- December 2, 2016
- Corporate communications
As the fall out continues from another shock election result, this time in the US, it is natural to look for scapegoats. Facebook and others have been challenged to take responsibility for the dissemination of ‘fake news’, while others point to the collapse of political authority or the one dimensional campaigning of Clinton and company.
Most agree however that the fundamental reasons for the widening societal chasm are economic. The decline in manufacturing, combined with automation, austerity, the banking crisis and the liberal takeover of traditionally socialist political institutions have all combined to create a disenfranchised and unrepresented population. As a result, a significant challenge has emerged, not only to liberal democracy, but to current notions of capitalism.
How will business respond? Despite the challenges, capitalism has proved remarkably versatile and resilient over the last 500 years and it can adapt again. An optimistic view would be that a fairer, more sustainable form of capitalism will emerge that questions the notion of shareholder primacy and instead attributes value to a much broader set of metrics. The most profitable businesses will be those that most successfully balance financial objectives with culture, ethics, equality, contribution to community and environmental stewardship.
Charismatic business leaders will emerge with a clear understanding that their license to operate depends upon a much deeper, more direct and trusting relationship with their stakeholders. And financial institutions will increasingly make investment decisions based on a company’s long-term performance and prospects rather than its quarterly financial updates.
In this scenario the communications industry will also need to adapt. We as an industry have too often focused on helping organisations get through the short term issues often at the expense of the long term reputational factors that really create value. And the industry must take some responsibility for creating anodyne business leaders, media trained within an inch of their lives, well versed in the many different ways of saying precisely nothing. Business needs a new language, not only in terms of what it is says, but also how it says it, and we can and should play a key role in its creation.
Of course there is an opposing view. Pessimists will predict, particularly in the United States, a ruthless exploitation of light touch regulation, lower levels of corporate tax and higher barriers to foreign competition, lining the pockets of bankers and delivering even greater reward for executives and shareholders. Ironically, the electorate’s protest vote may ultimately result in increased inequality, leading to more extreme and dangerous election results in the future – and potentially an existential crisis for capitalism.
Unfortunately, that scenario does not sound too far-fetched. But it has felt for a while that business is at tipping point in appreciating the direct link between superior performance and fairer, more sustainable long term business strategies and practices. Let’s hope the events of the last six months give business the nudge that it needs.