Death of the Old Business Paradigm

The business of business is business. This has been the major premise on which the leaders of the business world have operated for at least the past century. They have not been concerned primarily with the overall welfare of individuals, human institutions or our environment.

The Wall Street shakeout, and the failure of large corporations have clearly shown that the old business paradigm is no longer viable in today's interconnected and mutually influential world. And most people, according to multiple surveys, have lost faith in the captains of industry and their political representatives.

Capitalistic societies have begun an evolutionary transformation of who we re, what we value, and how we behave; one that requires social and environmental responsibility, in which business leaders must actively participate. The transformation requires a business model that focuses on more than the single motive of the bottom line--one that looks at the wealth creation that pursues personal, social and ecological gains to financial results.

Even the metaphors used to characterize business are out of touch with reality. "It's a jungle out there," is one of the most popular metaphors, in which business is viewed as the survival of the fittest. "Kill or be killed," is closely related to this, one that compares business to war and the marketplace to the battlefield. Leaders also refer to business as being a "money-making machine," a metaphor that transforms enterprises into something cold and mechanical, dehumanizing us. Yet, the health of organizations requires co-operation, and collaboration, and a focus on people as the greatest asset.

Plenty has been said about businesses having a triple bottom line--shareholder profit, social responsibility (both internal and external) and environmental sustainability--but few leaders and boards systematically practice this. The U.S. brand of capitalism, driven by the financial sector, and focusing on greed and the egos of chief executives, has clearly failed.

The business world is fundamentally a community of people working together to create value for everyone in society. The pursuit by leaders of corporate and individual self-interest is a paradigm that has outlived its usefulness. It's time to create a new paradigm of responsible capitalism.

The new sciences show us that the world we live in is interconnected, collaborative, participatory and creative. That means business will have to find new metaphors to describe business ecosystems as being cooperative AND competitive.

The economy isn't detached from society or the natural environment. It is up to business leaders and their companies to provide goods and services for a dignified life for all. They will also be called upon to provide opportunities for fulfilling work and use resources at a sustainable rate.