This book was my personal infusion of hope in 2020. «Reimagining capitalism - how business can save the world» from Harvard Professor Rebecca M. Henderson, is a carefully collected set of examples of businesses that are successfully combining their contribution to solving a societal problem and being profitable. Her suggestion is a business’ main purpose – the «why» it exists – should clearly state its contribution to solving one of the current societal and human challenges we are facing, such as climate change, inequality, social justice, to name a few.
Doesn’t sound revolutionary but in fact it is. We all know from Simon Sinek’s bestselling book that we should «Start with why», meaning the «why» our business exists. It lets us shift the perspective from what we offer to why we offer it, e.g. from producing cars to providing mobility. Rebecca now adds what kind of why it should be: one that serves a more equitable and sustainable world.
So, let us take the litmus test and ask ourselves this question: To which fundamental global problem do the offerings provide a solution? For example, in which way do e.g. E-cars, no-destination flights, introducing digital tools to children, solve a societal problem - or do they rather create new ones? How many people benefit from it? All or only a lucky few? We might detect that despite well-intended purposes and goals, we still encounter a lot of offerings and operations that strengthen inequitable or unsustainable behavior because they are still serving profitability. That is why Rebecca Henderson asks to fundamentally rethink businesses’ role and to bind their existence to a contribution to a sustainable and equitable society. And of course, to design, operate, govern and evaluate it consequently against this purpose. In my eyes a consequent ethical and moral perspective to markets, truly disruptive to the classical economic thinking legacy, is critical.
Re-strengthening governments’ role is key. Besides a consequent repurposing of businesses, Henderson concludes that to rebuild a truly free and fair market that serves a sustainable, equitable and just economy for everyone, we need not less, but a more capable and strong government. One that provides the necessary public good infrastructure and effectively controls the externalities to strengthen a powerful democracy.
It’s not about damning capitalism – it’s about reimagining a more equitable and sustainable version of it. The book does not neglect that profitability is essential for companies to thrive in today’s competitive landscape. In contrary, we learn that we have good reason to believe that free and fair markets have been one of the greatest forces for prosperity, opportunity, and innovation, and that we need exactly these forces to solve the societal problems we currently face. However, Rebecca underlines with general facts, figures and examples what we feel and what the pandemic has only made more urgently apparent to us: The market dynamics are heavily out of balance, eating up its own benefits and not serving the welfare of all anymore - only benefitting a lucky few.
We can do better – all the resources and knowledge are here. I love this book because it provides both a reasonable sense of urgency, but at the same time, a big reason for hope that we can do better. Most encouraging for me was to read as well about Rebecca’s personal «why» and experiences. Through that, the book successfully integrates facts and figures and carefully-selected and described examples wonderfully with inspirational personal experiences that nurture both our minds and hearts. A great, inspiring read that might help us to commit to moving out of our collective-reactive-mode and choosing to give a more equitable, sustainable world a chance and a voice. Here and now.