Make sure Your Why for Being in Business is aligned with the King and Queen
Cash is king, still. But I read a statement made by a group of CEOs the other day, in which they sought to dethrone what I might call the queen of business and replace it with another Motivation. These execs declared that profit was no longer their primary goal. And although that’s a most curious statement made by someone hired by someone else who owns the investment these CEOs look after, and for which a return is rightly expected, this new CEO override to fulfill society’s broader needs can’t be dismissed out of hand. It is a new, looming, potential why for the conduct of business.
Granted, when a business makes profit their primary why, and begins to ignore delivering value to customers as the direct why, this kind of motivational mix-up can trigger an early demise. Businesses must first clarify why they want what they want. Then they need to bounce this ‘why’ up against historical evidence that will tell you if what you propose is going to work. Fundamentally, if you deliver value you earn the right to capture value – profit – for your company.
Critics of all stripes panned the CEO letter. But the Council of Institutional Investors got it most right when they said it’s the elected government that is responsible for deciding how to satisfy what society needs. The ballot box determines whether they get it right. A business that pretends to be accountable to everyone, a la this CEO proclamation, would be accountable to no one.
The 180 CEO signatories put forward a why that, first of all, wasn’t theirs to make, and secondly, a why that they would not be able to make work. A most curious public posturing for what you would otherwise expect from a rather pragmatic bunch of people.
The morale of this business story? There’s a reason that cash is still king and profit is still queen. What keeps this royalty on the throne is the recognition that each business must base its why on their customer’s why. The queen’s tribute is derived only from the delivery of value. And that of the king? From the prudent management of resources in pursuit of that delivered customer value. If some business leaders want to crown a new motivation they will need to sell to those they serve how they’re going to make that why work.