its success. Companies, and the funds that own shares in them, can perform just as well financially as those not subscribing to corporate social responsibility. That is unexplainable in a business model where profit is everything, and thus was unthinkable only a few decades ago.

* Individual companies become prime examples of nobility built into their infrastructure, such as:

** PEOPLE- Centered: Putting People first, such as at Southwest Air and JetBlue, where the culture becomes a source of competitive advantage

** PURPOSE – Building a Company of Larger Purpose, such as Joie de Vivre, a hotel company, that sees its purpose as making its visitors feel at home, a purpose that people throughout the ranks believe in and find ways to activate.

** VALUES -Making decisions and acting with Ethical Values – countless companies have begun defining the values they stand for and are working to live those values in all they do. One such company, a struggling telecommunications company actually turned away a potential lucrative customer because one of their values, respect, was not being honored by the customer in how it treated the company’s sales reps. That act alone helped build morale and confidence of the sales force, who easily replaced that “lost” potential customer.

** ENVIRONMENT – Acting as if waste and using up natural resources or spoiling the land has not just a social cost, but is to be avoided. Mohawk Paper, a privately-held fine paper company, gets all its electricity from wind power, as a conscious choice. Other examples abound.

** COMMUNITY – devoting resources and attention to the community within which we operate. White Dog Café devotes some of its time and resources to social causes, and builds it into the experience that customers have at the restaurant.

What these companies all have in common is that they are practicing a kind of HUMAN ECONOMICS which is replacing or building on the old MATERIAL ECONOMICS that has driven Capitalist business cultures since the time of the Industrial Revolution.

These companies are just the tip of the iceberg. Someday, we’ll look back and see these and other companies as the pioneers that they are, rather than an enigma.

With all that’s shaking our economy and companies in it, this is a good time to take a long, hard look at your own company. What are any weaknesses in your company’s purpose, values, business strategy and reward system that might land you and your company on the list of companies that overdid the old model of Profits? To strengthen your company and achieve financial success, what other dimensions (like those above) could you work on to strengthen – for the benefit of your company’s longevity and success?

As Einstein once said, “No problem can be solved from the same consciousness that created it. We must learn to see the world anew.” If your company has “profit” problems, instead of attacking this from merely a financial perspective, try broadening your perspective to that of a Noble Enterprise and work on all the key dimension of success. To respond to those and other business challenges in today’s business world, leaders need to create Noble Enterprises. In this business model, management can draw forth and utilize the full range of human energies – not just the fruits of the mind, but also of human spirit. In the process, they will make great places to work, and generate great overall business performance.

———————————————————————————
Darwin Gillett is author of NOBLE ENTERPRISE: The Commonsense Guide to Uplifting People and Profits, from which this article is adapted. Through his consulting, coaching, keynotes and seminars, he helps business executives create competitive advantage and achieve sustainable growth and profitability. To learn about his publications and services, visit http://www.noblebusinesssolutions.com.