Tuesday, February 28, 2012

"Ethical Capitalism"...The Next Big Thing in Corporate Profitability

Corporate America is the foundation of America's strength.  The greatest hope for America are its corporations...really!

Many people would likely argue that corporations are self-interested, money-grabbing organizations devoid of any human empathy.  And, this is in fact in most instances is probably quite true. But, embedded inherently within that attitude lies the potential for that self-interest to make a significant positive impact on Americans.

The business movement that is currently evolving is that corporations will see increased profits as the direct result of benevolent actions. I refer to this as "ethical capitalism".

Case in point is the "green" movement.  As public pressure and business opportunities are created due to a demand for cleaner environmental initiatives then it has been demonstrated that this is an area where companies will focus their attention.  The decision by corporations to pursue profits in the environmental arena is a business one and not personal.  To my earlier point, businesses will naturally gravitate to the revenue opportunity and therefore environmental initiatives have become part of the American corporate mindset thus providing a strong sustainability platform for long into the future.

What should be the next step in the green revolution of profitability is that corporations profit more from doing societal-friendly activities.  From a marketing perspective, companies have long known that being seen as part of the community and a good corporate citizen is good for business. Companies will line-up for opportunities to sponsor charitable causes and to provide safe products because the consumer population demands them and it is good for their brand building objectives. Therefore, corporations know that the appearance of being a good citizen is good for business in terms of building brand value and from a product standpoint safety leads to a reduction in the number of law suits and reducing insurance premiums.

The next tactic then in the evolution of corporate contribution is to go well-beyond charitable support, fund-raising and brand building and to make resources and expertise available to the public at large.  For an easy example, one area where corporations can have a dramatic and immediate impact is in terms of disaster relief.  Whenever something happens around the USA the corporations should be the first ones on the scene to help.

The Hurricane Katrina flood in New Orleans could have benefited dramatically from local and national corporations by having access to their expertise in order to provide relief, rebuild the city and care for those affected by the devastation.  A wide variety of companies could easily have pitched in by providing human expertise, labor, supplies, management coordination rather than just providing funds or basic supplies like water and blankets.  Further, corporations are used to working within an integrated network of other companies and suppliers to achieve their goals which is something that governmental agencies cannot claim.  It would have been much easier for a home improvement retailer to work with engineers and contractors to rebuild parts of the city rather than having to wait for governmental resources to coordinate the effort.  Corporations also have the luxury of operating by objectives and have to be less considerate of public attitudes.

If corporations actually pitched in first-hand to actually address the immediate problems then they would be rewarded by increased brand recognition, sales increases and consumer loyalty...all of which which would lead to enhanced profitability and stock price for the company. The result of "ethical capitalism" is increased corporate benefits to the bottom-line through benefiting America.

Sunday, February 26, 2012

Precedent...It Doesn't Matter Anymore

Precedent is the quicksand of the American system and it is time to put that outdated concept to bed.

In our modern world, almost every issue has become so complex and ultimately very different from the next in terms of circumstance and context that no single legal, political or moral decision or action can rely on the thinking or actions that preceded it.

In business, the concept of zero-based planning starts with a tangible objective and does not take into consideration a predetermined budget, existing infrastructure or action-plan. One then creates a strategy and a corresponding action plan to fulfill the stated objective. This is the approach that needs to be under-taken moving forward in all areas of modern society.

For example, the most obvious area where precedent dominates is in the criminal world. Let's face it, the circumstances of any given violent crime is different than any other. Even in the simplest of crimes...say a street robbery...the intent, the motivation, the circumstances and the antagonists are very different. Therefore, why would other crimes be utilized in a trial or in a verdict? One can make the argument that perhaps in the sentencing process precedent can be utilized in terms of establishing punishment but in the facts of the case it is irrelevant.

Now, extrapolate this thought into terms of national and global politics, economics, social development, public policy etc. and why then would thinking or methodologies of the past be relevant in the 21st century? World events have to be considered in terms of modern conditions and not some by-gone era. By ignoring precedent the path can become clearer as new factors can be considered on their own merit. For example, dealing with a Muslim component in society has never been part of the American heritage so utilizing zero-based planning allows this fact to be considered whereby precedent has no relevant frame of reference.

Zero-based planning also has the primary benefit of ignoring and by-passing any existing limitations in strategic and action-plan development. An obvious area to highlight where this methodology can be extremely beneficial is in terms of governmental operations whereby political agenda and bureaucracy more often that not supersede effectiveness. By eliminating the necessity to consider political history, previous legislation and bureaucratic road blocks modern and efficient policies and programs can be developed that deliver the objective rather than be watered down to the point that they are virtually meaningless.

Precedent and current institutional conditions are too varied and bulky to the point that the limitations of previous actions prevent virtually any part of society from moving forward. Hence, the US has become stagnant and needs to free itself from it's own self-imposed shackles.

Friday, February 24, 2012

Representative Democracy is not Democratic

America is free, but is no longer a democratic country.

Representative democracy is fundamentally defined as representation of individual citizens segmented into constituencies. The party system however, has become so prevalent and powerful that elected officials are now representative of the party platform rather than constituent concerns. This obvious situation is clearly not democracy.

The all-pervasiveness of party politics also means that the original intent of the House of Representatives which was to serve as a governing and legislative body is more often that not merely a conduit for confrontation and negativity. The goal of many party members is simply to besmirch the governing body and the President's office such that their party position appears more favorable and increases the power base and the chance of winning elections in the future.

Finally, representative democracy was a concept invented hundreds of years ago and has ultimately lost the ability to deal in an efficient and timely manner in regard to most of the issues of the modern world that have become much more complex. Even under freer circumstances for choice and direction and with the right-minded members, no single individual representative can propose intelligent and appropriate direction on every issue thus further making the case that representative democracy is non-existent. Even with ideal members, they still only have a limited range of knowledge and cannot therefore represent the entirety of the their constituency on every issue.

Good governance and fiduciary duty to constituents has to come back to the forefront as the primary role of any elected representative. Increased access points for the general population and specific expertise must be increased such that intelligence is brought to the table, common and differing opinions are debated openly and fairly and most importantly that non-agenda driven conclusions are arrived at.

Hence a "new way" is required to replace representative democracy.

Tuesday, February 21, 2012

The Real Value of Money

Money is a great gift to humanity.

Humanity by nature is judgmental and money is not personal. Utilizing money and wealth as a criteria for human judgement eliminates prejudices based on skin color, religion, geography, gender and this is a great thing. In our modern world, money trumps all else in terms of valuing people's worth and is a wonderful comparative tool such that we can individually get a sense of our worth and our placement in society.

Where this personal valuation has gone awry however is in terms of the origin of one's individual wealth. The mere possession of money has come to supersede the means of accumulating it. In our modern world any single person can accumulate wealth with no regard to the impact one makes on other individuals or society. The worst aspect of our current system though, is that one can accumulate wealth at the expense of others.

In my eyes, accumulation of wealth at the expense of others is not wealth that should be judged as valuable or honorable. I suggest, that wealth that is accumulated without adding value to individuals or society should be shunned and per my initial point regarding human judgment, should actually be judged as negative.

The effect of this negative label would be to encourage individual wealth-building as a result of benefiting a wider group of persons. It would also serve to keep those who have amassed their fortunes in a less than savory manner from having personal influence or access to broader political, business or social institutions.

Unsavory then becomes the criteria for valuation at this stage. Unsavory needs to defined as wealth-accumulation that derives from 1) illegal actions, 2) curtailing production, 3) reducing societal economic conditions or 4) detracting from the human condition. Recent examples of each would be as follows: 1) Bernie Madoff's 25 years of fraud, 2) stock market speculation, 3) Wall Streets debt mortgage products and 4) pornography. This is just a quick list.

Let me state clearly that anyone is free to amass as large a fortune as they choose.

Ethics though need to be re instituted into wealth-building such that the amount of money that one accumulates is proportionate to that contribution that is made throughout that process.