Jun 4 2008

Shaking The Invisible Hand

Categories: Corporate Culture | Entrepreneurialism

Posted by Paul Orfalea at 8:21 AM
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A friend recently called me a “capitalist pig.” Well, as Oscar Wilde observed, “a friend is someone who stabs you in the front.” She was joking, but the term is so common it got me thinking about capitalism’s PR problem.

A retailer in a university town once told me, “It’s hard enough to teach new coworkers about our services, but it’s harder when I have to convert them to capitalism first.” I view Adam Smith’s “invisible hand” as one that beckons with incentives, but some others view it as an iron fist wielding money like a brutish club. The latter certainly give capitalism a bad name, but embarrassed capitalists also cause harm. These are the leaders and managers ashamed to admit they want to make money.

Embarrassed capitalists operate in an aura of deceit. They try to hide important and perfectly just motives under grandiose mission statements and internal marketing campaigns. In doing so, they disrespect their coworkers’ intelligence. Profit is the most important goal of any for-profit organization, and should not be marginalized. Rather, profit should be celebrated as the means for achieving every other goal sought by the organization and its coworkers and customers.

Why do so many people try to obscure the profit motive, as if it were incompatible with people achieving more personal aspirations? Some former coworkers raised the question while telling me about their favorite supervisor. Said one, “On my first day, and at every performance appraisal, he gave a speech about making sure the company and I were serving each other’s goals. Whether or not your long-term goals included the company, he was very clear: you help us reach our goals, and we’ll help you reach yours. But he didn’t just talk about it; we built it into the job and held each other accountable.”

That manager understood that good leaders create environments where people’s interests are aligned, making day-to-day management downright easy. Most people manage themselves just fine when it’s clear where everyone is supposed to be going.

I have never been shy about my interest in money; I am a money enthusiast. But the best way to make a lot of money is to help people – coworkers and customers – get things they need and want. I learned from experience that kissing coworkers’ hands made me more money than slapping them, and that’s why I’m such a strong proponent of generous profit sharing. Iron fist capitalists see profit distributed to coworkers as money left on the table. They believe that if they can take it, it is rightfully theirs. This is shortsighted and counter productive.

And that’s why so many workers deride capitalism itself. Their personal experience suggests the invisible hand is less than benign. As one humorist put it, “Some see the hand everywhere they look; others see only one finger.” Profit sharing makes the invisible hand visible and welcoming, and serves capitalism well.

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