Reinventing Capitalism in the Digital Age

Description

This Element examines the current crisis of capitalism's legitimacy and concludes that it derives principally from business pursuing an aberration of capitalism known as shareholder capitalism, in which firms sought to maximize shareholder value as reflected in the current share price, at the expense of all other stakeholders and society. Shareholder capitalism began in the 1970s and was renounced by the Business Roundtable in 2019, but continues behind a facade of stakeholder capitalism. Stakeholder capitalism is the most widely cited form of capitalism today, but it is incoherent as a practical guide to action for an entire firm. This Element concludes that a recent evolution of capitalism--customer capitalism--which gives primacy to co-creating value for customers and users, enables firms to master the challenges of the digital age, shower benefits on society, and meet the needs of all the stakeholders.

'The digital revolution has transformed many aspects of our lives as consumers and workers. In this bold new book, Steve Denning asks what effect the digital revolution is having on capitalism itself. His careful critique exposes the flaws in much of the current thinking about shareholders and stakeholders, while also showing the enduring power of a customer and purpose led view. For anyone interested in making sense of today's complex debates about digitalisation and capitalism, this book is a must-read.' Julian Birkinshaw, Vice Dean and Professor of Strategy, London Business School 2022 'Steve Denning is one of today's leading thinkers on why we must and can improve our corporate and innovative practices if we are to thrive. Reinventing Capitalism in the Digital Age is a much-needed book at the right time. He convincingly and passionately makes the case for the emerging movement to customer primacy and why the digital age makes that essential.' Curtis R. Carlson, Founder and CEO, Practice of Innovation. Former CEO of SRI International, Co-author of Innovation: The Five Disciplines for Creating What Customers Want 'People are increasingly skeptical about capitalism. And yet, as Steve Denning's approachable treatise points out, capitalism has also delivered a standard of living our ancestors could only dream of. In this provocative short book, Reinventing Capitalism in the Digital Age, Steve debunks the idea that the world is on a steady path to disaster and offers a recipe for benefitting from capitalism while moderating its worst effects.' Rita McGrath, Professor of Management, Columbia Business School, author of Seeing Around Corners and The End Of Competitive Advantage 'In Reinventing Capitalism in the Digital Age, Steve Denning takes us on a journey of how organizations, not technology, will determine our success or failure in this digitally-inspired world, and how legacy 20th-century management mindsets are our biggest handicap for moving into the future. Steve shows us how pioneering organizations are rethinking what they do, how they do it, and how their managerial mindsets have changed in order to fully capture the possibilities so abundant in the emerging digital age.' Bill Fischer, author of Reinventing Giants, Professor Emeritus, Innovation Managememt. IMD. 'A functioning capitalism is deeply intertwined with management practices and leadership values. Creating value for customers is tightly linked to the real world, beyond ideological fantasizing. In his book. Reinventing Capitalism in the Digital Age, Steve Denning demonstrates a combination of grand vision and pragmatic doing that is at the heart of a renewed capitalism with the human being at its center, as envisaged by Peter Drucker.' Richard Straub, founder and President of the Global Peter Drucker Forum 'There is nothing more important than reimagining capitalism' Amy Edmondson, Professor of Leadership and Management, Harvard Business School