What has ‘ Good Capitalism’ to do with ‘Good Leadership’?

It was good to hear Will Hutton speak recently about ‘good capitalism’ as part of his scathing analysis of our economic prospects. He highlighted ten qualities of bad capitalism as opposed to good:

  • “Unproductive entrepreneurship vs. productive entrepreneurship
  • Incumbent vs. insurgent
  • Darwinian vs. collaborative
  • Finance sole priority vs. business purpose- balanced score card
  • Transactional surpluses vs. high trust workplace
  • Rent- seeking managers vs. proportionally rewarded managers
  • Close access vs. open access
  • Opaque vs. transparent
  • State capture vs. minimal state
  • Political capture vs. democratic process with

Good capitalism is dependent on a shared value system underpinned by fairness, due desert and proportionality”.

Hutton’s compelling presentation caused me to reflect on good leadership. It seems to me that good leadership is based on ensuring that this value system is enacted in practice. I am fortunate to work with enterprising leaders that ‘get this’, and are working to reward creative, committed and talented staff in a fair way that reflects their contribution to the enterprise.

The following story, though, reminded me that good leaders do not assume that the values are equally held within the organisations that they proudly run. It was a plumbing not a banking story that brought this home to me with a bang.

“Pimlico Plumbers leaked everyone’s salary Surprise, jealousy, unrest and motivation 
as staff reveal wages for Channel 4 show”

The owner of this London enterprise took the ‘revolutionary’ step of asking staff to tell each other what they earn. The person most uncomfortable with this process was the personnel director. A combination of peer pressure and the TV cameras resulted in him handing over £1000 a year of his salary to a junior woman colleague earning £18,000 and his boss did the same. All populist stuff, but he allegedly said:

“I was surprised by discrepancies between staff doing similar jobs, with similar skills.”

I rest my case! A transparent and high trust workplace does not just happen. Busy leaders have to keep checking that they have buy- in; especially from the people they are trusting to implement a fair process.

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