I read with interest these words from the recent G-20 summit. “According to Australian Prime Minister Malcom Turnbull, a former Goldman Sachs banker, warned his peers of the need to civilize capitalism.”
The leaders of the world’s top 20 largest economies are recognizing, thanks to the help of the populist movements around the globe, that something has to change. While it has been a great boon to our society over the last couple of hundred years, capitalism is now as much a menace as it is a benefit.
Yet throwing out the baby with the bathwater is the last thing we want to do. Yes, there is much that must be “civilized” about the capitalist system, the dominant economic paradigm around the globe, and we must not lose all the benefits it has brought.
Though the call for a change to the global economic system is finally being recognized by the G-20 leaders, I doubt they can really do much. For in the end, our economic system is not a political system but one of goods and services production.
To civilize capitalism, we must first civilize the way companies approach production. For over the last 150 years, the dominant paradigm for the modern corporation is organization is a machine. It is this paradigm that is the root cause of the dark side of capitalism.
First, viewing workers as cogs in the machine, whose labor efforts are nothing more than an expense to be minimized as much as possible. Second, viewing leadership as the great designer, programmer and controller of the machine, whose major role is to increase the value of the asset for its owners. These and many other aspects of the paradigm is what is unraveling and creating the great distrust of the capitalist system.
Leaders and owners aren’t going to change just because there are downsides for others. They will change because they face downsides. Owners and the executives are beginning to experience first hand the downside of the machine paradigm. The machine cannot keep up with a world that is volatile, uncertain, complex and ambiguous (VUCA). It cannot maintain the level of innovation required in the highly competitive world. It cannot respond with agility and reliance to the dynamically changing world. It cannot engage the energy, passion and commitment of the people to bring about the critical levels of creativity and productivity.
The good news is that there is a new paradigm emerging. It has been written about for over 5 decades from Maslow and McGregor to Jim Collins, Peter Senge, and more recently, the works of Fredric LaLoux, Giles Hutchins and our own work, The Living Organization.
The “Teal,” “Nature-based” Living Organization defines a new paradigm for the organization of the future. With The Living Organization System there are tools, trainings and processes to help any company move from the machine paradigm to The Living Organization paradigm.
In today’s world, you are either becoming a Living Organization or you are dying.