The election confirms it's time for sober reappraisal and reinvention within the business community. If you don't do it, someone else will.

This column is dedicated to the top managers of American business whose policies and practices helped ensure Barack Obama's victory. The mandate for change that sounded across this country is not limited to our new President and Congress. That bell also tolls for you. Obama's triumph was ignited in part by your failure to understand and respect your own consumers, customers, employees, and end users. The despair that fueled America's yearning for change and hope grew to maturity in your garden.

Millions of Americans heard President-elect Obama painfully recall his sense of frustration, powerlessness, and outrage when his mother's health insurer refused to cover her cancer treatments. Worse still, every one of them knew exactly how he felt. That long-simmering indignation is by now the defining experience of every consumer of health care, mortgages, insurance, travel, and financial services - the list goes on.

Obama was elected not only because many Americans feel betrayed and abandoned by their government but because those feelings finally converged with their sense of betrayal at the hands of Corporate America. Their experiences as consumers and as citizens joined to create a wave of revolt against the status quo - as occurred in the American Revolution. Be wary of those who counsel business as usual. This post-election period is a turning point for the business community. It demands an attitude of sober reappraisal and a disposition toward fundamental reinvention. If you don't do it, someone else will.

The Seeds of Despair

Long before the dark bloom of this economic crisis, our businesses were broken. An indicator of this disrepair was the almost complete loss of trust that Americans expressed toward business and its leaders. This had not always been the case.

After World War II and right through most of the 1970s, American businesses understood themselves as part of the social fabric. In the mid-1950s, 80% of U.S. adults said that Big Business was a good thing for the country, and 76% believed that business required little or no change (Roper, August, 1954). Business was lauded for job creation, its effectiveness as a mass producer, the development and improvement of products, payment of big taxes, and support of education (University of Michigan Survey Research Center, July, 1951).

In 1966 55% of Americans had a great deal of confidence in the leaders of big companies (Harris Poll #22, Feb. 28, 2008). By 2006 only 5% of Americans said corporations do right by their consumers and only 7% voiced a high degree of trust in corporate leaders (Lichtman/Zogby, May, 2006). In those 40 years an unbridgeable chasm had opened between corporations and the people who depend upon them as employees and consumers. What happened to the trust? Unlike the illusory wealth of financial engineering, it didn't vanish overnight. It was worn down, agonizing step by step, over decades.

A Giant Money Machine

About 30 years ago, the socially embedded corporation of the post-World War II period was reconceived as a giant money machine. This started innocently enough. As global competition began to affect American industries, many wondered how to make managers more accountable for the firm's performance. The idea was that managers were not acting in shareholders' interests to maximize profits. Theorists suggested all kinds of reasons why this might be so, from inertia and self-interest to community loyalty and even "honor."

One solution eventually dominated all others: markets for corporate control. A new breed of activist investors led tender offers, often hostile, to take over companies whose share prices were regarded as underperforming. Most stockholders responded simply by choosing the highest offer. Leveraging up debt and driving new economies of scale by combining or reorganizing resources were seen as ways to impose discipline on teams of managers and limit their divergence from shareholder-wealth maximization. New compensation and incentive systems linked executive pay to the performance of the company's stock price.

The company became a transaction machine designed to maximize profit, untethered from its community, society, and country. Jobs were outsourced, work was automated, assets were concentrated, costs were cut to the bone, and balance sheets depended on increasingly arcane financial engineering. Takeovers gave way to mergers. Industries consolidated, limiting consumer choice. The inward focus to which management had always been vulnerable became pathological, banishing the needs of customers and employees to a distant horizon. Job security became tenuous, and most families depended on two incomes. A large majority of employees wanted more flexibility at work than their employers allowed. Working parents, and especially mothers, foundered. Customers were treated as anonymous and expendable.

Yes, productivity rose. But the mechanisms once in place to share those benefits had been battered by years of trickle-down tax policy and successful corporate lobbying. Instead, executive compensation soared, along with the fortunes of a new class of financial specialists who identified and facilitated these deals.

Along the way, this new model of success migrated to every corner of the public and private landscape: government agencies, hospitals, doctors' offices, schools. If you have ever wondered why you can only spend seven minutes with your doctor, why hospitals measure their success by the number of beds they fill, or why you can't find anyone in a government agency to help you - this is the reason.

The Erosion of Trust

During these same decades, Americans were becoming better educated and more opinionated. They were traveling and participating in the new information society. Access to information, connection, and communication exploded with the Internet. Americans experienced themselves as unique and complex individuals who wanted their voices heard - just as the businesses they depended upon were becoming more ruthless, remote, gigantic, and impersonal. The result was an epidemic of stress and a precipitous erosion of trust toward just about every kind of organization, but especially those businesses upon which people most depended - health care, insurance, financial services, transportation, housing, telecommunications, media.

In The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, my co-author, Jim Maxmin, and I argued that this failure of trust spelled the end of one episode of capitalism but framed the opportunities for a new era of wealth creation. When faced with a true choice, consumers will give their allegiance and cash to advocates who offer trustworthy relationships intended to support their complex needs rather than to distant adversaries who offer only impersonal transactions.

The challenge is to change the way we organize assets and leverage technologies so it's possible to address individual needs at an affordable price. We described a Copernican inversion in business, one that puts the consumer at the center of the commercial solar system in much the same way that Apple's (AAPL) iPod and iTunes put the music listener at the center of a newly configured music industry. This means historic opportunities for a new kind of competitor.

While our analysis was embraced in many parts of the world, we found American managers doggedly indifferent to the crisis of trust. They felt immune to its consequences. For one thing, nearly all competitors in most industries operated the same way. And as long as consumers had no real choices, there was little pressure to change. Most managers regarded the practices of the money machine as inevitable and could imagine no alternative. They also knew that people are typically just too time-starved and hassled to raise much of a fuss. Finally, there was a sense that as long as Americans had access to cheap credit and continued to spend, there was nothing to worry about.

Yes We Must

As recently as this summer, while the economy unraveled (BusinessWeek, 7/14/08), I made two trips to Silicon Valley in the hopes of finding leaders who grasped the crisis - and the opportunity - inherent in the destruction of trust. I listened to Facebook executives but found them obsessed with how to monetize the site with advertising. Their users were not individuals, but "eyeballs." I asked Google (GOOG) CEO Eric Schmidt how he would develop and sustain the trust of his users. His response was to cite the provision of two classes of stock intended to insulate top management from investor pressures. I gave a talk on the crisis of trust. The response from self-described Internet court jester Esther Dyson was typical of what I had been hearing: "Personally, I'm not that concerned if people don't trust large institutions."

A few weeks later economic panic gripped the stock market. I flipped on ABC's Sunday morning news show with George Stephanopoulos only to hear economist Larry Summers explaining that the surprising depth of the economic meltdown was due to the loss of trust in institutions. What he didn't say was that this loss of trust is a vast sea whose level has been rising for decades. The subprime debacle and the ensuing credit freeze simply marked the moment when the sea wall was finally breached.

Tens of thousands gathered in Grant Park on the evening of Nov. 4 to hear President-elect Barack Obama. The faces turned toward him were animated - not by surprise, but by recognition. Their needs, yearnings, and injuries had been ignored for so long. Finally there was one man speaking their shared experience of betrayal and their shared hope for renewal. The path to reinventing American business was written on the faces of those gathered there that night. They know exactly what must be done.

So can we invent a business model in which advocacy, support, authenticity, trust, relationship, and profit are linked? Can I write that sentence without invoking fear, disbelief, cynicism, or peals of laughter? The ugly practices that killed trust seem intractable to most people, whether they are the ones trapped inside the money machine or on the receiving end of its operations. But after this election, the answer to these questions has irreversibly changed. The answer today would have to be not only "yes we can" but also "yes we must."