United Kingdom

Transforming Capitalism from Within launches

By Vincent Neate, Head of KPMG’s UK Climate Change & Sustainability practice

In December 2013 we were honoured to host the launch of Transforming Capitalism from Within, a call for responsible capitalism by Michael Schluter, Chairman of Relational Research Limited and Jonathan Rushworth, retired partner at law firm Slaughter & May.

We arranged the London launch alongside Tony Manwaring of the think tank Tomorrow’s Company. Banking, investment, corporate and non-government community representatives attended.

Why this event?

So why did we chose to host this particular event? Many initiatives today call for a more responsible approach to capitalism – is this one really so different or worthy of attention? The answer is an unequivocal ’yes’.

I am lucky to attend a very great number of business meetings about what to do to put capitalism and corporate responsibility back on track, with organisers as diverse as CNBC Television or Business in the Community (BITC). Some are general, some are specific, and all are well intentioned, but few are as clear in their call to action as Transforming Capitalism from Within.

That call is to privilege relationship. What you choose to privilege is essentially that which you put at the heart of all decision making.

Values

In the 90s we privileged ‘values’. This had huge benefits. By publicly declaring the intangibles they wanted to determine behaviours and that they would use to evaluate performance, business leaders created something hugely powerful.

But it had three fundamental flaws:

  • It was not resilient
  • It did not improve productivity
  • It did not have any predictive qualities

You can’t have no values and I would never say that business should abandon talking about and committing to a core set of them. But values and purpose and ethics are all human conceptual constructs of language.

Now we must deal with this and I would assert that whatever we choose to privilege next must as a minimum absolutely deal with these three challenges. And the thing that does this is not a conceptual construct of language but a necessary feature of human systemic existence – relationship.

Relationship as systemic feature

In any system, the point of failure is always where the system relies on a component that has reached the limits of its flexibility. In any system, the system’s productivity as a whole is always determined by the productive capacity of the most important component at that point in time and space. Our ability to predict how a system will react and behave depends on the quality of the knowledge loops that inform our observations.

In all human systems, the elastic that creates this flexibility is relationship. The productive capacity of any one component is contributed through relationship with other components. It is through relationship that we create the knowledge loops that inform not just our observations but our decisions and thereby give us some insight into how our organisation will respond and behave.

I therefore strongly recommend that we privilege relationship.

Amazing benefits

There are amazing benefits to privileging relationship, an approach that has a place in all great world religions and in the existentialist humanist tradition. If there is one thing I can defend metaphysically, epistemologically, rationally, ethically and emotionally, it is that I sink into bad faith when I treat an ’other‘ as a means to my ends.

To treat a human being as an end in their own right – that is what it means to have a relationship with them.

If we can embed that in capitalism, we will truly have transformed it from within.

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