The recent incidences of the 600-point drop of the Dow Jones industrial index, and the China CSI Stock Market meltdown once again bought back some haunting memories of the 2008 financial crisis, which laid dormant in my memory. As a witness to the Real Estate industry who saw massive 30%+ layoffs, 18-24 month salary reductions and colleagues who were forced to leave their profession and never returned; many of us chose to accept, fight and move on. Fast-forward to 2015, as the US economy once again soared to new historic records of company profits, and the housing market once again achieved new heights in creating a new generation of billionaires and entrepreneurs; the real question that still seems to linger is – “Did we ever forget and forgive?”
A recent reading of Michael Porter’s “Creating Shared Value” (Harvard Business Review) provided some great insight to suggest how the future model of businesses should integrate social value into its core business model in order to promote mutual Economic & Social success. Some examples come to mind for example Tom’s, Warby Parker and Glassy Baby, which are all successful examples of this new generation of businesses, but they are also only a minority within businesses startups
The timely release of Author Michael Lewis’s “The Big Short” once again brings into the spotlight many aspects that caused the last economic downturn and begs us to ask the question – “What has really changed?” The economic structure and regulatory framework that breed the overall “Too big to Fail, Too small to care” mentality continues to permeate corporate America as the same CEOs and major companies continue to dominate the screens of Bloomberg and CNBC.
It is quite easy to understand why the general public holds a high level of mistrust in businesses as we enter 2016, as I believe that many American’s may be like me – haunted by the events that happened 8 years ago, don’t believe that any social justice had been served (only 1 banker was prosecuted for all the events that led to the systematic financial failure of 2008), and sense no difference in the ways that corporate America continued to conduct business since the day taxpayers paid to bail out wall street.
“Shared Value” is a great idea and there is great momentum for a grassroots movement from the bottom up to shatter traditional business conventions and disprove critics that see a conflict between “social good” and “business good”. But this bottom up approach may not be enough, as many of us seem to be “lingering” for answers that still haven’t been answered from 8 years ago. And only if these questions could be resolved, would the general American public move into a new relationship dynamic with the business community.
It is unfortunate that the general public perception will never be put into the fine grain context of considerations for different business sectors & industries, allowing bad behavior of certain industries to permeate general perceptions of all businesses.
It may simply be an issue of timing that 2016 is too soon for us to forget. But if we seek for building a different relationship dynamic starting today, a corresponding Top-Down approach is required from the government and corporate America. The government still owes the public an explanation, and the individuals and companies involved still owe the public a degree of responsibility. It is with clarification and understanding of events past, acknowledgement of responsibilities, and suggestions to effective preventions that one could truly move forward. The government still owes its people an answer.
“In a few years from now, all will be the same and they will blame everything on the poor and the immigrants” – Mark Baum (Steve Carell), The Big Short (Movie)