Dan Sullivan: Capitalism 2.0

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In the past 200 years, capitalism has made great strides in increasing employment and the quality of life for more people in more places than any other structure.

Even Karl Marx, the greatest critic of capitalism, wrote in 1849 that there had been nothing in prior human history to compare with the extraordinary changes this economic approach had already brought to all aspects of human affairs in a very short period of time. He thought the majority of these changes were — and would continue to be — negative, but in fact they turned out to be positive.

For the first time, great numbers of human beings had the opportunity to develop themselves as individuals, which was inconceivable under previous economic formulas and methods.

Capitalism 1.0
We can usefully consider all the progress made in capitalist societies up until now to be “Stage One.”

Until very recently, just having a secure job, reasonable working conditions, and decent pay was considered the best that one could expect from capitalist employment. And, in many parts of the world, people are just entering this first stage of capitalism.

In Western countries, we’re already leaving Stage One without having a clear idea of what Stage Two will be and how it could be systematically developed and continually improved.

There’s a growing dissatisfaction with work as it exists; yet, there’s no coherent, simple, universal methodology for transforming the capitalist system and the millions of organizations operating within it.

The “10/90” class system.
I believe The Multiplier Mindset is the doorway to Stage Two. Here’s why:

Up until now, businesses and other organizations had to find ways to be productive with only a small percentage of their members focused on creative and innovative work. In today’s most creative and productive organizations — in all sectors — there’s a “10/90” class system: Ten percent of the people in any organization of 10 or more will be the creators and innovators, while 90 percent will function as non-creative implementers. The creative 10 percent are the first-class citizens; everyone else is second-class or lower. This is seldom stated openly, but everybody knows the score, and most people — whether at the top or the bottom — accept it as normal.

While the 10/90 class system operates in the most creative organizations, the split is even worse in those where the work is repetitive and non-stimulating. In these situations, even those at the top can feel second-class.

The dissatisfaction with this class system is growing quickly in advanced economies, both in the private and public sectors. It shows up in low morale, absenteeism, turnover, inefficiency, non-accountability, and inconsistency — all leading to decreased productivity.

A change is needed.
When it comes, it will be widely appreciated and rapidly accepted. We are ready to expand the practical, day-to-day opportunity to be engaged in innovative thinking, activity, and achievement to every member in every organization.

If this is going to happen on a society-wide basis, it won’t be the result of the abstract, impersonal, complicated, and ponderous organizational methods bureaucracies love to implement. Countless billions are spent on attempts to motivate the unmotivated.

Leadership transformation.
Motivation can only come from the transformation of leadership at the top. This transformation must be simple, easy, rapid, and immediately obvious to everyone in the organization. And it must be entrepreneurial — meaning that the leader is, first and foremost, prompted to multiply their own productivity and results. They must love multipliers, first individually, then organizationally.

Once this starts, there must be a simple, easy, and rapid means to show others how to do this and to support them in doing more and more of it.