The Context for Change
Let's start by acknowledging that business writ large has done the most good, for the most people, in the history of humankind. But at the same time, let's also acknowledge that the way business has been practiced—and rewarded—for the last 40 years isn't the same as it was the 40 years prior. Or the 40 years before that.
Our current economic condition is the result of forces: global population growth, waves of innovation, shifting geopolitical dynamics—that have outpaced the frameworks we built in a different era.
Economic Paradigms Through Time
Business success was measured by multiple stakeholders: employees, communities, long-term sustainability, and profitability. Companies were deeply embedded in their local communities and saw themselves as responsible to a broader set of interests.
The shareholder primacy model emerged, prioritizing short-term returns and stock price above all else. This shift externalized many costs onto workers, communities, and the environment. The dominant narrative centered on maximizing shareholder value and cutting taxes, expecting that the benefits would trickle down.
We're at an inflection point. The data tells a different story than the trickle-down narrative: widening income disparities, financial stress for the majority, and an environment in distress. 41% of Americans don't earn enough to survive without government benefits. The system is "unfreezing," creating an opportunity for transformation.
Why Change is Possible Now
We are living through profound technological, economic, political, and social shifts. These disruptions make transformation not just necessary but indeed possible.
Technological Disruption
AI and automation are rapidly accelerating, reshaping millions of jobs—or eliminating them entirely. The system we've relied on may no longer be equipped to meet the needs of the people who make it work.
Environmental Crisis
A mounting climate crisis adds urgency to this challenge. Business practices that externalize environmental costs are no longer sustainable—for the planet or for business itself.
Social & Political Shifts
Growing inequality, financial stress for the majority, and social instability are creating unprecedented pressures. People are looking for new models that work for everyone.
Systems theory tells us that massive destabilization is exactly when meaningful change becomes possible—a system must first "unfreeze" before it can be transformed.
The Role of Privately Held Companies
Privately held companies, especially those not subject to the short-term expectations of shareholders, are uniquely positioned to lead this transformation. 80% of all new jobs are created by privately owned businesses—that's no coincidence. This group represents a powerful engine for change.
- Know their people: These leaders know their employees and communities intimately
- Freedom to act: Can make long-term decisions without quarterly earnings pressure
- Embedded in communities: Connected to the places where change needs to happen
- Creative problem-solvers: Have creatively solved myriad problems in running their businesses
- Flexibility to experiment: Can test new models of value creation that public companies cannot
If It Hasn't Always Been This Way...
If something hasn't "always been this way," it doesn't have to always stay this way.
History shows that capitalism can evolve. It has before, and it must again.
The question isn't whether change is needed. It's whether we, as business leaders, will step forward to help lead it.