Obama's Victory: A Consumer-Citizen Revolt

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The company became a transaction machine designed to maximize profit, untethered from its community, society, and country. Jobs were outsourced, work was automated, assets were concentrated, costs were cut to the bone, and balance sheets depended on increasingly arcane financial engineering. Takeovers gave way to mergers. Industries consolidated, limiting consumer choice. The inward focus to which management had always been vulnerable became pathological, banishing the needs of customers and employees to a distant horizon. Job security became tenuous, and most families depended on two incomes. A large majority of employees wanted more flexibility at work than their employers allowed. Working parents, and especially mothers, foundered. Customers were treated as anonymous and expendable.

Yes, productivity rose. But the mechanisms once in place to share those benefits had been battered by years of trickle-down tax policy and successful corporate lobbying. Instead, executive compensation soared, along with the fortunes of a new class of financial specialists who identified and facilitated these deals.

Along the way, this new model of success migrated to every corner of the public and private landscape: government agencies, hospitals, doctors' offices, schools. If you have ever wondered why you can only spend seven minutes with your doctor, why hospitals measure their success by the number of beds they fill, or why you can't find anyone in a government agency to help you—this is the reason.

The Erosion of Trust

During these same decades, Americans were becoming better educated and more opinionated. They were traveling and participating in the new information society. Access to information, connection, and communication exploded with the Internet. Americans experienced themselves as unique and complex individuals who wanted their voices heard—just as the businesses they depended upon were becoming more ruthless, remote, gigantic, and impersonal. The result was an epidemic of stress and a precipitous erosion of trust toward just about every kind of organization, but especially those businesses upon which people most depended—health care, insurance, financial services, transportation, housing, telecommunications, media.

In The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, my co-author, Jim Maxmin, and I argued that this failure of trust spelled the end of one episode of capitalism but framed the opportunities for a new era of wealth creation. When faced with a true choice, consumers will give their allegiance and cash to advocates who offer trustworthy relationships intended to support their complex needs rather than to distant adversaries who offer only impersonal transactions.

The challenge is to change the way we organize assets and leverage technologies so it's possible to address individual needs at an affordable price. We described a Copernican inversion in business, one that puts the consumer at the center of the commercial solar system in much the same way that Apple's (AAPL) iPod and iTunes put the music listener at the center of a newly configured music industry. This means historic opportunities for a new kind of competitor.

While our analysis was embraced in many parts of the world, we found American managers doggedly indifferent to the crisis of trust. They felt immune to its consequences. For one thing, nearly all competitors in most industries operated the same way. And as long as consumers had no real choices, there was little pressure to change. Most managers regarded the practices of the money machine as inevitable and could imagine no alternative. They also knew that people are typically just too time-starved and hassled to raise much of a fuss. Finally, there was a sense that as long as Americans had access to cheap credit and continued to spend, there was nothing to worry about.