Character-based Capitalism: The right culture for greater innovation and productivity
Innovation is the most important ingredient for business success. It leads to better products and services to drive growth as well as ideas to increase productivity, lower costs, and enable higher employee wages.
Capitalism is the greatest economic system for innovation. Private ownership of businesses motivates owners to have the self-interest to accumulate wealth and innovate for competitive advantages. However, more innovations are created when every company employee has a capitalist mindset to think and act like an owner.
Some capitalists become arrogant and greedy, focusing more on making more money for shareholders than caring for all stakeholders. They engage in win-lose transactions with employees, customers, and suppliers instead of building long-term win-win relationships so stakeholders want to help their companies succeed. These capitalists confuse selfish interest with the enlightened self-interest Capitalism intends resulting in dysfunction and lack of employee engagement.
Innovation requires a special kind of culture built on the values of trust and care. These values make people comfortable expressing their ideas, resulting in greater collaboration that speeds the pace of innovations. More leaders are recognizing that to attract and retain talented people, companies must be about more than profits. Business leaders must build trust with and demonstrate care for all stakeholders while helping employees see their work as meaningful and contributing to making the world a better place.
Character is values in action. To be effective, capitalism must be character-based by putting into action the values of trust and care. Character-based Capitalism is about:
“Making More Money by Doing What Is Right for All Stakeholders”
Stakeholders include employees, customers, investors, suppliers, communities, the country, and the planet. A culture of Character-based Capitalism is built on four pillars or principles: