I am a capitalist.

Yep, I said it. The dreaded “C” word.

I also believe in the other “C” word, Corporations.

While I am in confession mode, I will throw in the final gauntlet: I love the book Atlas Shrugged by Ayn Rand. This book speaks to my core belief in the need for courageous, capitalistic leadership.

What’s more, it provides me a rare role model of female leadership. Atlas Shrugged features a heroine who is equal in intelligence, resilience, and business leadership as her male counterparts.

Before you judge me, let me explain.

First, I believe in the principles of supply and demand and free trade.

I believe that if someone works hard and provides customers what they need with great service, they deserve to make good money.

In addition, I believe in a market where healthy competition and customers ensure companies are providing value to the market. In fact, with a healthy capitalistic market, consumers have choices and the freedom to buy from whom they believe best serves their needs.

Capitalism and entrepreneurship built America and most of the world’s economies.

Profit alone cannot be the goal

All of that said, I am not a Friedman capitalist. In other words, I don’t believe in pure competitive capitalism or capitalism that profits shareholders or only a few.

Profit is part of a healthy financial statement; however, profit also provides organizations the ability and responsibility to give back.

Some of the greatest capitalists of our time, Bill Gates, for example, are also some of our strongest philanthropists.

In the past, Microsoft was often called the evil empire. However, I can tell you from experience working there that the spirit of community and philanthropy was not just strong in the corporate culture, it was expected and celebrated.

This, to me, is Compassionate Capitalism, where doing social good and achieving strong financial performance work hand in hand.

There is a wonderful book called Designing Reality that discusses the need for us to embrace a “double bottom-line” mentality. A double bottom line organization is committed to both positive financial returns and meaningful social impact. In other words, we can make money (capitalism) and change the world for the better (social good).

The context of this book is how companies need to change the way they think and operate in order to thrive in the current digital revolution. However, much of what they discuss could translate into compassionate capitalism.

Capitalism does not have to be evil

In so many of the protests across America and the world, capitalism and corporations have been vilified and blamed for everything wrong with our economy and the fabric of our society. Is capitalism perfect? No. But, without a strong capitalistic economy, we would not have the money to achieve all of the social programs we also want to implement.

My issue with anarchists and even politicians like Bernie Sanders is that they do not provide evidence of HOW we would pay for all of the social programs they believe are needed.

What’s more, people assume that capitalists, free market economists, or large corporations do not want to do what’s right for society and the people in it.

Sure there are absolutely selfish companies and leaders. However, for 90% of companies and their leaders, this is simply not true.

I will speak for the technology industry in which I’ve worked for over 25 years. The vast majority of people I know in this industry not only want healthcare for everyone and a strong social safety net, they give generously to help us achieve those basic rights. This remains true across levels, from middle management to senior executives who make millions every year.

As with so many things in America right now, we need to be careful not to draw lines too aggressively for one side or the other.

This is also not a Republican or Democratic issue.

Good people, who believe in both a free market economy and a strong social fabric, exist across all parties, walks of life, and social economic levels.

Compassionate Capitalism is also about a culture of kindness

“Compassionate Capitalism means that corporations have to account for the costs that they impose on the environment, the communities that lie in the vicinity of their factories and plants, as well as offices, their employees whom they have to treat with more kindness, and the consumers and other stakeholders to whom they must be accountable.”

The Management Study Guide

I love this definition of Compassionate Capitalism that goes beyond just social good to the way we treat our employees, customers, and even the environment.

Some of the greatest economies of the world practice Compassionate Capitalism. This is particularly true in the Nordics, which are falsely called socialist economies.

“Nordic countries focus on combining a free market system with several social programs.”

The Foundation for Economic Education

That’s it. A perfect balance – a free market system with social programs that take care of the people in that free market.

Capitalism can enable health and happiness

Not surprisingly, these same countries rank highest for happiness and for the number of women in leadership across companies and government.
As an aside, I do believe women are ideally suited to lead organizations and countries with compassionate capitalism.

Some of you will immediately remind me of the high tax rate in the Nordics. Yes, it is true that Sweden and other Nordic countries pay a significantly higher rate of tax than we do in America.

However, they also don’t have to pay extraordinary amounts of money for basic healthcare, prescriptions, childcare, and other programs that cost the average American thousands of dollars every year.

I would take a higher tax rate if I could see how that money was directly benefiting the society and people around me.

With the current system, I’d rather have more of that money in my control to donate to social programs, since my government is not doing so.

Compassionate Capitalism takes Courageous Leadership

Focusing solely on the financial bottom line is not a strategy for long-term success. I also think it’s the coward’s path.

It takes a courageous leader to not just focus on revenue or profit and loss but rather how the employees, customers, partners or suppliers are treated. Also, to care how everyone feels.

Have you ever been served by a joyous person at a restaurant or hotel? I have. It’s fascinating what happens to us when we do receive happy service. We become happier. Joy is contagious. Chances are we also leave a higher tip and give a stronger positive review for the business because of that employee.

There’s an old cliché I was recently reminded of: Happy employees make happy customers. This is so true.

I just finished reading The Infinite Game by Simon Sinek. In it, he illustrates two types of leadership mindsets: Finite and Infinite. A finite leader is one who only thinks about the immediate return, making sure shareholders and investors are happy. These leaders will drive their teams to optimize quarterly results no matter what. They are focused on a single bottom line. In a finite mindset, there is a perceived winner and loser for every game.

However, Infinite leaders are in it for the long haul. There is no loser or winner, because the game never ends. With an infinite mindset, how you treat your employees and customers matter. It’s all about building trust and creating a company that is greater than any one product or person.

In the book, Sinek introduces the concept of a “Just Cause“. For organizations playing the Infinite Game, the Just Cause is a forward looking statement that is so inspiring and compelling that people are willing to sacrifice to see the vision advanced.

How do we practice Compassionate Capitalism?

I posit that everyone wants to believe in a vision for the future. They want to be inspired. In the Infinite Game and with Compassionate Capitalism, you can provide everyone with strong financial incentives AND stand for something that inspires everyone and brings them joy in their work.

In addition, I believe compassionate capitalism aligns perfectly with our goals and vision for greater diversity and inclusion. With Compassionate Capitalism, all benefit. Not just a few.

We don’t have to choose between socialism or social good and a strong free market economy. The two should be inclusive and done in harmony.

We should be able to make a strong profit and take care of our employees and citizens.

Governments should be able to balance their budget and not jeopardize healthcare, education or other critical social programs.

What if this practice became the norm?

What if we all intentionally became compassionate capitalists?

Let’s hope with the change in government this current oxymoron can become the way we operate.