Change the world!

Last night there was brilliant programme ‘In Business’ conducted by the redoubtable Peter Day, who must be one of my favourite people on Radio 4.  The edition was called Crunching the Crisis and he talked to Richard Florida, Gary Hamel and Roger Martin.  It’s absolutely worth listening to –  http://bbc.in/onkV6H – not just for itself but because in a way, it was like a  call to arms.  Essentially what they were all saying is that some of the accepted paradigms for business must change!

In my role as an advocate/strategist for the creative economy, I spend a lot of time fighting for recognition of how the sector is different – that, with an ecology that is characterised by 94% micro businesses, yet with a sector growth record that outstrips all other sectors, the sector provides a new model of doing business successfully.  For example, a frequently used canard is the question about the size of the company – creative businesses are regularly castigated because they don’t ‘grow their businesses’.  There’s something wrong with us that we don’t see the need to take on lots of employees.  It must be incompetence, or lack of seriousness, or that we’re simply ‘life style’ businesses, in that ghastly pejorative phrase!  But yesterday, Gary Hamel, another hero,  a professor at both Harvard and London Business School, talked vividly about some research he’s recently done across 22 industries, where they found there was not one case where size and profitability were co-related.   This is a real opportunity to rethink the metrics of business success in a 21st century context.

The way the creative sector works is largely based on the need of the individual creative entrepreneurs to have a sense of control over their work, their creativity, the way they live.  It influences everything we do, every decision we make.  We don’t generally seek equity investors because we are not prepared to give up or share that control.  We don’t take on huge staff numbers because the management distracts from the essence of why the company exists.  We’re grabbing with huge enthusiasm the liberation the internet offers because it allows us to extend our control – we can upload, we can distribute, we can disseminate ourselves – increasingly, we no longer need the big corporates to do that.  So there are good solid reasons why we resist the growth mantra.  Or maybe just simply reinterpret the measurement of growth.  The way we work involves far more collaborative working than has happened in other sectors.  The recognition of other people’s good ideas is a key characteristic of the sector without being confused with the need to own those other ideas.  The way some famous large companies grew, for example, by buying up other small companies and either taking over or burying their work, is diametrically opposed to the way our sector normally works. Potentially, it is far more likely that our model of doing things will influence the way things are done in the future.

As it is, the rest of the world increasingly gives voice to its frustration at its own lack of control. As Hamel points out, people with power, whether in business or government, are positively gifted at finding reasons to increase that power, to centralise the decision making, to accumulate more power.  As a result, people are feeling increasingly less in control of their own lives, and that the decisions that are made have less and less to do with their own lives.  This leads to an erosion of trust to the point where we now expect companies, even politicians, to behave badly.  No wonder there has been an explosion of resentment and anger recently.  The old ways will not do and it really is time to think about how we can help mobilise for change.

Arguably, according to Roger Martin of Toronto’s  Rotman School of Management, one of the key reasons that things have got out of control in business is that, in 1976, The Theory of The Firm was born, promulgated and adopted across the western world.  It said that, if the interests of management and shareholders were aligned, everyone would benefit.  This then meant that the focus, and the rewards, of management were measured against targets for shareholder satisfaction that were set without regard to the consequences for wider stakeholders.  Just looking at pension funds, for example, which should be a platform for the rest of us to have our voice heard if we and they were ever to take it seriously, with pension funds, the people who have reaped colossal rewards are the fund managers and the shareholders, while, by contrast, the pensioners have suffered and continue to suffer.  As Martin points out, (in his new book Fixing the Game) this is like having the players in a game bet on the outcome of that game.  We made that illegal years ago.  The sports world itself realised how detrimental the impact would be on the game itself and stopped it.  Yet this is exactly what the system has encouraged and nurtured in the business world.  No wonder we are in crisis.   But nothing seems to happen –  the banks get bailed out (‘too big to fail’ – how did that come about?) and continue to grow, increasing their size and their profits. Not only do we not get apologies for the massive damage and disruption they’ve caused, they refuse even to recognise what they have done.  They sit in front of Parliamentary and Congressional Committees and openly concede that, whilst their staff are out selling toxic deals to the general public, the executives sit in their offices and marvel at the gullibility of people like us.

Richard Florida points out that history shows that what will get the world out of this crisis is the innovation capacity of human beings.  The level of innovation in the ‘30s, the last big crisis, made it the most “technologically progressive decade of the century, exceeding even the big tech bubble of the ‘80s.”  Today, increasingly, people and companies, especially the small companies (!), are creating new innovations all around us – everywhere, except in the financial services!  What will wake them up?

In the end, we will.  Us and people like us.  If we change our buying behaviours, the companies, the banks, will follow suit.  It’s our strongest suit.  If we as customers make it clear that our values matter, in life as in business, then the financiers have no alternative but to listen and to follow.   They say you are more likely to change your partner than to change your bank.  Well, we should change that.  It’s obviously not enough to say it – we have to do it.  We have to show by our own behaviours that we insist on change.

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”
— Margaret Mead

Anamaria Wills Anamaria@cida.org

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