The Unacceptable Face of Capitalism

A letter from the founding editors.

Let's get this straight. Dennis Kozlowski, fresh from collecting hundreds of millions of dollars as CEO of Tyco International, decides to transform himself from "Deal-a-Day Dennis" to "Dennis Does Degas" (actually, Monet and Renoir). He joins the board of the Whitney Museum, hires an expert to pick paintings for his company-paid apartment in New York -- and then allegedly skips out on the sales tax. Meanwhile, Tyco is losing 75% of its market value. Now there's a leadership formula!

We've had just about as much as we can take of Enron's Kenneth Lay and Jeffrey Skilling, Adelphia's John Rigas, Dynegy's Chuck Watson, and Mr. Kozlowski -- not a single one of whom, we are proud to say, has ever appeared in Fast Company. Did we know before everyone else that these guys were phonies? Hardly. But we knew that they didn't represent the style of business that Fast Company champions.

In 1973, British prime minister Edward Heath denounced Rowland "Tiny" Rowland, the mining baron, as the "unacceptable face of capitalism" -- a phrase that feels depressingly apt today. But there is another face of capitalism, one that this magazine has been chronicling since 1995. Even in these cynical times -- perhaps especially in these times -- it's worthwhile for us to remind ourselves of a few principles that animate the real future of business.

First, the front line drives the bottom line. Forget the CEO as celebrity or villain. The companies with the most talented people deepest in the ranks win. A case in point: the passionate innovators behind Nike's Women's Movement, people who are helping the company click with female customers.

Second, great companies are built on ideas, not deals. Too many CEOs assume that the only way for their companies to prosper is to get huge -- and that the easiest way to get huge is to buy other companies. But there's a more enduring way to grow: by embracing bold ideas that change the game. In How to SMASH Your Strategy, Charles Fishman explores a change-the-game bet at IBM.

And finally, the high road is the only road to the future. This principle is the motivating force behind this month's cover essay on The Female CEO ca. 2002. Very simply, a great business is great for men and women -- and it's time to address the issue squarely.

If today's scandals do nothing else, they force us to face the unacceptable face of capitalism -- and point ourselves back in the right direction.

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