People Over Profit: The Business Roundtable’s Statement Explained
Yesterday, we reported on the news that the Business Roundtable, a group of nearly 200 CEOs of the largest corporations in the U.S. were no longer putting shareholder profit atop their list of priorities. What came as a surprise to a number of news pundits was less than surprising to me, as I’d taken note of the noticeable curve toward other priorities in business, even from the largest, most stuck-in-their-ways giants of the business field. If you’re unaware of the story, feel free to have a read of the hyperlink above before continuing on with this piece.
The importance of the statement put out by 181 CEOs of some of the world’s largest companies should not be understated- it’s massive. You’ve got Amazon’s Jeff Bezos, Apple’s Tim Cook, as well as the heads of J.P Morgan Chase, Boeing, Walmart, General Motors- essentially the cream of the American business crop all in agreement that shareholder value is no longer the key concern of doing business in 2019. None other than the CEO of JP Morgan Chase, Jamie Dimon said that “major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all.”
“Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.” Jamie Dimon, CEO of JP Morgan Chase.
This is not a soapbox, nor is it an attempt to blow my own horn, however… I will state for the record that what these CEOs released a statement on in the past week encompasses what I’ve been trying to teach other business figures I come in contact with for literally decades now: the best means of prioritising in your organisation puts people in front of profit. It is my belief that equitably balancing all stakeholder’s interests in an organisation creates the most sustainable pathway to the future for that organisation. You can either have old-school priorities where you put either shareholders, customers or staff in front of others, or you can step up and tackle the challenge of deploying equality and empathy to all stakeholders in your organisation.
It’s a delicate tightrope to navigate, but ensuring you don’t become obsessed with profit and beginning to invest in your internal resources - your staff - to better supply your external stakeholders - your customers - is one of the most stable means of creating a positive feedback cycle that ensures your company remains profitable and growth-driven.
I’m sometimes dismissed by the leaders of organisations that I consult with when it comes to this ideology; it’s not the first thing taught in business studies, that’s for sure. It doesn’t necessarily apply to the peer-reviewed economic papers that have been published, but it is a rapidly emerging school of thought that has been picked up by non-other than some of the world’s largest companies. In previous posts, I’ve talked about the importance of removing the hierarchy in your organisation, deploying more empathy and taking an appreciative inquiry approach to improving your organisation- all of which focus on deploying a new-school way of thinking in your organisation.
This entails some commitment on the part of the leadership team in trusting that the empowering of staff, be it through increased flexibility, added training or more empathy from the management team materialises in increased productivity from those staff members, which helps your organisation become more efficient, and thus, profitable.
There’s no doubt in my mind now that the Business Roundtable have made their announcement, a number of management teams and business leaders will be following their moves and beginning to implement new policies of investing more in their people, looking for ethical supply chains and delivering more value to their customers. The one thing that sticks out in my mind is that those leaders in question are a little bit behind the curve in terms of early innovation, and hopefully their competitors haven’t overtaken them in the dynamic world of business that we operate in today.
In light of this, I’m going to kick off a new thread of content here on our blog, reiterating our belief when it comes to the major findings of the Business Roundtable, as well as showcasing how bad it can get for organisations that don’t take these business principles seriously. It is my hope that this thread of content will either reaffirm your belief that you’re well equipped on your journey to success, or convince you of possible new ways to do business, with an added emphasis on things you might have been glossing over previously like investing in your employees.
Investing in your people is, quite simply, the best investment you'll make; you'll see it paying dividends in ways you thought weren't possible.
I’m excited to have you on this new thread of content, and I’ll see you in the next piece.