In earlier posts, I’ve laid out in some detail the “problems” that businesses generate in our society, which are both intended and unintended consequences of the construction of our market economy. The solutions to these challenges are straightforward, and based on directly addressing these three ironies that are at the heart of how businesses are engineered to function:
ü Governments need to develop and enforce the various input pricing that businesses would pay, and these prices must takes into account the cost of known externalities;
ü For improved productivity and fixed cost management, businesses should investigate the increasing use of new owner-contractor talent renting models, especially in high knowledge based industries;
ü Businesses, consumers and the social sector need to work together to develop “trusted marks” across ecosystems and critical supply chain systems to help businesses and consumers better match up around specific brand promises within the greater context of socially acceptable corporate performance.
There are many groups that today are actively working on these general areas, and they are enjoying various levels of success. On the first count of pricing externalities the current focus is on carbon pricing to deal with climate change. Water pricing is being actively researched in some jurisdictions and its eventual impact on some industries.
However, we have only really begun to tinker around the edges of the current “toxic machine” of business. There is much that needs to be done to design-out the toxic aspects of business and better align our business outcomes with what society increasingly says that it values: a cleaner and healthier environment; meaningful, respectful, and flexible work; and consumers having access to full risk information so that they can make informed consumption decisions.
Unfortunately, we won’t get the desired outcomes by merely tinkering, or by tackling the various challenges as independent, unrelated issues, or even by exhorting businesses to act “ethically and socially responsible”. It is in the nature of the business – in fact it is literally embedded in the DNA coding of the business – that business will continue to operate in a way that maximizes profit. This is what business does, what it is excellent at doing, and it is the key central feature that must be fully embraced to re-align business.
So, let’s not throw the baby out with the bathwater – instead let’s use the profit-seeking expertise of business and adjust the pricing inputs to provide the outcomes we want.
What would a truly detoxed business look like?