The global economic crisis is a wakeup call to the world: we need to rethink and rebuild many of the organizations and institutions that have served us well for decades, but now have come to the end of their life cycle. The financial services industry, for example, does not just need fresh infusion of capital or some new regulations; it needs a whole new operating model — one based on transparency, sharing of intellectual property and global governance.
As the crisis has spread to other sectors in the economy and even other sectors of society, it is exposing structural weaknesses and modes of operation that no longer nurture social and economic growth. The recent collapse of many newspapers is just one storm-warning of more to come: conventional wisdom isn’t going to cut it for success in this century. We need to reinvent our institutions.
Another example: We face no challenge today that is more important than creating a green energy grid and reindustrializing the planet for sustainability. And for the first time in human history, the peoples of the world are building a global movement to solve this problem — a movement in which everyone is on the same side.
So while the burning of the global economic platform is propelling change, simultaneously the digital revolution is driving new opportunities and a new generation of digital natives is entering the workforce, people who think differently and bring a new and much-needed set of skills to our problems.
What’s really different about the world today is the fact that we’re much more interconnected. And when we’re more interconnected, we’re more interdependent.
And so the question is, in this radically interdependent world, how do we have to behave to create real value, to create authentic value. Because until we can answer that question, we’re going to see the crisis that we’ve got today, actually intensify. What it really is a kind of a crisis in the way that our organizations behave. So what that means is, we see across industries this pattern of kind of self-defeating, or self-destructive, or value-destructive behaviour, because they don’t know how to do, how to behave any other way.
And we don’t seem to be able to overcome that pattern; and so until we can overcome that pattern, I think that the crisis that we see today, even if we bail ourselves out of it, by bailing out the banks, by bailing out the automakers, the crisis will keep on repeating itself, across industries; it will keep on going on until we answer that problem, of very very self-destructing behavior; and so they’re kind of zombies.
They know that they have to behave differently to create real value, but they don’t know how to do that, because they haven’t been organized and built in a way to do it.
It’s kind of in their very DNA, because the question is not one of strategy, not one of competition but one of institutions. And unless you realize that institutions are what you have to change, you wind up as kind of as a zombie.
Why do we see these patterns of destructive behavior going on? I think the reason is actually very simple: capitalism in the way we built it today kind of undercounts costs and overcounts benefits. Many of the costs that we’re now becoming more and more familiar with – social costs, environmental costs, human costs, the costs of unfairness – and it overcounts benefits, that’s kind of a structural flaw, the heart of the way that we built capitalism itself. And what that translates into is that we see this pattern of behavior of where I strive to make myself better off but I’m indifferent to whether you are better off. And if I can do that, then the result is very, very small amounts of real value that are being created, and today we’re facing that fact.
The way that we should think about it in the 21st century is that we create the world through out action and through our behavior.
So the world is kind of a function of what we do. And when we act in one way, we create one kind of industry, one kind of environment, one kind of world; and when we act in another way, we can create a very different kind of environment, or industry, or world. And so I think the question of “how do we respond to the world”, we have to think about the fact that we are responsible for the actions that we take, because those actions then go on to create the kind of world that then comes back to effect us. And so the challenge in the 21st century is learning to create authentic value, real value.
So my question would be is how many of your innovations are really not innovations, how many are really unnovations.
So I think the most important question companies can ask themselves today is are we innovating, or are we doing exactly the opposite? Is what we are doing really an improvement?
Do flaws in our monetary system consistently cause financial crises?
So far, critical questions concerning our monetary system and the financial crisis have been underexposed.
The new film ‘A Flaw in the Monetary System?’ depicts in 7 ½ minutes consequences of interest and compound interest in the financial world in descriptive graphics. It illustrates the
systematic redistribution of money from the majority to the wealthy.