Among other things, and the BIG thing I am working on now is a re-write of the New Capitalism book.
So, why am I re-writing? That book had already been through several revisions and it took me a while to realize that the one important idea in that book, the idea that could make a real difference, is the redefinition of capital or capitalism, in terms of the five forms of capital: spiritual, social, human, technology or process, and financial. As I have presented this to management groups, this is the important idea, not the nine principles in the front of the book. But, the five forms of capital model is buried toward the back. Not good.
Second, it dawned on me (hey, I’m slow sometimes!) that my Barbarians to Bureaucrats life cycle model has everything to do with these five forms of capital. In the early days of a civilization or corporation, the “wealth” or “capital” of the human spirit and values, spiritual capital is strong; while financial capital and other forms of capital are just beginning to develop. In the later days, the reverse is true. A simple idea perhaps, but with significant implications for how we measure our success, develop strategic plans, etc. Here are two diagrams that I hope tell the much of the story.
This is intended to illustrate the relative measure or capacity in terms of each form of capital, in this case, in the Bureaucratic stage, after the company is well down the life cycle curve.
The following is meant to illustrate a potential curve for each of the forms of capital at the different stages of development of the culture. Of course, every company is different and no one pattern can apply to every organization. Some companies are born with a lot of financial capital and then go looking for some technical or process innovation on which to build a business. However, it is more common for some entrepreneur to develop an innovation (Google, Facebook, etc.) then go looking for financial capital or build financial capital from operations. It is simply a way of illustrating the progress, and decline, of capital through the cycle.
And, for those of you who might say, “Hey, wait a minute, I already bought the New Capitalism book and now your revising it??!!!” Relax… when the new book is available, I will be happy to replace the old version you have with the new one. Free.