In the twentieth century, worse was often better, writes Umair Haque in ‘The New Capitalist Manifesto: Building a disruptively better business’ (www.landmarkonthenet.com). “What was better for the bottom line was – perhaps not immediately, absolutely, or deliberately, but often, ultimately, and sometimes unwittingly – worse for people, communities, and society,” he explains. “Twentieth-century capitalists tended to build worse-is-better businesses, engines of artificial, unsustainable, meaningless, thin value. That’s the essence of the capitalist’s dilemma.”
Thankfully, in the current century, ‘better is better,’ one learns. With tables turning in this interdependent world, and the contours of supply and demand being reshaped, what the author finds is that investors, buyers, suppliers, governments, and customers are all beginning to reward those who are free of deep debt, and conversely punish those who can profit only by overleveraging themselves on it. What’s better for people, communities, and society is already, and will continue to be, better for the bottom line, he avers.
Make a meaningful difference
A chapter devoted to the shift ‘from goods to betters’ opens by assuring that you can use value conversations, value cycles, philosophies and creativity to make a meaningful difference. “Instead of just producing goods, a constructive capitalist makes betters – bundles of products and services that make a difference to people, communities, and society by having a tangible, meaningful, enduring positive impact on them.” An example that Haque mentions is of Nike, which is helping every customer master the discipline of becoming a better runner, instead of – as yesterday – merely persuading people to wear cooler shoes.
Better-is-better businesses create ‘thick value’ that lasts, matters, and grows, the author notes. Thick value, he adds, is value that is more sustainable, meaningful, and authentic than that of rivals. Sustainable value, for starters, is what lasts beyond production and consumption, rather than falling apart like a house of cards every few years, quarters, or months. “When you buy food that benefits the environment at a twenty-first-century Walmart, the value that is created for all endures long after you’ve eaten the food.”
Meaningful value is about having a positive impact on people’s outcomes, instead of achieving profitability by excluding and ultimately disempowering people – whether buyers, suppliers, competitors, or consumers – in order to limit and stifle rivalry, Haque elaborates.
Where Gap’s advantage depends on squeezing suppliers, Threadless’s advantage depends critically on including customers in product development, and empowering them to choose, he observes, as example. The latter, he finds, enjoys lower production, marketing and discounting costs; and, more deeply, “it prospers by making clothes that matter more to people, matching their preferences more closely: a less risky, less working-capital-intensive, more sustainable set of economics that reflects the smart growth of higher-quality profit.”
Shared, growing prosperity
The third component, ‘authentic value,’ is value that grows, by benefiting boardrooms, shareholders, people, and so on, through a shared, growing prosperity. In this context, Nike is again lauded, for selling recyclable shoes. Its ‘considered design’ approach aims to ‘reduce waste throughout the design and development process, use environmentally preferred materials, and eliminate toxics.’ Also, with the vision that ‘anything and everything can be recycled into something just as desirable,’ the company’s two factories (one in the US and another in Belgium), slice and grind shoes into rubber, foam, and fabric, the book informs. “The rubber is sold to create indoor soccer and football fields, and the foam and fabric for basketball and tennis courts.”
Declaring that construction is today’s disruption, Haque sees ‘a new generation of renegades’ toppling ‘the tired, toxic status quo.’ The deeper promise in the unfinished journeys of these new companies, according to him, is the hope of reaching the fertile shores of a revitalised prosperity, ‘navigating past the depleted affluence of the industrial age, beyond the edge of the world of business as we know it…’
A book that can shift traditional corporate priorities.
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