Paul Holmes 22 Oct 2010 // 2:35PM GMT
Gary Hamel’s latest post—actually, it’s the length of a decent magazine article, but well worth every word—at his Wall Street Journal blog is a brilliant analysis of the public relations challenge facing big business today and of the new thinking needed to meet that challenge. Hamel starts with some alarming statistics—fewer that four in 10 consumers feel big business makes a positive contribution to society, only 19% have “quite a lot” of confidence in large corporations—and suggests that “the real threat to capitalism… is the unwillingness of executives to confront the changing expectations of their stakeholders.” People, Hamel says, “long for a kinder, gentler sort of capitalism—one that views us as more than mere ‘consumers,’ one that understands the difference between maximizing consumption and maximizing happiness, one that doesn’t sacrifice the future for the present and regards our planet as sacred.” As for what stands in the way of creating such “a conscientious, accountable and sustainable sort of capitalism,” Hamel sees “a matrix of deeply held beliefs about what business is for, whose interests it serves and how it creates value. Many of these beliefs are near canonical (at least among CEOs of a particular generation or ideological bent). They are also narcissistic and archaic.” He then goes on to list some of the most toxic of these beliefs: · The paramount objective of a business is to make money (rather than to enhance human well-being in economically efficient ways). · Corporate leaders can only be held accountable for the immediate effects of their actions (and not for the second and third order consequences of their single-minded pursuit of growth and profitability) · Executives should be evaluated and compensated on the basis of short-term earnings (rather than on the basis of long-term value creation, both financial and social). You can read the rest for yourself, but few public relations professionals will disagree with any of them. And he finishes by asking readers for their own suggestions. Well I have one, and it slightly undercuts Hamel’s article, which is based in part upon the argument that business needs to change in order to avoid “the sort of regulatory constraints that were once reserved for nuclear power plants.” Because I think one of the most pernicious beliefs is that regulation is by definition bad for business. I would make the case that regulation that provides genuine protection to consumers is probably essential to restoring lost trust and confidence in business. Because not every company is going to adopt Hamel’s enlightened view, because we have seen how difficult it is for even good companies to resist joining in when others are reaping short-term advantage from unethical behavior, and because firms that hold themselves to genuinely high standards should welcome the imposition of at least modest standards on their competitors.