The challenge we have at the moment is to move from innovation being a key issue in some organizations and for some governments to an overall innovative economy. Will the current economic crisis be the catalytic factor that will take us there? Will we be able to draw the necessary conclusions and change some of the basic assumptions of our economic system?
At this moment we witness the results of the fundamental flaw in the shareholder orientation in our economy. The focus on short term results for shareholders has led to many of the problems we see at this moment. Greed, short term thinking and lack of nerve being the key words. And one thing we know is that these are not the qualities needed for innovation.
The focus should shift to stakeholders, not shareholders alone. The most important stakeholders being people that work for the organization, society as a whole and those who provide the capital. In this vision managing the satisfaction of all stakeholders (not just one) should be the main goal of organizations. Bering focussed on stakeholders will nurture human capital, assumes long term strategies and taking risks that are necessary for the sustainability of the organization and its environment and therefore is supportive of innovation.
For innovative organizations (being profit, non-profit or governmental) the most important stakeholders are the people working there, the talent that will help to be competitive and innovative. The networks we use for innovation and Web 2.0 are after all manned by the people that work for our organizations. Without them they don’t exist. Michael Yaziji (in the November HBR) even states that they are so important they should get the bulk of the revenues instead of shareholders. Even if we don’t adhere to this specific point of view, what is happening at the moment is the opposite. A recent Dutch survey showed that 17% of employees is thinking about leaving their job within a year because of the organizational culture, not being recognized for the work they do and the feeling that their employer doesn’t value them. So focussing on the employees as important stakeholders, and taking care of their needs, is essential of we want to keep our main innovative force. This at least requires trust, recognition of their contribution and open communication.
That society as a whole also needs long term investment and vision is obvious. Sustainability is the key word here. And yes, we do need capital, and capital should be rewarded, but the reward of capital should not be the sole concern of organizations. Sustainability, long tern results and the nurture of human capital are at least as important and need to be revalued.
So lets change. Governments can help by giving companies back the right to protect themselves against unwanted attacks, by developing rules and regulations that are supportive of stakeholder oriented companies with a long term strategy, by restructuring the banking system and by creating measures that support R&D, the valuation of human capital. I am sure many great suggestions can be found in this book.