Markets (do) have hearts...
What is the difference between a profit and a non-profit organization? Peter Drucker pointed out way back in 1994 that non-profit organizations were - in the US at least - organizations that don't pay taxes.
Thats it. From an actually profit-making perspective, they were exactly the same as any otherfor-profit organization!
However, in our lexicon, we tend to have a vision of non-profits as implying "Activists", and for-profits as implying "Capitalists", i.e., organizations and people focused on social outcomes as compared to economic (market) outcomes. However, as Facebook, Twitter and the FOSS movement have shown, social interactions and their associated outcomes can have a profound effect on market activity, a paradigm changing one at that.
An article in the Paris Tech Review asks the question
(As a side note, it should be pointed out that this doesn't just refer to the "tech" world. In "The Strategies for the Bottom of the Pyramid", Prahalad and Hart point out that there is a huge untapped market at the bottom of the pyramid (Billions of people!), and through the law of large numbers, strategies that can provide them with basic services can be used to generate enormous revenues, thus simultaneously having an "activist" and "capitalist" role. The point, however, is that tapping this market implies a fusion of these same activist and capitalist natures.
This actually brings out a deeper point, that while markets may be faceless, markets consist of companies, companies consist of humans, and humans do have feelings, hope, love, faith, and all the other attributes of the human condition. As such, forcing companies to operate as nameless faceless entities actually runs counter to the intrinsic nature of said companies
To elaborate, by allowing people to interact and function naturally, we can reduce friction and increase efficiency. This actually refers to far more than the realization that a person working on a production line mindlessly repeating the same action over and over again is not very motivated, and can slip up. Behavioral economics has shown that social cues and motivations can actually make people operate above what you would normally consider peak efficiency - You would do far more for a friend in need than for your thankless job swabbing the floors at Widgets Inc.
The question then is - how do you measure (and manage) social motivation, and the resultant innovation? We don't have the tools to do it, to assign value to them, to manage them, and to not stifle them. The problem is that the entire language of social innovation is "soft" in nature, the type that tends to inspire contempt in vast swathes of the business community. Yet the self-same swathes would be the first ones to admit that these interactions and motivations are important in society, but should be "private" to the individual, an artificial distinction at best. The private, public, and corporate lives of a person are in the end all intermingled, and as mentioned earlier, when they are at odds, they cause friction.
There are training programs and projects that are - very slowly and tentatively - starting to work at breaking down these barriers. The approach tends to be "macro" in nature, i.e., working from the big to the small. For example, at HEC Paris, the Alternative Management Major is focused on fusing management models from the corporate and NGO worlds.
These may all seem touchy-feely, with an earnest desire to have us all sit around the campfire singing Kumbaya, but in many ways that is the point. There are dramatic lessons that can be learned from the world of social activism - lessons on motivation, organizational structure, and the like - which can be of tremendous value in the traditional corporate world, and vice-versa. The key is to get past our prejudices in these areas, and take a fresh look at the lessons that can be learned from each.
Thats it. From an actually profit-making perspective, they were exactly the same as any otherfor-profit organization!
An article in the Paris Tech Review asks the question
What happens with such a differentiation if the creation of social ties is to become the core for new economic activities?
This actually brings out a deeper point, that while markets may be faceless, markets consist of companies, companies consist of humans, and humans do have feelings, hope, love, faith, and all the other attributes of the human condition. As such, forcing companies to operate as nameless faceless entities actually runs counter to the intrinsic nature of said companies
The question then is - how do you measure (and manage) social motivation, and the resultant innovation? We don't have the tools to do it, to assign value to them, to manage them, and to not stifle them. The problem is that the entire language of social innovation is "soft" in nature, the type that tends to inspire contempt in vast swathes of the business community. Yet the self-same swathes would be the first ones to admit that these interactions and motivations are important in society, but should be "private" to the individual, an artificial distinction at best. The private, public, and corporate lives of a person are in the end all intermingled, and as mentioned earlier, when they are at odds, they cause friction.
There are training programs and projects that are - very slowly and tentatively - starting to work at breaking down these barriers. The approach tends to be "macro" in nature, i.e., working from the big to the small. For example, at HEC Paris, the Alternative Management Major is focused on fusing management models from the corporate and NGO worlds.
These may all seem touchy-feely, with an earnest desire to have us all sit around the campfire singing Kumbaya, but in many ways that is the point. There are dramatic lessons that can be learned from the world of social activism - lessons on motivation, organizational structure, and the like - which can be of tremendous value in the traditional corporate world, and vice-versa. The key is to get past our prejudices in these areas, and take a fresh look at the lessons that can be learned from each.
Comments