Some interesting odds and ends in the news have caught my attention as still more examples of the real time/real world relevance of a moral capitalism.
Sandra Sucher, a Harvard Business School professor, has a book out on trust. What a surprise! She finds that an intangible moral force or condition – trust – has consequences which can be measured in money. The book was written to provide a road map “to build, improve, recover or sustain the trust of people and groups who rely on you and whom you rely on to build a thriving business.”
Is this not just another way of saying that a company cannot be profitable unless it intentionally manages its stakeholder relationships in good faith to achieve common benefits? The Caux Round Table has been advocating that since 1986.
I ran across some cynicism about ESG investing, an accusation that if fund managers invest money that belongs to others who stand to gain or lose according to the decisions of the fund managers in less profitable companies which tout superior environmental (“E”) performance, such managers are negligent in their duty of care towards those to depend on their investment results.
With all the delays and shortcoming in supply chains, I found it ironic to read that consumer habits contribute to the problem. It seems that across e-commerce supply chains, about 30% of purchased items are returned, while half of all clothing is sent back by dissatisfied customers. The reverse supply has no efficiencies of scale; it is costly and inefficient.
It is reported that many products returned to Amazon have just been thrown away – a waste.
A survey of 1,000 adults revealed that 55% of online shoppers make online purchases knowing that they were likely to return at least some of the items purchased.
If customers set the values for what markets deliver up, how can we make them more prudent and less wasteful?
Speaking of customer behaviors, an article pointed out that since the start of the pandemic in the U.S., rudeness is on the rise. Due to the pandemic and measures imposed to limit its impact, people find themselves anxious, confused and resentful. They take out their disappointments and insecurities on others. Social interaction, so necessary for capitalism, responsible governance and civility is now more unpleasant. Approaching others carries new risks of being affronted and disparaged. Who needs that, even on a good day?
A shift in the mores of capitalism towards stakeholder centricity may explain why the search criteria for CEOs have changed. Now, companies are, more and more, looking for candidates strong in soft skills of coordinating and communicating with multiple people. Persons more likely to be hired as a CEO are also more likely to have charisma and they score higher on getting things done and thinking strategically.
As firms rely more and more on knowledge workers, given the increased use of automation and computers, subordinates do not need to be told what to do. Rather, they need to understand the firm’s goals and to toil together effectively. Getting them to that kind of collaborative excellence is the job now of the CEO. Bosses need social skills when their job is more to persuade than instruct.
In our new era of companies with a purpose and sustainable business models, CEOs must mollify politicians, respond to activists and put out – if possible – social media firestorms.
One wonders, however, if our new capitalism will reward managers more than leaders and if so, what will be the cost of not having leaders?