American capitalism is in dire straits, caught in a perilous pattern of increasing volatility, decreasing investor returns, and ongoing bad behavior by executives. And it's getting worse. Since the turn of the twenty-first century, we've seen two massive value-destroying market meltdowns and a string of ethics breaches, including accounting scandals, options-backdating schemes, and the subprime mortgage debacle.
Just what is going on here? Is it the inevitable decline of the American economy? Is it the new normal in a technology-enabled global marketplace? Or is it possible that the very theories we've embraced to underpin our capital markets are actually producing these crises?
In Fixing the Game
, Roger Martin reveals the culprit behind the sorry state of American capitalism: our deep and abiding commitment to the idea that the purpose of the firm is to maximize shareholder value. This theory has led to a massive growth in stock-based compensation for executives and, through this, to a naive and wrongheaded linking of the real market--the business of designing, making, and selling products and services--with the expectations market--the business of trading stocks, options, and complex derivatives. Martin shows how this tight coupling has been engineered and lays out its results: a single-minded focus on the expectations market that will continue driving us from crisis to crisis--unless we act now.
Using the National Football League as his primary example, Martin illustrates that it is possible to take a much more thoughtful and effective approach than we now do to the intersection of the real and the expectations markets and to governance in general in the capital markets. Martin shows how we can act to end the destructive cycle, including:
- Restructuring executive compensation to focus entirely on the real market, not the expectations market
- Rethinking the meaning of board governance and role of board members
- Reining in the power of hedge funds and monopoly pension funds
Concise, hard-hitting, and entertaining, Fixing the Game
advocates seizing American capitalism from the jaws of the expectations market and planting it firmly in the real market--and it presents the steps we must take now to do so.
JACK COVERT SELECTS: Getting Beyond Better: How Social Entrepreneurship Works
Posted October 29, 2015, 12:16 PM with category of Innovation & Creativity
Roger L. Martin & Sally R. Osberg define and document the growing field of social entrepreneurship.
JACK COVERT SELECTS: Well-Designed: How to Use Empathy to Create Products People Love
Posted November 14, 2014, 12:02 PM with category of Innovation & Creativity
There’s a difference between designing products with your customer in mind and designing products born from thoughtfully developed empathy with your customer.
NEWS & OPINION: The Category Winners for the 2011 Business Book Awards
Posted January 10, 2012, 8:11 PM with category of Management & Workplace Culture
The time has come! Drum roll, please. .
NEWS & OPINION: 2011 Business Book Awards: The Short List
Posted January 4, 2012, 7:40 PM with category of Management & Workplace Culture
What was the Best Business Book written in 2011? Watch this 90 second video and find out more.
Ok, so we didn't tell you what the best book was.
NEWS & OPINION: Introducing the Candidates: Entrepreneurship & Finance
Posted December 21, 2011, 2:07 PM with category of Management & Workplace Culture
Over the course of this week, we will be introducing, by category, the candidates for the 2011 800-CEO-READ Business Book Awards. Even though only one of the candidates can win the big prize, good business books deserve an audience, and perhaps one on this list will be the winning book. .