While we were sleeping
The idea that the corporate citizen will not be caught in the current revolt is a delusion. Companies need to take a stance.
I cannot get it out of my head. Is this how a momentous global shift feels? A sense of grief, of disbelief, the same pangs of pain you feel when an old friendship unexpectedly breaks down. The creeping acceptance that the world as we knew it just slipped out of our hands, makes us numb. We feel like idle bystanders watching ourselves caught in a rampaging vortex.
Who is we? The so-called cosmopolitans, those who have gained most from globalization and who are versed in a culture of openness, reason and restraint, the very traits of modern corporate culture. These bedrock values have been thrown out of the window in the current political revolt. It would be foolish to assume that the uprising would stop at the doors of the corporate institution.
VUCA, that elegant acronym, is shaking off its PowerPoint abstraction and rearing its ugly head. Financial markets have hit an all-time high, but remain volatile as every ambiguous action from the Trump team is deciphered. Let’s go beyond short-term expectations and wishful thinking about the president-elect’s true intentions: The revolt we have witnessed has less to do with Trump and more with deep trends, many of which have been debated over the last days: rising inequality, stagnant real incomes, an eroding middle class, mass migration, decreasing social mobility, growing cultural and physical segregation, media fragmentation. FOMO, that other famous acronym, has acquired a far more ominous meaning as entire constituencies turn against traditional institutions.
The modern corporation was an accomplice in this game, with its massive lay-offs and transfer of production facilities to low-income countries. Up to now the white-collar cosmopolitan had been largely exempt from this, but this is going to change: The corporation as the natural reserve of the white collar worker will cease to exist. The cracks in the wall are evident: disaffection and disengagement have grown massively as mature companies demand more flexibility and productivity from a dwindling work force. Digitization is on the verge of erasing entire cohorts of white collar professions previously regarded as safe. A rising army of self-employed professionals awaits a bleak future in terms of stable income and future assets. Growing within-firm pay inequality has not just affected the blue-collar workers, but increasingly the middle ranks as well. In the US, the best-paid 1% of workers earned 191% more in real terms in 2011 than they did in 1980, whereas the wages of the middle fifth fell by 5%. With the exception of a small set of uber-talented knowledge professionals employed by so-called frontier firms, the average white collar worker stands to lose.
The bottom line is this: Loss of status and income is a very real prospect for a constituency that for decades has tied its fate to the corporate institution. The compact will be broken. The sense of betrayal will be as palpable as we have seen in the political landscape. As they fall victim to the forces of globalism, they will turn against the very values they embraced and embodied for so long. This time, the corporation may be less lucky in escaping the wrath. The white collar constituency exercises real power through its social networks, its skill base, purchasing power, and access to media, unions and government. Big companies like BP and Volkswagen already feel the consequences of a more activist and unforgiving audience. In a not so very distant past in Europe, we even saw acts of violence against corporations against the backdrop of a highly charged and radicalized social climate.
This is not about fear-mongering. This is a wake-up call to show true colors. Turning a blind eye to outside events and staying in the operational loophole is recipe for failure. Corporations should not pretend to be amoral. They are as much governed by values and principles as any other institution. In a world in flux, corporations can be a force of good. They are the main drivers of prosperity and growth. They possess the innovation capacity we need to tackle the world’s intractable challenges, the demise of the middle class being one of them. Corporations, for our and their sake, should not mistake vacillation for flexibility or moral laxity for commercial prudence. They should unequivocally commit themselves to a higher moral purpose, to a degree we have not seen much so far. A purpose that benefits society at large instead of a small privileged group.