Episode #45 – Embrace the Hyper-Entrepreneurial Era: Creating Innovations to Serve Customers’ Needs (Working On Purpose Podcast Repost)

This episode is a repost from The Working On Purpose Podcast

Capitalism comes in for criticism, despite the fact that this economic system has resulted in substantially increasing global per capita income over the centuries, spurring economic growth and progress. 

Critics often criticize a kind of Aberrant Capitalism, one that is dominated in their minds by corporations, whose behavior is not always meritorious. 

But from the earliest times, it was Customer Capitalism, not corporate capitalism, that was the driver of individual prosperity and thriving. Companies such as Wedgwood & Bentley of Wedgwood China fame (founded 1759) set the original precedents by prioritizing customer needs and innovation, laying the foundation for contemporary business practices. The advent of these corporations facilitated large-scale entrepreneurship, promoting innovation and efficient responses to customer demands.

Entropy has set into the capitalist system since the founding days, and there is some corporate behavior that needs reform. Dr. Alise Cortez is attentive to these concerns. We discussed the prospects for a revival of customer capitalism

Resources: 

Connect with Hunter Hastings on LinkedIn

Connect with Dr. Alise Cortez on LinkedIn

The Value Creators Website

Hunter Hasting’s Blog

Dr. Alise Cortez’s websites:

 Gusto-Now.com & AliseCortez.com

Show Notes:

0:00 | Intro
3:25 | Capitalism: Bad Rap and the Purpose 
08:07 | Standard Oil’s Impact on Civilization
09:52 | World War: Capitalism in the Next Era
14:20 | The Post-War Capitalism: Command and Control
19:50 | Period of Financialization 
21:05 | Maximising Shareholder Value 
22:14 | Government as the Customer 
25:35 | The Promise of Customer Capitalism 
28:30 | Current Landscape of Customer Capitalism 
33:03 | Management Practices of Forward-Thinking Companies: Extremely Flat Organization
35:33 | Cross-Functional Teams 
37:45 | Short-Term Problem Solving vs. Long-Term Planning 
39:50 | Long-Term Stock Exchanges: Role and Contribution
40:30 | AI and Middle Management
42:24 | Principles Over Rules 
43:40 | Customer-Centric Business Models 
45:13 | Idea of Subjective Value and Empathy
48:37 | Wrap – Up

Knowledge Capsule

Historical Role of Capitalism

• Capitalism has been instrumental in significantly improving global per capita income over the past centuries, driving economic growth and development.
• Companies like the Wedgwood Company set examples by focusing on customer needs and innovation, paving the way for modern business practices.
• The introduction of these corporations enabled large-scale entrepreneurship, fostering innovation and effective response to customer demands.

The Golden Age of Capitalism

• This era was marked by leaders who prioritized innovation and customer satisfaction, driving significant advancements in various sectors.
• Businesses aim to create substantial value for customers, leading to societal progress and improved quality of life.

Transition to Managerialism

• Post-World War I, the shift from entrepreneurial leadership to managerialism led to a bureaucratic approach, emphasizing efficiency and cost control over innovation.
• This change resulted in slower decision-making processes and hindered communication within organizations, affecting their agility and responsiveness.

Financialization of the Economy

• The latter half of the 20th century saw a focus on short-term financial gains, often at the expense of long-term customer satisfaction and innovation.
• This shift negatively impacted customer-centric business models, reducing the emphasis on meeting customer needs.

Corporate-Government Entanglement

• Companies increasingly diverted resources to influence government policies, prioritizing government contracts and compliance over genuine customer engagement.
• Large corporations shaped regulations to favor their interests, often disadvantaging smaller, innovative companies.

Customer Sovereignty and Digital Technologies

• There is hope for a resurgence of customer-focused business models, emphasizing long-term customer value and well-being over short-term financial gains.
• Digital technologies enable direct customer feedback, allowing businesses to adapt quickly to customer needs and preferences.

Flat Organizational Structures

• Flat structures improve decision-making speed and communication within organizations, allowing for more dynamic and responsive leadership.
• Leadership is based on expertise rather than rigid titles, fostering a more flexible and effective organizational environment.

Cross-Functional Teams

• Teams are formed based on project needs, promoting collaboration and adaptability, and eliminating traditional job descriptions.
• This approach encourages a culture of mutual agreement and flexibility among team members.

Long-Term Value Creation

• A focus on long-term value creation supports sustainable growth and innovation, moving away from the short-sightedness of quarterly earnings.
• Investors are encouraged to support companies with a long-term vision rather than demanding immediate returns.

Role of Artificial Intelligence

• AI can replace middle management, providing real-time insights into employee actions and improving operational efficiency.
• AI and humans can work together in a collaborative environment to achieve corporate goals more effectively.

Empathy as a Trainable Skill

• Empathy is crucial for understanding customer motivations and delivering genuine value, and it can be developed as a trainable skill.
• Developing empathy improves customer relationships and enhances business success.

First Principles Over Rigid Rules

• A principles-based approach fosters innovation and adaptability within organizations, proving more effective than rigid rules.
• Emphasizing first principles helps organizations thrive in dynamic and changing environments.

Reviving Customer Capitalism and Purpose-Driven Work

• Businesses are encouraged to prioritize customer value and well-being, fostering a more meaningful impact on society.
• Embracing flat structures, cross-functional teams, and long-term value creation is essential for future business success.
• These elements are crucial for understanding customer needs and driving innovation in the evolving landscape of capitalism.