How to Tap the Competitive Advantage of Being ‘Bad’

We live in an age of goody-goody business. Companies wear their compassion on their sleeves in the form of ever more elaborate rainbow flags and inclusivity statements. Shareholder capitalism has been replaced by a lengthy list of virtue-signaling successors: “shared value capitalism” (Michael Porter), “conscious capitalism” (John Mackey) “compassionate capitalism” (Marc Benioff), inclusive capitalism (Lynn de Rothschild) and ESG- and DEI-flavored capitalism (almost everyone).

Driving all these buzzwords, manifestos and TED talks is the idea that the best way to do well is to do good. Doing good boosts profits by producing happy workers and delirious customers. Doing “bad” does the opposite by alienating workers and poisoning customer relations. People, profits and planet can fructify all at once.

But what about people who think that this is all twaddle? A select group of business leaders and companies have put their money on being “bad.” This does not necessarily mean being “bad” in a moral sense — hence the quotation marks — but rather ignoring or flouting the conventions of polite society. The most basic case for this is market differentiation: If everyone else is trying to be “good” then it makes sense to swim in the blue ocean of “bad.” There is also a simpler business case: Being “bad” can be a good way to motivate employees and identify customers.

Elon Musk and Peter Thiel both love scandalizing polite society, rather like naughty boys who surreptitiously release rats into a polite dinner party. Musk rails against the “woke mind-virus.” Thiel says that he no longer thinks that democracy and freedom are compatible. Charles Koch, perhaps the most successful US CEO for the past few decades, has devoted billions to fighting what he regards as climate-change hysteria.

Michael O’Leary, the CEO of Ryanair, Europe’s biggest budget airline, prides himself on his offensiveness — he calls passengers who fail to print out their boarding passes (thereby incurring a £60 fine) “stupid” and says that he would like to charge for the use of the lavatory. “One of the weaknesses of the company now is it is a bit cheap and cheerful and overtly nasty,” he once said, “and that reflects my personality.” Anna Wintour, the global editorial director of Condé Nast and queen of the fashion industry, is so hard to work for that one of her assistants wrote a book-turned-film about her called The Devil Wears Prada.

Some of the world’s best companies relish their “bad boy” image: Think of Exxon Mobil Corp. or Glencore Plc or Koch Industries Inc. in the oil-and-commodities sector or News Corp. in the media business, all of which seem happy to join in the Millwall Football supporters’ favorite anthem, “no one likes us, we don’t care.” Goldman Sachs Group Inc. has recently tried to woke-wash its public image, but the reality remains the same: You do not bank with Goldman because you think it’s nice but because you know that it’s populated by hard-nosed people utterly dedicated to money-making.