The bonus announcements from the major UK banks back in February provided the back-drop for a political plea for more responsible capitalism. I found this debate somewhat ironic for two reasons.
Firstly, it was not new. It was the same observation that Henry Ford made around 100 years ago when he observed:
‘As betting at the ring adds neither strength nor speed to the horse, so the exchange of shares in the stock market adds no capital to the business, no increase in the production and no purchasing power to the market’
Secondly, as the Government currently owns a large percentage of two banks why does it not take action? If it is so keen on responsible capitalism why not develop a new banking model for these banks based on the principles of responsible capitalism. Create the John Lewis Partnership equivalent of banking. I am no expert, but key features could include:
- A senior management team who are happy with a capped salary that are generous but in line with a largely publicly owned organisation. For instance, the MD of John Lewis was happy to admit that his circa £500k salary was fair reward for the job that he did, even though peers in public listed companies earned significantly more. Let the bank be led by leaders with a similar outlook, and who will not jump ship to earn more elsewhere.
- Employees are partners and share equally in the rewards and can vote on certain aspects of the development of the business
- Superior customer service
- A creative blend of innovative thinking with a respect for tradition
- Simple portfolio of ethical products that are transparent and based on sound financial principles
People would use (indeed I think flock) to the bank as they believed in its values. The products and services that they offered would be transparent, fair and provide superior customer service. Alas I am not a banker and my ideas may not be feasible. However, I do think those who understand the industry more fully could explore the idea… What do you think the John Lewis of banking could look like?
Let this be food for thought to all in the supply chain. To take time to reflect on what the principles of responsible capitalism may mean to your organisation and the way in which it does business. Reflect on my final quote from Henry Ford:
‘Competition whose motive is merely to compete, to drive some other fellow out, never carries very far. The competitor to be feared is one who never bothers about you at all but goes on making his own business better all the time. Businesses that grow by development and improvement do not die.’
supplychaininsight 
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