Crain’s asked a handful of Chicago business leaders for their take on what working life will look like after the pandemic-and what steps the corporate and civic community must take now to ensure the best possible outcomes for all Chicagoans. Here, Kip Kirkpatrick of private-equity firm Vistria weighs in.
I would not blame you if, in these difficult times, you weren’t overly concerned about the future of capitalism. There are more important things to worry about right now. But while it’s a luxury to opine about, it’s a conversation worth having as our region prepares for its comeback. After all, an era of more responsible corporate citizenship and impact investing has already begun, and reinforcing this work will be a critical component in rebuilding our region’s economy.
The outlook for capitalism is murky at best. A recent Gallup survey found only 51 percent of 18- to 39-year-olds had a favorable view of capitalism, down from 66 percent in 2010. A 2019 Deloitte study, meanwhile, found that the number of millennials who believe business should try to improve society is twice the number who believe that it actually does.
Maybe all of this was inevitable. There is no doubt the private sector has been vilified by critics who point to an unfortunate number of high-profile corporate scandals. Yet even the most charitable interpretation of the last few decades finds a corporate sector that has, at worst, put private profits over public purpose and at best been blind to the erosion of the American ideal. It should not go unnoticed that many of today’s “essential” workers are the very people who have been hurt the most by these practices and systemic oversights.
For those of us who believe in capitalism, we are past the “business as usual” moment. But I am optimistic about the path forward.
Recognizing that the status quo is unsustainable, a new generation of investors is demanding to know exactly how their money is being used and what impact their investments are having. This next generation isn’t looking to make a difference simply because it’s the right thing to do; it is because they know that companies that create a strong, scalable social benefit are inherently more valuable. The businesses that remain steadfast as responsible players invested in a long-term mutual value proposition with society will be celebrated-by their employees, by their communities, by their customers and, yes, by their shareholders.
There is no trade-off.
As we look to rebuild in our post-COVID world, we’re finding socially conscious entrepreneurs leading the economic recovery by adapting quickly and finding market-based solutions to society’s biggest problems. Just look to the work being done in online learning and telehealth-both privately backed, once-periphery mediums thrust into the mainstream.
The private-sector response to the policy objectives of quality education and health care can provide blue- prints for a more responsible capitalism. This framework requires a “do no harm” approach to everyday business alongside a commitment to providing benefits to the broadest group of stakeholders possible. The best incentive to build on is the exponential value (in dollars and impact) when we embrace the opportunity to collaborate for the greater good.
As we reset for a post-COVID world, and consider the momentum that impact investing has gained recently, let’s continue to raise the bar on what it means to be a good company. The goal is not to return to a “normal” that wasn’t working for far too many. The goal should be to imagine, and create, a new normal that is better, fairer and more just for everyone. There is no going back.
Kip Kirkpatrick is co-CEO of Vistria, a Chicago-based private-equity firm.