28th May:

Unfettered capitalism is surely a bad thing.

I was watching a documentary on the TV the other week about how changes in technology have killed off companies and yet other companies have managed to exploit these changes and thrive. One example quoted was Polaroid - a once great (and highly profitable) institution that went the way of the dodo in a few short years thanks to the rapid introduction and uptake of digital photography. This made me realise that no company (or certainly very few) can survive by doing the same thing in the same way for very long.

Most private sector companies have shareholders that need to be satisfied through profit and growth. In order to keep the shareholders happy, companies have to keep growing and expanding. Witness, for example, the appalling mess of the energy market currently, with key players like British Gas having to stretch their brands to fairly outrageous lengths and enter new, allegedly complementary product and service categories in order to (you guessed it) keep growing and keep satisfying the shareholders. This wouldn't be quite so bad if these companies ploughed some of the profits back into charitable ventures but most of these organisations have a Corporate Social Responsibility policy that acts as a PR tool to suggest that they are good corporate citizens and also to wring the maximum tax-deductible benefit from any charitable giving - it never feels like these policies are based on any moral or ethical platform and are instead a thin veneer designed entirely to keep up appearances.

So, to the central tenet of my rambling: how much profit is ever enough? Are companies genetically programmed or destined to go through cycles of famine and feast before either ending up like Polaroid (i.e. bust), Microsoft (dominant) or RBS (bailed out by the public)? Call it rampant naivety on my part if you wish, but business in the private sector is not, cannot and should not ever just be about profit. There has to be something more in terms of nourishment. Wealth creation is no bad thing in itself, of course, but history shows that the Board of Directors tend to looks after themselves very well, thank you, while the rest of us tend to be the first casualties when the storms start to brew.

In the 21st Century, why are there so few organisations based on principles of fairness, equality, partnership and respect? Why shouldn't the private sector contribute more readily to the betterment of society? Every company, like the people it employs, is mortal. Perhaps the people running our largest organisations would do well to consider this mortality and ask themselves what they should do with the time they have left and how they would like to be remembered...