"Re-framing Capitalism"

I admit I was intimidated by the conference title of my recent high-visibility event in Seoul; namely, “Reframing Capitalism.” And further intimidated by the fact that a passel of Nobel laureates in economics would be addressing the issue. Then it occurred to me that the mid- to long-term “reframing” was more about recasting the nature of work/jobs in, for example, the face of 2020’s artificial intelligence than about whether the Spanish bailout is $100 billion or $400 billion—as nontrivial as the latter is. I.e., what the hell will the world’s four billion or so workers be doing, say, 10 years from now? I’m not sure that sophisticated econometric analyses will be all that helpful in determining an answer. Hence what follows, which is surely the roughest of first drafts. (The complete document is reproduced here—and is also available in PDF and PowerPoint formats.)

A 15-Point Human Capital Development Manifesto
at the Enterprise and National Government Level/HCD2020

“In some sense you can argue that the science fiction scenario is already starting to happen. The computers are in control. We just live in their world.”—Danny Hillis

“Human creativity is the ultimate economic resource.”—Richard Florida

“Every child is born an artist. The trick is to remain an artist.”—Picasso

“Knowledge becomes obsolete incredibly fast. The continuing professional education of adults is the No.1 industry in the next 30 years.”—Peter Drucker

“If you want staff to give great service, give great service to staff.”—Ari Weinzweig

In mid-June 2012 I spoke at a major event in Seoul, Korea: World Strategy Forum/The New Rules: Reframing Capitalism. Predictably the discussion focused on global financial infrastructure. To ignore that would have been insanity. On the other hand, I believe that mid- to long-term employment/unemployment is even more affected by the changing nature of work—and the wildly accelerating effectiveness of technology, such as artificial intelligence, in encompassing activities that engage tens upon tens of millions of people, especially in the OECD nations. I believe this is our #1 problem—and #1 opportunity. Confronting the nature and extent of future employment is required for reasons of economic survival and growth—and for reasons of social and political stability. Having created here in a single paragraph the oceanic basis for what follows, I must admit that it was instead a mundane question (Question #1) in an interview before my speech that triggered this “manifesto.” Namely: “Dr. Peters, how would you define the changing nature of corporate social responsibility in these uncertain times?” Herewith, in effect, my response—which, quite honestly, came as a surprise to me:

1. “Corporate social responsibility” starts at home—i.e., inside the enterprise! MAXIMIZING GDD/Gross Domestic Development of the workforce is the primary source of mid-term and beyond growth and profitability—and maximizes national productivity and wealth. (The profitability axiom: If you want to serve the customer with uniform Excellence, then you must FIRST effectively and faithfully serve those who serve the customer—i.e., our employees, via maximizing tools and professional development.)

2. Regardless of the transient external situation, development of “human capital” is always the #1 priority. This is true in general, in particular in difficult times which demand resilience—and uniquely true in this age in which IMAGINATIVE
brainwork is de facto the only plausible survival strategy for higher wage nations. (Generic “brainwork,” traditional and dominant “white-collar activities, is increasingly being performed by exponentially enhanced artificial intelligence.)

3. Three-star generals and admirals (and symphony conductors and sports coaches and police chiefs and fire chiefs) OBSESS about training. Why is it an almost dead certainty that in a random 30-minute interview you are unlikely to hear a CEO touch upon this topic? (I would hazard a guess that most CEOs see IT investments as a “strategic necessity,” but see training expenses as “a necessary evil.”)

4. Proposition/axiom: The CTO/Chief TRAINING Officer is arguably the #1 staff job in the enterprise, at least on a par with, say, the CFO or CIO or head of R&D. (Again, external circumstances—see immediately above—are forcing our hand.)

5. The training budget takes precedence over the capital budget. PERIOD. It’s easier fun to get your picture taken next to a new machine. But how do you get a photo of a new and much improved attitude in a key distribution center? But the odds are 25:1 that the new attitude will add more to the bottom line than will the glorious state-of-the-art machine.


In the 3rd quarter of 2011 manufacturing output went up 4.7 percent—one heck of an accomplishment. But there was a catch, and a big one. Gross hours worked in manufacturing went down 0.6 percent. Such ratios are becoming commonplace—and in services as much or more than in manufacturing. As we automate damn near everything and as that trend accelerates (been in an auto plant lately—where are the people?), output is dramatically outstripping labor usage. Great for productivity, borderline terrifying for workers. This “manifesto” is written with such numbers in mind—not only does that not mean that it’s neo-Luddite, but, in fact, the opposite. Timid strategies will not address the employment issue. Education and job content must be turned upside down—in short order.


6. Human capital development should routinely sit atop any agenda or document associated with enterprise strategy. Most any initiative you undertake should formally address implications for and contributions to human capital asset development.

7. Every individual on the payroll should have a benchmarked professional growth strategy. Every leader at every level should be evaluated in no small measure on the collective effectiveness of individual growth strategies—that is, each individual’s absolute growth is of direct relevance to every leader’s assessed performance.

8. Given that we ceaselessly lament the “leadership deficit,” it is imperative and just plain vanilla common sense, that we maximize the rate of development of women leaders at every level—little if anything has a higher priority. (It is an outrage that this has not been the case until now—and is still not the case in far too many institutions.) (And, while there are no guarantees, women are more likely dispositionally to take a shine to the imperative of maximizing human asset development.)

9. Maximum utilization of and continued development of “older workers” (to age 70—or even beyond?) is a source of immense organizational and national growth and wealth. The rapidly aging population, with oldies far more healthy and vital than ever, ought to be an opportunity rather than a pain-in-the-butt to deal with.

10. The practical key to all human asset development activities is the 1st-line manager. (“Sergeants run the Army” is an accurate commonplace. observation—supported by development resources.) Hence development of the full cadre of 1st-line managers is an urgent—and invariably underplayed—strategic imperative. Arguably, the collective quality and development trajectory of 1st-line leaders is an organization’s #1 human asset development priority. (Consistent with all the above, the 1st-line leader’s skill at “people development” is her or his top priority—for which she or he must be rigorously and continually trained.)

11. The national education infrastructure—from kindergarten to continuing adult education—may well be National Priority #1. Moreover, the educational infrastructure must be altered radically to underpin support for the creative jobs that will be more or less the sole basis of future employment and national growth and wealth creation.

12. Associated with the accelerated priority of the national education infrastructure is a dramatically enhanced and appreciated and compensated role for our teachers—this must necessarily be accompanied by rigorous accountability. There is no doubt that “teaching” (instilling) insatiable curiosity, say, which is the #1 attribute of a creative person, is no easy task; however, there is no way that it can be ducked if one looks at future definitions of employability.

13. The great majority of us work in small enterprises; hence national growth objectives based upon human capital development MUST necessarily extend “downward” to even 1-person enterprises. Collective productivity improvement through human capital development among small businesses has an unimaginably large—and underappreciated—payoff. While many small businesses appreciate the notion, they are unprepared to take the steps necessary to engage their, say, dozen employees in seeking productivity improvements.

14. Needless to say, the activities imagined here will only be possible if abetted by a peerless National Information and Communication Infrastructure. Indeed, the work here is being done—and the need is appreciated and reasonably well funded. The effort must not falter; the new information-based tools are the coin of the realm.

15. Associated with the above is a RADICAL reorientation of leadership education and development—throughout the enterprise/education/continuing education infrastructure. (E.g., Among other things, the MBA and executive education will require open-heart surgery—aimed at shifting focus from finance and marketing to human resource development.) To deal with the most likely future employment scenarios, leaders will need to be masters of the liberal arts—said arts are, again, the determinant of responding to the emerging world.

The agenda implied by the above “manifesto” is bold—and its moorings are a long way from where we are today. But this or something rather like it falls into a category labeled—not optional

Tom Peters posted this on June 20, 2012, in Strategies.
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