Business collaboration could transform the economy
America's obsession with narrow, short-term self-interest has produced a moral crisis. "Collaborative enterprises" such as Whole Foods and Nucor show that cooperation can be profitable for everyone.
While leaders are searching for complex solutions to the economic crisis, well-established trends in ordinary business collaboration could convert this mess into a bold new opportunity to unify left- and right-wing values, resolve what is being called the "moral crisis of capitalism," and jump-start the economy.Skip to next paragraph
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Americans are stuck in ideological gridlock between the left's dependence on government versus the right's advocacy of markets. Conservatives rightfully criticize the federal government's soaring spending and intrusions into business freedom. But many – from the pope to Bill Gates – are critical of the moral failings of an economic system based on self-interest that caused the financial meltdown.
Entertain, for a moment, the possibility that President Obama could fulfill his vision of using collaboration to resolve this conflict. Obstacles aside, what if Americans could unite the Republican ideal of free enterprise with the Democratic ideal of social community? It may seem a fantasy, but progressive corporations are moving in that very direction – to a form of "collaborative enterprise" that offers a more productive, innovative, and socially responsive market system. Consider three examples of success:
•Whole Foods has thrived under a philosophy that holds, "Profits are a by-product of treating people well, not the top priority." Employees are organized into teams that manage themselves, hire co-workers, and select products. They get bonuses for good work, while the CEO is happy earning a paltry 19 multiples of the average employee pay.
•Nucor is one of the world's most successful steel firms because each mill team builds a cohesive culture based on performance and collaboration. Top workers earn three times the industry average, and the CEO said of Nucor: "Our culture outperforms anything."
•Johnson & Johnson grew robustly through 2006 by 15 percent each year, and continues to garner respect today by requiring its 80 small businesses to be self-managed. Each business has its own governing board and focuses on the needs of doctors, nurses, and patients who use its products.
Despite the success of such cooperation, it is still not mainstream practice among businesses. The past 30 years of Reaganomics unleashed the power of individualism and competition. Now the challenge is to create an environment that fosters cooperative working relationships.
Cooperation is crucial in today's knowledge economy because knowledge increases when shared. That's why even throughout the old industrial economy that fostered conflict, progressive managers have longed practiced "coopetition" – cooperating even with competitors to produce better results for all. Social responsibility and ethics are commendable, but it takes active collaboration to actually resolve tough challenges and create value.