Barbara Gray, CFA – June 22, 2012
Kevin O’Leary: “I don’t know where we got lost – we’re all singing Kumbaya these days. Let me tell you how it works. Business is war. You get up in the morning and you figure out how do I kill my competitor… That’s what made America great. Competing. Winning. Fighting.”
Sara Blakely: “I completely disagree… I have done it very differently… I have only been focused on my own quality. What can I offer that is the best and give value…”
It was fascinating to watch the spirited exchange on CNBC’s “Getting Back to Business” Town Hall between Kevin O’Leary (Canadian venture capitalist and famed dragon on The Dragon’s Den) and Sara Blakely (American entrepreneur who founded hosiery company Spanx back in 2000 and just made Forbes’ Billionaires list). Only time will tell which business ideology will prevail, but for what it’s worth, my money is on Blakely…
Although I have to admit I have fond memories of sitting around the campfire at Outdoor School back in Grade 7 singing Kumbaya, I am quite conservative and very much a capitalist. My father spent his 40-year career working in the forest products industry so let’s just say I didn’t grow up embracing Greenpeace. And given I have spent my entire career researching and analyzing companies I have pretty much lived and breathed capitalism the past two decades.
As I discussed in my recent BCR Insight “The Social Renaissance: The New Dawn of Capitalism…” social media empowers customers to fight back against companies that achieve their competitive advantage through exploitive means. As social media creates a higher level of connectedness in the corporate ecosystem, the “business is war” mentality of being opaque, inauthentic, and uncaring will only create negative social capital, which will lead to value erosion. Although many businesspeople and investors mock the Kumbaya principles of human and spiritual unity, closeness, and compassion, I believe this is where capitalism is headed. And as the Social Era progresses, they will come to realize that companies like Spanx, which are transparent, authentic, and engaging, will be the ones to thrive.
What do you think? Who would you invest your money with?