‘Living-room leadership’ is the spark that lights the way to
a re-establishment of trust in business. Brands committing
to a mission that uses their resources to help solve serious
issues deserve to win trust.
World War II created a schism in trust that reverberated across the world
and dictated the landscape until the end of the Cold War. Swarthmore
psychologist and author of The Paradox of Choice Barry Schwartz (2005)
says, ‘the secret to happiness is . . . low expectations.’ World War II painfully
and tragically reset expectations and set them low.
The brightness of the ideals and innovation that eventually came in the
1950s emerged from the darkness of a previous decade where 70 million
people perished. The Welfare State in Britain, the realignment of interests
in Europe and Asia, industrial and domestic innovation in the USA, were
great achievements, giving the world a fundamentally more positive and
stable outlook. Standards of living improved in an economy powered by
consumption and it felt good. There was even the visceral comparison
with communism to show just how well capitalism was doing. The baby
boomer generation and its children grew up in a world of seemingly
endless resources and possibilities.
Despite the inevitable booms and busts, the industrial unrest of the 1970s and
the individualism of the 1980s, these post-war decades were times when the
global order seemed set and the stable path to prosperity and growth was
never-ending. Trust and hope for the future was high. Of course there were
incidents of low trust, impeached presidents, global crises, wars, business
collapses, but, fundamentally, the system didn’t need to be questioned.
The world is dierent now. We live in a system and world that looks and
feels unsure of itself and this is unsettling. The ‘matrix’ that we created
150 WHY SHOULD ANYONE BUY FROM YOU?
to support a high-growth, high-consumption
economic model is crumbling. The twenty-rst
century has started with more questions than
The twentieth century saw America becoming
the global superpower, with economic and
cultural dominance. We now look to the South
and East, with their very dierent cultural and economic models. These
fast-growing economies see the direct benets of employment, increasing
quality, prosperity coming from the rise of commerce, while, in the West,
most people don’t remember why we need to encourage business and
why we create markets to support these enterprises.
Business in the West is seen as for the scoundrels, the fat cats, those
looking to feather their own nests. Rather than being a source of equality
and rising standards of living for all, business is now seen as a source
of inequality. Bankers, as the top ‘predators’ in this system, blindly and
conspicuously continue to dole out millions to their sta in bonuses,
which reinforces this perception.
Business has become unbalanced. Stakeholders have been forgotten in
deference to the almighty shareholder. Nothing has been more important
for the leadership of businesses over the past 30 years than an almost
maniacal focus on the markets and their short-term demands. These
demands and those of institutional or short-term shareholders, such
as hedge funds, allow great businesses rich in social capital and trust
to be sold to the highest bidder. Britain with its commitment to free
markets without trade restrictions, now has virtually none of the brands
or businesses that made it great. Cadbury sold
to Kraft, Wedgwood in the hands of private
equity rm KPS Capital Partners of New
York or Tomkins, the global engineering and
manufacturing company founded in 1925 now
owned by Onex, the Canadian private equity
rm, are just a few examples. Stakeholders,
the ‘matrix’ that
we created to
support a high-
Britain . . . now
none of the
made it great
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