This blog was first published in 2019, but given the ongoing trouble companies get into with their buyers values, it is worth republishing.
One of the significant strategy / management consulting focal points over the last few decades has been the idea that shareholder value rains supreme over all other corporate values. The recent pronouncement by the Business Roundtable, representing 181 CEOs, states this is no longer the case, with a broader scope of stakeholders being important. In the words of Roundtable Chair, and JPMorgan Chase CEO, Jamie Dimon: “The American dream is alive, but fraying. 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 Americans.”
For many decades, I have asserted that if the world is going to change, then consumers have to step up and do their bit, they have to make purchasing decisions that reflect their values and their beliefs. They have to support the companies that go about business the way they want them to. What is the alternative, regulation that swings violently from stifling to senseless, from administration to administration? Surely, just like with elected representatives, the ultimate power to determine how businesses conduct business, is in the hands of the consumer, just as George Washington said the great American experiment itself is in the hands of citizens. Ask not what your country can do for you…Ok, I will concede that one of my flaws is I can be a little idealistic sometimes, but I will still stand by the idea that those doing the buying can have a significant impact on those doing the selling.
A few years ago I was on a company-sponsored trip to the Seattle area where a group of high potential individuals were in search of innovation stimulation. We visited a number of local businesses. One of them was a chocolate factory that made prominent pronouncements about how none of the materials for their chocolate were harvested by child laborers, who in turn might be child slaves. It really got under my skin, and I mean in a good way. It really got me thinking about how modern marketing/business, especially startups, are extremely values-oriented, what are the the values of the prospective buyer being targeted. This maybe more dominant/prominent in B2C than B2B, but if you look at the total spectrum of corporate stakeholders (buyers, employees, investors,…) you would have to concede that even in B2B, the values thing, is A thing. More to the point, you must have been living under a rock for the last decade if you did not see that.
One of the concerns is that corporate causes are marketing, window-dressing, or clueless misdirected money that neither enhances shareholder value or achieves the stated ultraistic goals. No question this is a valid conversation. No question that many things in corporate life, business and non-business, amount to window-dressing because they do not command the necessary attention of the leadership team and the employees as a whole. To suggest that community causes cannot fall prey to the same would be naive at best.
However, my non-data based opinion and perception of the times we live in, is not one where CEOs just all rolled out of bed one day, and in unison, decided that the shareholder is not the only stakeholder. My view is they have been observing reality for a while. My view is they have taken note over multiple decades, of a gradual awakening, an emerging understanding that despite your view on the goodness or badness of government, government has its limits, and the destiny of business is in the hands of the consumer. This is especially true in America, where there is nothing more American than the occasional awakening.
The values-driven buyer is definitely among The Important in business today.