The Business Roundtable consisting of 181 CEOs of the largest corporations in America just issued a statement updating their definition of the Purpose of the Corporation. It’s framed as a “Mission Statement”. (Followers of our work will recall that I believe mission statements are redundant and uninspiring – see pages 117-126 of The Bellwether Effect).
Without laying out for you the 307-word statement here, it can be summarized as “An Economy That Serves All Americans”.
In an article in the New York Times on September 13, 1970, Milton Friedman wrote that the sole purpose of a corporation is to increase shareholder value. Since 1997, the Business Roundtable has promoted shareholder primacy as its core purpose.
All this raises some questions:
Most of the members of the Business Roundtable are global organizations, led by some of the smartest and most successful CEOs in the world – why is their “purpose” so insular? Why are we only intending to serve Americans and not all people from the other 195 countries in the world? Why not just replace the word “Americans” with “humanity”?
Why has it taken us hundreds of years to learn that serving people first is what leads to inspiration, fulfilment, meaning and high-performance?
Why are we so slow to learn from wildly successful companies that put people first, like Southwest Airlines, Virgin, Starbucks, Patagonia, The Boston Beer Company, The Container Store, EllisDon, New Belgian Brewing, HCL Technologies and Pella Corporation?
In my work with healthcare organizations, I learned a phrase: “patient centered healthcare”, which was intended to mean that the patient comes first in all decisions. This is a very typical Bellwether Effect statement. How does the nurse feel after being told that he or she is number two and the patient is number one? Although healthcare leaders frequently complain about the shortage of nurses, I always argue that there is no such shortage; we’ve trained many times more nurses than we actually need—there is just a shortage of places where nurses want to work. We could change that by recalibrating our perspective to “people centered healthcare”, which, if lived, would be more inspiring and lead to higher performance, and remove the staff shortages—not just in healthcare, but in any organization.
In my latest book, The Bellwether Effect, I have argued that “the employee is the new customer”. As a leader, are you ensuring that your employees feel valued at least as highly as shareholders and customers? What have you done today to make sure that employees feel appreciated—even loved?