What on Earth are we Doing Here?
The objective of a for-profit entity is to make a profit or in academic terms, to 'maximize shareholder/stakeholder value.' Coming from a publicly traded corporate background, I understand that, as I think we all do. Even a not-for-profit or a non-profit entity has to have its income at least match it's expenses but is that all? Is that the only reason why we do what we do at work?
Many organizations have tried to take a more balanced view of looking at the world of commerce over many different generations. I originate from Birmingham, England, where the Cadbury brothers started their chocolate empire and they viewed business a little differently to how entrepreneurs do nowadays. Their mindset was that if they looked after their employees; those employees would reciprocate with hard work and loyalty to the Cadbury family. They provided good compensation, healthy working conditions, and even good quality housing, if needed, close to their factory in Birmingham.
The Cadbury organization was well renowned for paying vendors on time and donating significant amounts of money and time to many charities and well-deserving causes. You could say, in modern parlance, they operated their business to a Balanced Scorecard, well before the term was coined. They measured true business success in their profits; their quality of product; the happiness of their employees; the satisfaction of their vendors, and their positive impact on their communities. The Cadbury family was a highly principled family.
Peter Drucker, the great management thinker, based out of Claremont for many years, also wrote and taught on this broader concept of organizational responsibility. Jjust a couple of decades later, Kaplan and Norton launched their Balanced Scorecard.
With all this knowledge, why do most organizations ignore this balanced approach? I think for publicly traded companies that focus purely on profit it's because of the short-term nature of the stock market. For private companies and other non-profit or not-for-profit entities, I believe most of them falter because they fall into the trap of thinking their status just means they don't pay tax, and so for all intents and purposes, they behave like a for-profit entity.
But you know, I believe it's deeper and more personal than that. I think human beings are innately selfish and when they band together in something called an organization they can easily lose sight of their purpose. Match this innate nature with short-term goals and high rewards, and many men and woman are blinded by the singular focus on profit and their own egotistical agenda as leaders: the vicious cycle continues.
I remember delivering some professional development a few years ago to a very well-known charity. Their culture was without doubt the most cut-throat, ruthless, and toxic I have ever worked with. They were laser-focused on making their numbers. I spent many, many hours with their senior leadership and I never really once heard any reflection on the purpose of their organization. Their purpose looked great represented in the brochures and emotionally moving pictures hanging in the hallway, but just didn't seem to be important to the folks on a day-to-day basis. I think they'd forgotten what was truly important and it was sad, very sad.
Corporations generate tax dollars that help the world work. Educational institutions help create jobs that generate income tax dollars, which help make the world work. Charities fulfill missions to help provide the dollars that tax dollars can't. City, state, and federal governments spend the tax dollars on infrastructure that's needed to enable all of the above to happen. Work seems to work best when we remember we're meant to be working together to serve each other.
I have a very simple view of the purpose of commerce, which is to provide products and services to help people. I believe after it's all said and done, it's about people. History tends to teach us that when we serve people well, (be they customers, employees, or vendors) the entity thrives. History also tends to teach us that when we put profits first, put ourselves first, or lose sight of the purpose of the organization, failure of one type another is not far off.
I think this is why I still like Cadburys chocolate after all these years.
“A corporation is an ingenious device for obtaining individual profit without individual responsibility.” undefined Anon
ABOUT NEWLEAF TRAINING & DEVELOPMENT (newleaf-ca.com)
Newleaf Training and Development (based in Valencia) deliver seminars, keynotes, coaching and online to help people and organizations better manage themselves, lead others and build business financial intelligence.