Profit for Life: How Capitalism Excels
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Research Update: Companies that Mimic Life
The Global LAMP Index® - comprised of companies that mimic living systems in the ways they are organized and managed - had another outstanding year in 2007. This learning lab, which provided the data for Jay Bragdon's book, Profit for Life, validates SoL's belief that such corporate cultures nurture extraordinary learning and adaptation. Northfield Information Services, which verified these LAMP results, says they are both economically and statistically significant.
Global LAMP Index® Performance
Average Annual Returns for periods ending 12/31/07
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Global LAMP Index®
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Standard & Poor's Indices
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Period
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Equal Wt.
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Market Wt.
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S&P 500
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Global 100
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1 Year
|
9.63
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12.17
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5.49
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8.41
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3 Years
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14.33
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12.25
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8.72
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11.42
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5 Years
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20.62
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16.45
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13.15
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15.07
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10 Years
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17.14
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12.01
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7.23
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8.39
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Sources: Northfield Information Services (www.northinfo,com) for LAMP results, and Standard & Poor's for comparator results. LAMP returns are shown on both an equal-weighted basis and on a market capitalization-weighted basis. There has been only one change in LAMP's composition during this period - due to a corporate takeover. There can be no assurance that returns shown on this table will continue.
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Two fundamentally different models of capitalism are operating in the business world today. One is self-destructive and increasingly corrupt. The other is emergent, flourishing, and inspirational. The essential differences between the two are not well understood, although global stock and bond markets see clear differences in their results. In Profit for Life, Jay Bragdon explains those essential differences, and reveals the extraordinary results of the more successful model.
The book's title conveys an important message. Firms that aim to profit for life must respect life. For them, profit is not a primary goal but a means to higher ends of service. They think and behave in ways that continually affirm life-from their corporate missions, visions, and values to the ways they are organized and managed. Their operating leverage resides in their capacity to inspire. Profit for Life explains why these exemplars attract the most loyal employees, strategic partners, customers, and investors.
Bragdon draws a clear line of demarcation between these two mental models. The emergent model sees the company as an organic, living system whose primary means of growth are living assets (people and Nature). Their growth strategies naturally emphasize stewardship of living assets-serving people and Nature. The decaying model, by contrast, sees the firm as a profit-making machine whose growth is driven by nonliving (capital) assets. Accordingly, their strategies look to increase the scale of capital assets.
These differing frames of reference take companies in radically different directions. Living-asset stewards think holistically-in terms of partnering with Nature and society-because they know their health is ultimately tied to the well-being of these larger living systems. Conversely, those wedded to the mechanistic model dismiss many of their effects on Nature and society as "externalities"-diversions from their linear goals of producing profit. These differences are particularly evident in their respective metric systems and the ways they manage their supply chains.
