What’s Really Wrong with Corporate America?
Editor’s Note: This article is from 2012, but is just as relevant today as it was then, if not even more so now.
A common refrain is that the purpose of a business is to maximize profits. It’s obvious that a company has to make a profit to stay in business, grow, and prosper, but I don’t think this should be the main purpose of a company. Most entrepreneurs have some kind of “vision” or bigger reason for starting a company ─ whether it’s to produce a new product that will benefit others or to provide a service they feel they can provide better than others.
What’s wrong with companies today, especially publicly trade corporations, is that they have lost their “soul” ─ their vision or bigger reason for being a company. They have become too focused on the “bottom line” of maximizing profits and forgotten the real reason the company was founded. Our history as a country is filled with men and women of vision who changed the world by the products or services they invented or provided ─ Thomas Edison, Henry Ford, George Westinghouse, and Aaron Montgomery Ward.
Today, you need to be able to provide or add value to have a place in the global supply chain of goods and services. If you don’t provide or add value, you won’t be able to stay in business in the long run. Providing or adding the maximum value possible is the goal behind all of the steps and tools used to become a “Lean Six Sigma” company whether you are a manufacturer of a service provider. You focus on the customer by removing wasted and non-value added steps to become “lean” and reduce variation and improve quality to achieve the “Six Sigma” level.
However, this renewed focus on the customer by becoming a “Lean Six Sigma” enterprise won’t restore the soul of a company. To do this, you need to create or revive the concept of “for the sake of others;” that is, serving others by what you do or make. This is the main concept presented in Dr. Tony Baron’s book, The Art of Servant Leadership. This book shows you how to design or redesign your organization for the sake of others and is “a guidebook on how a private or public company can achieve its true purpose in the world.” The book has a lofty purpose: “To equip, inspire, and encourage those we influence in order to make a profound positive difference in the world.”
In a 1970 Times magazine article, the economist Milton Friedman argued that businesses’ sole purpose is to generate profit for shareholders, as long as it is doing so legally and ethically. In contrast, Dr. Baron believes that the “sole goal of a business is to exist for the sake of others.”
The book provides “a case study of the principles and practices Art Barter used as a servant leader to reform Datron and transform lives inside and outside the company.” Datron World Communications, Inc. (DWC) is a privately owned company located in Vista, California. For over 40 years, Datron has provided tactical military and public safety radio equipment to a diverse worldwide customer base doing business in over 80 countries through an international sales representative network and regional support centers.
Read the full article on TradeReform.org.