A radical overhaul of business strategy
Growth in developed countries has been steadily slowing for the last half-century, and this is a lasting, historic shift more significant than a crisis, correction or crash, according to Umair Haque in his book The New Capitalist Manifesto: Building a Disruptively Better Business. The global poor have been subsidizing the rich to fuel overconsumption, and the natural world, communities and society have been marginalized.
The problem is that under industrial-era practices, businesses have been able to extract what the author calls “thin value” profits by shifting costs onto someone else. The new types of enterprises which will thrive in the 21st century will be “constructive capitalists”, which will do some or all of the following:
- Renew resources instead of exploiting them
- Be more responsive to supply and demand by allocating resources democratically
- Use “philosophies” that create value rather than “strategies” that extract value
- Creating new arenas of competition rather than dominating existing ones
- Seeking payoffs that are meaningful in human terms, not just financial ones
The book goes on to describe ways in which some companies are already making the shift. Walmart has taken on challenging new sustainability goals. Nike has adopted new design principles to reduce waste and maximize recycling. Lego has opened up the design of its products to users. Google aims to stay competitive by liberating data instead of trying to lock users in. Tata has created an entirely new category of car with its Nano, and Apple has done similar things with its products. Nintendo’s Wii is turning video games into a focal point for social interaction.
The book is written in a bold, provocative style similar to that of Gary Hamel (who has written the Foreword). The author aims more to challenge you out of your complacency than to get you to agree with him. He challenges you to use the book not as a blueprint but as inspiration for creating your own blueprint for the future of your business.
I found the author’s ideas quite stimulating, although I am not sure that it is possible to build a business using all of the features of “constructive capitalism”. For example, most people did not see the need for an iPad before Apple created one, so I do not think that “allocating resources democratically” is entirely consistent with “creating new arenas of competition”. In the Kindle version of the book, some of the figures are almost illegible, although this does not detract from the value of the book as a whole. I disagreed with much of what the book says in its predictions for the future, but I believe that it is partly right; the problem is, I do not know which parts.