“Principles based capitalism for the 21st Century” as touted by Warren Buffet

Does it pay to be good?

Once upon a time, business measured customer satisfaction (and some laggards still do) as the universal measure of good.

A  decade after this had been adopted globally, the penny finally dropped that satisfaction literally means ‘enough’, which is not good, as enough means, no more.

Now business uses advocacy as the critical measure of “good” typically asking; “How likely are you to recommend the brand (based on a nominated attribute) to a friend or peer?”.

In reality, ‘advocacy’ is a bit lame as well, but it does take into account the growing significance of word of mouth and social media.

My preferred way to ask is:

“How does the brand promise take customers further towards their ideal self?” and how is this “good”?

The most powerful model of “good” I have come across was articulated by a philosopher, counseller, theologian and teacher, John Bradshaw.

He basically describes three levels of good:

The childish level of good: It is good because it feels good

The next level of good: It is good if you don’t get caught.

(and finally, and only some brands and people get here)

The highest level of good: It is good if the principles and values underlying it are good.

The highest level of good is the one that experts like Warren Buffet pursue to invest in. He calls this investment approach:  “Principles based capitalism for the 21st Century”.

Walking his talk, Warren Buffet wrote the Berkshire Hathaway Owner’s Manual in 1999,  which acknowledges the rights of investors with economically sound allocation practices, the principles upon which he governs his business.

Buffet says most CEO’s would have a hard time writing their own “Owners Manuals”, so lacking are they in conscious use of principles in their business.

To be honest, Warren Buffet’s investment strategies answers the opening question, “to be good is good and it pays”.

I don’t know about you but I feel really good, the childish level of good, about this principle based capitalism business.

Louise Kelly

Managing Director

Hearts and Minds

References

http://www.johnbradshaw.com/

http://www.berkshirehathaway.com/owners.html

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