Americans seems stuck in a high-conflict mode, as best seen in the heated clashes between the Obama Presidency and the Republicans. Liberals can be difficult, certainly, but William Kristol advised conservatives to “find reasons to obstruct and delay,” “raise doubts,” and “try in any way possible to break Obama’s momentum.”
Whereas a crucial shift from a culture of conflict to one of cooperation could do wonders for reviving today’s morbid economy. It could even raise the possibility of turning this mess that American Capitalism inflicted on the world into a bold new opportunity.
Consider for a moment a little thought experiment in which we entertain the sheer possibility that President Obama could fulfill his grand mission of achieving collaboration between Left and Right. Leaving aside the overwhelming obstacles, what could be accomplished if we could unite the Republican ideal of creative free enterprise with the Democratic ideal of supportive social community?
Yes, it may seem a fantasy, but trends among progressive American corporations are moving in that very direction. The leading edge is building a collaborative form of free enterprise that offers a more productive, transparent, and accountable form of market system. Some examples:
- Whole Foods organizes small teams to manage themselves, including hiring co-workers and selecting products to carry. Teams earn performance-based bonuses, while the CEO is happy earning a paltry 14 multiples of employee pay. The company’s stock multiplied 25 times under a philosophy that holds – “Profits are a by-product of treating people well, not the top priority.”
- Nucor is America’s most successful steel firm because of each mill team builds a cohesive culture based on performance and collaboration. Top workers earn three times the industry average, and the CEO said: “Our culture outperforms anything.”
- Johnson & Johnson has grown a robust 15% each year for 120 years by requiring each of its 80 small businesses to be self-managed, including having their own governing board, and by focusing on the needs of doctors, nurses, and patients.
- Best Buy moved to a “results only” system that allows employees to choose when, where, and how they work as long as they produce.
- Google uses teams to manage each project as a small internal venture, while the Company serves as an internal venture capital firm placing bets on the best projects.
These advantages could move into the mainstream, but America’s culture of conflict obscures our vision to the enormous possibilities. Talk shows hosts invariably pit one adversary against another, so little wonder our airwaves are filled with opposing views and bitter arguments. Why can’t media figures act as facilitators who try occasionally to reconcile conflicting positions?
A blatant example is the popularity of Donald Trump’s TV show, The Apprentice, which glorifies the harsh conflicts Mr. Trump believes endemic to business. Whereas savvy business managers in the examples above cultivate the benefits of “co-opetition” – collaborating with partners as well as competitors to ensure better results for all.
As usual, the public is way ahead of politicians. Polls show more than 80 percent of Americans think political conflict has become dysfunctional and that we need to unite the country. And if President Obama hopes to pass legislation solving festering problems in health care, energy, social security, and immigration, some form of cooperation and coordination will be badly needed. It would be ideal to engage in collaborative problem solving to find new solutions.
Contrary to the past 30 years of Reaganomics that fostered a belief in harsh competition for limited riches by the wealthy few, the fact is that cooperation has always been a productive aspect of life. Scientists consider cooperation the third major force in evolution. The first two we hear most about – random mutations that produce genetic diversity and natural selection of the most fit – are intimately augmented by cooperation among humans, animals, and even plants to favor the odds of survival.
And cooperation is becoming more crucial in today’s knowledge economy. Unlike an industrial economy in which limited physical resources foster conflict, knowledge increases when shared, producing gains for all parties. Ray Smith, the late CEO of Bell Atlantic, called it the “loaves and fishes principle of knowledge.” That’s why strategic alliances have been the hottest trend in business for many years now.
Other nations have been doing this for years. Sweden, Finland, Germany, Canada, Japan, and other productive societies avoided much of the pain we are experiencing in this economic collapse because of cooperative cultures, labor leaders on corporate boards, sound regulations, business-government partnerships, and safety nets for their citizens. The irony is that America holds the original claim on cooperation because we invented modern democracy – yet we have allowed our fetish for laissez-faire capitalism to create a horrible tension between Left and Right that is tearing this nation apart.
Organization theory and practice now routinely acknowledge that modern corporations are socio-economic systems consisting of five major stakeholders that are all essential to success: investors, employees, customers, partners, and the public. One of our graduate students noted that this raises the thought of depicting the modern business firm as a five-pointed star. What better symbol could Americans find to initiate a badly needed economic revolution? Imagine what we could do by redefining business as a democratic enterprise that unifies the interests of capital with those of other constituencies to achieve social, environmental and economic sustainability?
Just as this nation founded the concept of democracy in the crisis of revolution, today’s crisis asks that we draw on our unique heritage to give the world a new economic system that finally resolves the clash between Capitalism and Democracy. But until Americans find a way to develop the social systems, leaders, and political will to change today’s culture of conflict, this perfectly realistic vision will remain a wishful fantasy.
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William E. Halal (Halal@gwu.edu) and Elias Carayannis (caraye@gwu.edu) are professors at the George Washington University School of Business. Halal’s recent book is Technology’s Promise: Expert Knowledge on the Transformation of Business and Society (Palgrave Macmillan, 2008) and Carayannis’s recent book is Diversity in the Knowledge Economy and Society: Heterogeneity, Innovation and Entrepreneurship (Edward Elgar, May 2008).
