But in a forthcoming paper for the Institute for Public Policy Research, innovation expert Charles Leadbeater argues that alternative models of capitalism are increasingly paying dividends. He points to the \”mission driven\” approach where businesses such as Facebook and Google pursue a specific goal (enabling people to share; organising information) and make money as a by-product. The Financial Times columnist, John Kay, has made this concept a key part of his latest book, Obliquity, in which he argues that \”many goals are more likely to be achieved when pursued indirectly\”.
The move away from the narrow shareholder value form of capitalism requires the support of public policy.
No it doesn\’t you miserably stupid little twat.
If being mission driven rather than profit driven leads to greater profits being made then those companies which are mission driven will out compete those which are profit driven. If concern for stakeholders increases profits then similarly. If higher wages for the workers, care for the environment, better pensions, cuddly care or iced buns for tea on Thursdays increase profits then profit maximising businesses will do such things.
This is why we have markets for fuck\’s sake. So that companies can experiment with methods of profit maximising!
Um… I’ve been to Google business seminars and worked with Google employees – they are pretty open about wanting to make money… that is Google’s ‘mission’. Among the means of doing so is “enabling people to share” and “organising information” and advertising and searches – but that is not their mission.
“The move away from the narrow shareholder value form of capitalism requires the support of public policy.”
So to try different forms of capitalism we require socialism.
He’s a flipping moron and for two reasons.
1) Go and look at the articles of assocation of any company. In them, by law, you must list what the object of the company is. This can at times be pretty broad to ensure that you don’t keep having to have EGMs to change the articles in order to do stuff, but the one thing they almost never do is to state “MAKE MONEY” as the object of the company. Companies exist to do stuff. It is clear that he has never been near running a company if he doesn’t know this.
2) Whilst Directors have a fiduciary duty to shareholders and legal requirements to manage the finances of the company sensibly, they would be complete morons to think in terms of “MAKE MONEY”. The burning question is not the result “MAKE MONEY”, but the process of HOW to do so.
That means understanding what you are trying to do and why and how much people will be prepared to pay you to do so.
Lose your focus on your product and how it performs in the market and you can kiss your profitability goodbye.
And Facebook and other “alternative capitalism models” earn their revenue from…?
… the usual capitalist model companies advertising their usual capitalism model products and services.
You don’t say.
“Facebook and Google pursue a specific goal”
“many goals are more likely to be achieved when pursued indirectly”
Which is it?
And as has been pointed out, anyone who thinks Mark Zuckerberg or Sergey Brin weren’t in it for the cash is too stupid to be allowed a newspaper column.
If an individual owns a company he/she can choose to develop a model that satisfies his/her aims rather than tries to maximise profits. A few of these are highly successful (the most quoted example is John Lewis) mostly because they fill a niche that is overlooked by those focussed on profit-maximisation. John Kay supplies examples of these but also of how one can achieve personal goals by tackling something that appears to be unrelated.
Dirigisme has been proved to massively underperform a free market composed of individuals who often make mistakes but occasionally invent the cat’s eye or the Dyson vacuum cleaner
@John77: John Lewis is an often quoted example of how co-operatives can be more successful than shareholder owned businesses. What they forget to mention was the the business was started by a capitalist, out to make money. It was a considerable going concern that was transferred for free to its workers by the original owner. Those workers were given a free gift of capital, which to be fair, they grew into the business that exists today. But none of those original workers ever had to risk their own capital, in the way the original founder did.
There is nothing stopping anyone starting a co-operative business right now. In fact many people do, we just call them partnerships.
@Jim
Er – I pointed out (or thought that I did) that John Lewis started the company.
There is actually a major deterrent now to starting a co-operative business, called the FSA. Until 1988 all stockbrokers were unlimited partnerships that anyone could set up if they were sufficiently talented and willing to accept unlimited liability for anything that they or their employees did wrong. Within my memory (OK, that is only what I remember) a small handful of stockbroking partnerships went bust, two due to fraud by non-partner employees and the other one or two due to a cyclical downturn in business that wiped out their reserves. I have lost count of the number of limited liability stockbrokers that have gone bust since “Big Bang” and how many of them were due to the greed of the limited liability proprietors.
To be precise John Spadden Lewis Esq, who was a acquaintance of my great-grandmother. [I am the converse of nouveau riche}
ancien pauvre? Aren’t we all….
I have a bit of a problem with the logic here.
Will says that companies that are “mission driven” are more profitable than “profit driven” companies. He then argues that all companies should turn to being mission driven in order to increase their profits.
Wouldn’t that be the act of a profit driven company?