The primary purpose of an organisation – even in commercial business – should not be to make profits or provide returns to shareholders.
I’m not suggesting for a moment that profits and returns aren’t a significant factor – but as usual I’m trying to say precisely what I mean.
I’m talking about the ‘primary’ purpose – the primary reason that the organisation exists, the need it serves and the true purpose which it intends will engage and galvanise its people to give their best efforts.
Making profits and returns should always be a vicarious by-product of delivering that primary purpose effectively and well.
We create organisations to satisfy a wide range of needs, including those of customers and a market who require our products & services, the community which needs gainful employment, our supply chain who want sustainable business and a society at large that benefits from our taxes and from the business revenues we cause throughout our sphere of influence.
In recent decades, this network of stakeholders and influences seems to have been trumped (ouch) by the drive solely to focus on financial gains. Some of that comes from the growth in influence of the ‘City’ and stock market, some from the focus of successive Governments on wealth-creation (and often for the few rather than the many) and some from the increasing influence of finance and marketing in our strategic leadership.
In addition, for more than 30 years we have encouraged the belief that an MBA (a Masters in Business Administration for those unfamiliar) is the calling card into a senior management career ladder or a role as a business consultant, with its focus on financial and market measures and the mantra of ‘efficiency’. We have routinely populated our boards and executive teams with people from accountancy and marketing backgrounds. We have, as I’ve said repeatedly for decades, allowed most of our leaders at every level to be accidental amateurs with no expectation that they must be professional qualified in the role, even though we insist that all our other ‘professionals’ – architects, surveyors, lawyers, teachers, dentists, accountants, HR and Marketing managers – even the person installing our central heating – must be qualified to be allowed to operate and must maintain their knowledge through annual CPD.
If one looks at this from an objective and analytical standpoint, it is frankly ludicrous.
We have deliberately created an environment which thinks profit is king and the shareholder rules. We have even enshrined it in law in the role of a director. To imagine that we can in some way ‘superimpose’ the drive I propose – for engagement and a people-focus, for an ethical mindset, for the greater good – in such a financially driven culture might seem at best naïve and perhaps even slightly mad.
But then there’s Climate Change. There’s Me Too. There’s Black Lives Matter. There’s the huge increase in male suicides. There’s a generation of socially aware Millennials entering the workforce.
And then into this volatile mix we add a global pandemic.
More than a year of WFH, of isolation, of lockdown, of illness, death, fear, of re-shaped lives and even a new view of work.
Just perhaps the world has now been sufficiently knocked off-kilter that we can start to look more closely at this mad treadmill we have created. A treadmill that generates huge amounts of money predominantly for those who already have huge amounts of money. A culture that thinks it reasonable to pay a CEO as much as 250 times their firm’s average salary. A treadmill that for years has had millions of us commuting even more millions of miles to some arbitrary location to answer emails we already had on our phones.
This transformed world we are entering can no longer be allowed to simply be about driving returns for shareholders or making profits, while simultaneously disengaging our people, causing damage to each other and the world around us – and destroying the mental health & wellbeing of our population?
Better organisations doing better work with better outcomes to create a better world.
I said it at the outset and I meant every word. If we cannot persuade our leaders to change their attitudes to the purpose of their organisation, if we cannot re-focus that purpose to something which is positive for all our stakeholders not just one or two, then we are just kidding ourselves and engagement will never happen.
Time to change the game. Are you in?
Author: Nigel Girling, Senior Consultant, Inspirational Development Group