A Call to Action

In her new column, this noted author and Harvard B-School professor says the 20th century model of capitalism is dead.

My parents trusted corporate America, embracing its newfangled products: processed food, backyard mosquito foggers, and pension plans. Still reeling from the sacrifices of war, they kept faith with the companies that bolstered their standard of living and enriched their lives with an unprecedented cornucopia of affordable goods. They never imagined that the processed food might clog their arteries, the mosquito fogger poison them, or the pension plan go bust.

Now, that faith has turned into dark mistrust. I spend $600 a month on my family's health insurance but put in hours arguing over legitimate claims. I sign up for a cheaper long-distance plan but find I am charged more. In each case, my complex needs are invisible to the company, overshadowed by its simplistic logic of efficiency and cost control. We now take such experiences for granted, but the price is high.

According to a recent Harris Poll, only 4% of U.S. adults trust HMOs, and only 12% trust telephone companies. Working in these organizations can be just as frustrating. Another national poll found that 96% of employees want more flexibility and control over their time and that 73% are willing to curtail their careers in favor of more family time. How much more might consumers spend if they trusted business? How much more could employees contribute without so much stress and resentment? These responses reflect the collapse of an entire business model.

There's a centuries-old pattern here: a business model hits its stride, only to be overtaken by rigidity, resistance to change, and vested interests. Its wealth- creating power and zest for innovation go into decline, and everyone is left to fight over a shrinking pie. But society continues to evolve. People move on, taking a marketplace of new needs with them. They leave the old organizations behind, across a growing chasm.

Fortunately, capitalism is a renewable resource. New business models are invented that connect with new people and release the economic value concealed in their unmet needs. This ignites new wealth creation and sets the stage for another chapter of capitalism.

This is exactly where we are today—at the end of one chapter, waiting for the next to be written. A chasm of outrage and mistrust separates people and organizations. Companies are rooted in an inward-focused business logic invented a century ago to mass-manufacture goods for mass consumers. That logic emphasizes concentration, command and control, cost, and efficiency. This "managerial capitalism" was successful for decades, because people wanted exactly what it could give them: cheap goods. The epic wealth creation during the first half of the 20th century derived from this state of grace.

Ironically, this wealth produced a new breed of people. Our own experience as unique individuals leaves us insistent on self-determination. More educated, more informed, and more connected than any previous generations, we stare back across the chasm. As consumers, we are not content to be anonymous members of the masses, so grateful for toasters and mortgages that we cheerfully acquiesce to com-pany dictates. As employees, we are tired of stuffing our unique lives into the simplistic career structures of most organizations. We want more than just goods and services, paychecks and promotions. We want support in living our increasingly complex lives as we choose. These new desires pave the way to a new economy built upon providing the individualized advocacy and assistance we require in every aspect of consumption: a "support economy."

In fact, today's outrage is a vast canvas of opportunity. The old capitalism had its day. Now we share a historic challenge to reinvent commerce for our times. This column is intended as a contribution to that process. In it, I will explore the ripening conditions for reinvention. It's a conversation that will take us beyond the 20th century's emphasis on "concentration" toward an emerging business model that builds on the "distributed" social realities and technologies of our times. Share your thoughts with me, and join the conversation. The stakes could not be higher, as measured in potential wealth creation and quality of life. Just ask the distrustful, the resentful, the stressed majority. They stand ready with their cash, skill, and commitment, hungry for a new business model worthy of their lives. That hunger is a call to action—the most urgent business imperative we face.

Shoshana Zuboff (zuboff_maxmin@thesupporteconomy.com) is a professor at Harvard Business School and the coauthor of The Support Economy (Viking, 2002).

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