The capitalist revolution?

By Emma Clark BBC News Online business reporter

An academic and a former chief executive believe companies have become corrupted. BBC News Online talks to them about their new book called "The Support Economy".

Leave a Harvard professor and a chief executive in a room long enough and they will no doubt debate the parlous state of modern business.

The couple say the conditions are ripe for change

Marry them off, exile them in Maine, and they will write a book about revolutionising the corporate world.

Shoshana Zuboff, a Harvard business professor, and her husband, James Maxmin, are convinced that "capitalism" as we know it is failing us as individuals.

"Society has changed," says Ms Zuboff. "We are way ahead of the corporations we depend upon for consumption and employment."

Our frustration at dealing with shoddy customer service and our distrust of institutions are proof of this breach, she adds.

Crisis

Mr Maxmin, a chief executive of Volvo-UK, Thorn EMI and Laura Ashley during the 1980s and 1990s, confesses that he has also become disillusioned.

Hundreds of billions of pounds have been spent on customer relationship management but it still hasn't changed anything

James Maxmin

"In 1995 or 1994, we both had a recognition that something was wrong. I was spending all my waking hours trying to make a business work and I couldn't understand why it was so difficult to make it work."

Anyone who has spent hours negotiating an automated voice-mail system or waiting in a queue while shopping would happily plump for better customer service.

And this is what Mr Maxmin thought too until he realised that poor customer service was merely a "symptom" of a bigger problem.

"Hundreds of billions of pounds have been spent on customer relationship management (CRM), and hours of time, but it still hasn't changed anything."

Capitalism corrupted

Ms Zuboff and Mr Maxmin identify an outmoded form of capitalism, which they label "managerial capitalism", as the cause of all our dissatisfaction.

With its roots in the early 20th century, this "managerial" model was pioneered by men such as car magnate Henry Ford, who discovered the economies of mass production.

SHOSHANA ZUBOFF

Professor of business administration at Harvard

Author of 'In the Age of the Smart Machine'

Plans to home school their two children

"Managers are at the centre, preoccupied with their own interests," says Ms Zuboff (glaring at her husband who foolishly attempts to interrupt her).

"But their path has become corrupted, they are insulated and have become a source of governance catastrophes."

This conveniently explains the Enron debacle and - Mr Maxmin adds - the "pathological" behaviour of senior managers at American Airlines who recently granted themselves bonuses while negotiating to cut the pay of other staff.

JAMES MAXMIN

Previously CEO of Volvo UK, Thorn EMI and Laura Ashley

Founded an investment company called Global Brand Development

Was a non-executive director of BAA, Geest Plc and Scottish Provident

Has no plans to return to corporate office

Richard Scase, a professor of management at the University of Kent, agrees with the couple's critique, but only to a limited extent.

"It applies to an American context, but not a European one," he says. "US companies are driven to please their shareholders, they have to meet quarterly targets - this is a ruthless form of capitalism."

However, he argues that in Europe consumers have more control and enjoy better protection under the law.

He also points to a "stakeholder" model in Scandinavia and the Netherlands, where companies employ supervisory boards composed of consumers, employees and shareholders.

Capitalism regained

Undaunted, the couple foresees a new form of capitalism which embraces the needs of a more educated consumer.

"People have opinions, they want choices - they are not like their parents and grandparents who had certain roles to play," says Ms Zuboff.

Under this model, car manufacturers, banks, supermarkets and other companies form federated networks, or alliances.

Pooled resources and a single infrastructure within the federation - made possible by digital technology - allow the companies to offer custom-built products and services.

In the book, a hypothetical family uses its federation to purchase a socially responsible car, manufactured with recyclable material and with personalised accessories such as a GPS system.

The car is then delivered to the family's door, complete with insurance and car tax.

Debate

To some extent, such alliances already exist in a limited form, between cars and finance companies, for example.

Similarly, companies like Virgin and Marks & Spencer already use their brands and corporate partners to sell a range of products, points out Mr Scase.

We can help describe a path, but it is for the experimentalists and the entrepreneurs to take us down that road

Shoshana Zuboff

"The problem is that it's a good idea, but they are over-generalising," adds Nigel Nicholson, a professor of organisational behaviour at the London Business School.

He argues that the "one-stop shop" or federated network would not suit commoditised goods and services.

"With a plastic cup, you just want a cup at a low price."

In fairness to Ms Zuboff and Mr Maxmin, they are not presuming that companies will rush to adopt their ideas.

"We can help describe a path, but it is for the experimentalists and the entrepreneurs to take us down that road," says Ms Zuboff.

And, the conviction with which they extol their theories, their idealism and even their bickering are all strangely beguiling.

They envisage a world where 24-hour support and tailored services are not confined to a wealthy elite.

"History shows us that luxuries of the past, like China plates and airport travel, have become necessities," says Ms Zuboff.

"It is not the rich who need this most, it's the rest of us - you, me, working moms..."

Bring on the revolution.

"The Support Economy" is published by Penguin and costs £25.