Sir Lynton Crosby, CT Group Executive Chairman, on the Case for Capitalism

By Exec-Edge Editorial Staff

Sir Lynton Crosby has spent four decades reading public opinion for people who couldn’t afford to get it wrong — prime ministers, presidents, and the boards of some of the world’s largest companies. As Executive Chairman of CT Group, the research and strategy firm he co-founded, Crosby has built one of the most quietly influential shops in political and corporate consulting, with offices across eight countries and a client roster that spans government, industry, and advocacy. In recent years, CT Group has turned its research apparatus toward a subject closer to home for the business community it serves: capitalism itself, and why the system’s public standing hasn’t kept pace with its performance. We spoke with Crosby about what the firm’s research found, and what it means for how business leaders talk about the system they operate in.

Exec Edge: CT Group ran a large-scale study on public attitudes toward capitalism. What prompted that?

We had seen a number of signals that some of the trending narratives on how the public felt about the predominant economic system were misleading. But we don’t operate on feelings, but instead we respond to data, so we tested it. There’s a narrative that’s taken hold since the financial crisis — that the public has simply given up on capitalism, that a decade of scandals and populist politics has turned the average voter against the system outright. We fielded a nationally representative survey of 3,000 people, backed by focus groups, to find out if that was actually true or if something more specific was going on. It turned out to be the latter.

Exec Edge: What did the research actually find?

Among those polled, you can see that people aren’t rejecting capitalism. But they’re also not enthusiastic about it. Those are two very different problems that call for two very different responses. Net favourability for capitalism sat at -2%, which put it in roughly the same polarising territory as socialism. But when we asked people whether they’d support capitalism as the system running the economy, that number came in ten points higher, at +8%. People don’t necessarily like the word. They still back the outcome. One woman in our London groups told us she was, in her words, “in the machine” — she rents from a private landlord, works for a private company, benefits from the system whether she loves it or not, and hasn’t seen another model do any better. That’s a public waiting to be persuaded, not one that’s made up its mind against you. So we have a classic messaging gap here – there is a need for better communication.

Exec Edge: If the public is persuadable, why isn’t business winning that argument already?

Because business has spent years making the case to itself instead of to the public. We ran a correspondence analysis mapping which attributes people associate with capitalism versus socialism, and the strongest association by far was “good for business.” That’s not a message that resonates like it used to. Voters aren’t focusing on what the private sector does to enhance wealth and prosperity for people vs. other systems of state control, which frankly, have an abundant record of social failure that most choose to ignore.

What we are seeing is that corporate messaging is not focused enough on personally relevant issues like jobs and wages, and it nearly disappears on the things that actually change someone’s life — social mobility, standard of living, the sense that effort leads somewhere. Capitalism is, in practice, the reason most working people have a job and a wage in the first place. Very few of them connect that fact back to the word “capitalism.” The businesses making the “good for business” case are talking past their own audience.

Exec Edge: Your research also looked at how the public views business’s obligations. What did you find there?

A clear majority told us business is currently, in practice, answerable to shareholders and owners first. Ask who business should be answerable to, and the circle widens considerably, to customers, employees, and the wider community. We tested stakeholder and shareholder models head-on, using the underlying definitions rather than the labels, and 60% of respondents preferred the stakeholder version — across every group we cut the data by, including people who describe themselves as capitalists. That gap between “who business answers to” and “who business should answer to” is where a lot of the public’s skepticism actually lives.

Exec Edge: Does that mean the public wants a fundamentally different economic model?

No, and this is where a lot of executives get nervous for the wrong reason. Strong majorities told us economic growth and social accountability aren’t a binary choice, that a company can pursue both at once. Fifty-nine percent want business more regulated than it currently is, mainly because they believe big companies dodge tax and don’t put enough back into the places they operate. What we didn’t find was any real appetite for socialism as an alternative — it’s the only other system that comes up unprompted, and when we pushed on it, people associate it with higher prices, capped wages, and bureaucracy. The public wants capitalism with guardrails and a government willing to enforce them, not a different system altogether.

Exec Edge: What arguments actually move public opinion, based on the message testing you ran?

The arguments that build support all centre on an individual: the freedom and opportunity for someone who works hard to get ahead, better prices and more choice for the consumer, a stronger economy funding the schools and hospitals people use. None of the strongest performers mention shareholders once. On the other side, the arguments that do the most damage are about excess without limits — unchecked consumption, companies “doing whatever they want,” a system with no floor for the vulnerable. Businesses that lead with scale and shareholder value are leaving their best arguments on the table.

Exec Edge: What would you tell a CEO or communications chief who wants to apply this?

Lead with the person, not the balance sheet — the employee whose wage depends on the business, the customer who benefits from competition, the family whose living standards rise when the economy grows. Don’t dodge the regulation conversation; our data says the public reads a willingness to be regulated as evidence a company takes its role seriously, not as a concession of weakness. And retire language that’s stopped meaning anything to the people hearing it. “Shareholder” tested worse than “stakeholder” across our sample, including among people who technically are shareholders through a pension. If a word is losing you the room before you’ve made your argument, it’s the wrong word.

Exec Edge: Last question — what’s the single biggest mistake you see businesses make in this debate?

Treating one good quarter of messaging as the job done. Our research showed that when people are given time to actually weigh the arguments for and against capitalism, their views don’t soften, they harden, in whichever direction the more consistent argument pointed them. That’s message discipline in a nutshell — the same true story about who this system actually benefits, told the same way, by people who believe it, long after the news cycle that prompted the question has moved on. The data says the public is prepared to be convinced. Most businesses just haven’t held up their end of the conversation long enough for it to work.