The 7 Habits of Highly Effective Capitalism

I remember hearing about The 7 Habits of Highly Effective People decades ago. As a fairly frequent reader of self-improvement material, I'm not sure why I didn't jump on the bandwagon and read it, too; possibly because at the time it was a bandwagon, and I tend to avoid those. I have now, in my mid-50s, discovered Stephen Covey's timeless advice and plan to read through it (on Audible) more than once, so that I can fully absorb its incredibly insightful knowledge.

One benefit of reading this classic now is that I can confirm, through life experience, that what Covey wrote is dead-on accurate. The ideas contained within the book, such as empathic listening, defining what is truly important, and keeping long-term goals front and center can be transformative in both business and personal relationships. I am looking forward to implementing these ideas in my own life and watching how it improves my interactions with clients and family members.

Another benefit is that I can see connections that I would not have previously. One of these is the parallels of the seven principles with those of economic mutuality. I have been struck by the similarities I see between the two, and how those similarities reinforce the reliability and validity of both. To that end, I have extracted brief summaries of the principles and paired them with points from Better Capitalism, to demonstrate their shared ideas.

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Principle One: Be Proactive

"Proactive people do more than take initiative. They recognize they are responsible for their own choices and have the freedom to choose based on principles and values rather than on moods and conditions. Proactive people are agents of change."

Better Capitalism Application: Everyone Is a Part of the Solution. Do Your Part.

By definition, mutuality can only be achieved when all who are involved look out for each other. Better Capitalism details the actions that corporations, government, and individuals must take to accomplish this goal, including benefiting as many stakeholders as possible, implementing supportive policies, and making impactful economic decisions.

Corporations need to develop a core purpose, or a reason to exist beyond making a profit, that will benefit stakeholders. The companies that do so have a much greater chance of long-term survival than those that don't. As Jim Collins put it, "Enduring great companies don't exist merely to deliver returns to shareholders. Indeed, in a truly great company, profits and cash flow become like blood and water to a healthy body. They are absolutely essential for life, but they are not the very point of life." By keeping this kind of core purpose central, companies can benefit everyone involved, including the company itself.

Government plays a crucial role in fostering economic mutuality by implementing policies that encourage shared prosperity. Whether local, state, or federal, the government can support initiatives that prioritize fair wages and working conditions, ensuring that all members of the workforce are able to contribute to and benefit from the economy. Policies can incentivize companies to adopt sustainable practices that will both benefit the environment and promote equity and long-term economic stability.

Individuals can promote economic mutuality by engaging in fair trade practices, supporting local businesses, and advocating for policies that prioritize income equality and sustainability. I think we often believe that we cannot make a difference or that everyday decisions don't matter. In reality, those small but consistent purchases add up over time and make a difference, just as our daily decision about diet and exercise make an enormous overall impact on our health.

Principle Two: Begin with the End in Mind

"Individuals, families, teams, and organizations shape their own future by creating mental vision and purpose for any project, large or small, personal or interpersonal. They identify and commit themselves to the principles, relationships, and purposes that matter most to them."

Better Capitalism Application: Long-Term Thinking Is the Key to Long-Term Success.

Long-term thinking allows businesses and individuals to plan strategically for the future, anticipate challenges, and capitalize on opportunities. By focusing on long-term goals and objectives, organizations can develop sustainable, resilient business models. This approach also encourages investments in research and development, innovation, and employee training.

Long-term thinking fosters a culture of responsibility and accountability within organizations. It encourages decision makers to consider the broader impact of their actions on stakeholders, the environment, and society as a whole. By prioritizing long-term sustainability over short-term gains, businesses can build trust with their customers, employees, and investors, leading to stronger relationships and brand loyalty.

Principle Three: Put First Things First

"People who put first things first organize and execute around their most important priorities. Whatever the circumstance, they live and are driven by the principles they value most."

Better Capitalism Application: For True Economic Success, Don't Forget the Big Picture.

When it comes to achieving genuine economic success, a holistic approach and consideration of all interconnected factors is non-negotiable. This means looking beyond short-term gains and focusing on long-term sustainability and growth. By studying and understanding the impact of their choices, businesses can make more informed decisions that lead to enduring success.

To truly thrive, it is essential for businesses to see the big picture and recognize the intricate web of factors that contribute to economic prosperity. In other words, though quarterly profits may seem to be the most pressing matter, businesses need to keep the multi-year outlook at the center of decision making. Toyota is a great example of this, and one that we'll explore in a future blog.

Principle Four: Think Win-Win

"People who think win-win have a frame of mind and heart that seeks mutual benefit and mutual respect in all interactions. They think in terms of abundance and opportunity--in terms of 'we' not 'me.' They continually seek to build more trusting relationships with others by making deposits into the Emotional Bank Account."

Better Capitalism Application: Economic Mutuality Makes Everyone a Winner.

This principle is really at the heart of Better Capitalism and a better capitalism, where all parties involved in an economic transaction benefit and thrive. A truly successful economy is one where there is a balance of interests and benefits among all participants. When economic mutuality is achieved, it leads to sustainable growth, increased prosperity, and a more equitable distribution of wealth.

Instead of a zero-sum game where we perceive one party's gain must be at another's loss, economic mutuality creates opportunities where all parties involved can win. The result is mutual satisfaction that fosters collaboration, trust, and long-term relationships, which are all essential for building a strong and resilient economy.

Principle Five: Seek First to Understand, Then to be Understood

"When we listen with the intent to understand others, rather than with the intent to reply, we begin true communication and relationship building. Opportunities to then speak openly and to be understood come much more naturally and easily. Seeking to understand takes consideration; seeking to be understood takes courage. Effectiveness lies in balancing and blending the two."

Better Capitalism Application: Understanding Each Others' Economic Needs Is Key to Building Mutuality.

By acknowledging and being concerned with each other's economic needs, businesses and individuals can work together towards common goals and find solutions that benefit everyone. This kind of understanding is needed in every financially-connected relationship, whether employer-employee, buyer-supplier, or corporation-shareholder. Instead of the adversarial posture that so many people bring to the table, empathic listening helps everyone feel heard and also enables the listener to truly understand the other side.

The stories in The 7 Principles of how major business challenges were overcome when everyone took the time to listen are truly remarkable. Understanding each other's economic needs is not only essential for building mutuality but also for establishing strong and lasting relationships based on empathy, cooperation, and mutual support--all essential for the long-term success everyone wants.

Principle Six: Synergize

"Synergistic people seek the third alternative with others--not my way, not your way, but a third way that is better than either of us would come up with individually. Synergy is the fruit of respecting, valuing, and even celebrating one another's differences. It's about solving problems, seizing opportunities, and working out differences."

Better Capitalism Application: When We Work Together, Amazing Changes Can Happen in Our Economy.

When individuals, businesses, and governments come together with a shared vision and common goals, positive change become possible. This collaborative approach not only fosters economic prosperity but also promotes sustained wellbeing for all of us. And the power of collective action extends beyond immediate economic outcomes. It can lead to the creation of new industries, the revitalization of struggling sectors, and the establishment of a more equitable and inclusive economic system.

By working together, we can shape a future where prosperity increases exponentially. Think of the example of two ropes being stronger together than they would be when separate. The potential for positive changes in our economy will definitely take effort and a new mindset for many people; but it is achievable. This is the ultimate message of the book Better Capitalism: a sustainable, prosperous, and inclusive economy is not only possible but already being achieved where these ideas are being implemented.

Principle Seven: Sharpen the Saw

"Effective people constantly renew themselves in the four basic areas of life: physical, social/emotional, mental, and spiritual. This increases their capacity to live all other habits of effectiveness."

Better Capitalism Application: Achieving a Better Capitalism Is an On-Going Process.

The quest for a better capitalism involves a continuous effort to address issues such as income inequality, environmental sustainability, and social responsibility. This ongoing process requires everyone to work together to find solutions that promote economic growth while ensuring fairness and equity for all members of society.

One key aspect of improving capitalism is through the promotion of ethical business practices. By incorporating ethical considerations into their operations, businesses can contribute to a more equitable and sustainable economic system. Fostering innovation and entrepreneurship is also crucial for advancing capitalism towards a more sustainable and equitable future. By encouraging creativity and supporting small businesses and startups, economies can drive growth and create opportunities for individuals to succeed and thrive.

Ultimately, achieving a better capitalism is a complex and multifaceted process that requires collaboration, innovation, and a commitment to creating a more just and sustainable economic system for the benefit of all, particularly those who actively participate.

Summary

At this time in my life, I am truly beginning to see the connections between teachings that I wouldn't have earlier on. Hopefully, you too now see the parallels between The 7 Principles and Better Capitalism, as well as the ties between both of these writings and that of other teachings. Though not specifically religious in nature, both books are rooted in some of the most important spiritual mandates that exist, such as love your neighbor as yourself (Mark 12:30-31) and let each of you look out not only for his own interests, but also for the interests of others (Philippians 2:4).

I encourage you to explore both of these books and discover the similarities for yourself. If you do, I believe they can have a profound impact on your outlook and decisions; and in return, impact the world around you for the better.

Tired of "profit is evil" vs "maximize my profit by exploiting others," as if those are the only two options?

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"This book merits close, sustained attention as a compelling move beyond both careless thinking and easy ideology."—Walter Brueggemann, Columbia Theological Seminary

"Better Capitalism is a sincere search for a better world."—Cato Institute