What is Participatory Capitalism?
The Macmillan Dictionary defines participatory as allowing or encouraging everyone to take part in something. The Collins English Dictionary says that capitalism is an economic and political system in which property, business, and industry are owned by private individuals. So, one can properly assume that participatory capitalism is encouraging everyone to take part in an economic and political system in which property, business, and industry are owned by private individuals.
In the previous paragraph, two words stand out. They are “take part”. To take part means at least two things. It means to take (or come to possess), as individuals, part of the ownership of the company. And it also means to be actively involved.
Active involvement ties directly back to common company values such as: 1) trust comes first; 2) take initiative; 3) act thoughtfully; 4) show empathy; 5) make things better; and 6) be dependable. Every one of these values speaks to active involvement and taking part in the building of value.
Employee ownership has a long tradition in many countries. Many professional organizations (investment banks, consulting firms, engineering companies, accountancies, and law offices) are owned by top practitioners at the entities. Participatory Capitalism goes further by building broad-based employee ownership – where anyone who has been at the company for a year or more gets partial ownership.
Participatory Capitalism includes using collaborative management, which entails active involvement, taking part in decision-making, and responsibility for the stewardship that comes with ownership. Collaborative management means that everyone has access to information and tools that make it possible to take tough decisions and move forward with ways to work better.
All of us have probably taken better care of something that we have owned, as compared to how we cared for something we rented. On the one hand, this begins to explain the power of employee ownership. But, owning a company collectively is different than owning something individually. Joint ownership is usually more complicated. Working together and making sacrifices for the team is often hard.
But the broad rewards that come from being owners can be large, creating worker owners who are participating fully and building something special. In addition, when people feel ownership, develop knowledge, and learn leadership skills, they become potential community leaders.
In the end, values and value are what we want to bring to businesses, communities, and our broader stakeholders. If we all take part, effectively, it is possible to create new industries that save jobs and engineer exit opportunities for retiring owners who would have otherwise liquidated their companies.
Participatory capitalism is a new expression. It mixes technology, employee ownership, open book management and an approach to education, which are practical and meaningful. Traditional capitalism is in danger and it needs reimagining through Participatory Capitalism.