How over-emphasis on shareholder value can destroy a business

I was speaking today to 50 executives responsible for corporate and social responsibility today:

 

RISK:  In pursuing only shareholder value and bottom-line profit, loose the plot and damage the business

OPPORTUNITY:  Drive the business on a broader and more profitable mission, that motivates, inspires and wins consumer as well as community, worker and shareholder approval

 

Bad news about corporate values can hit any corporation like a tornado, ripping the guts out of the business, shattering market confidence, scandalising customers and causing outrage in the general public. 

 

•          7 out of 10 chief executives report that Corporate Social Responsibility is (now) an essential issue to their business

•          89% of marketing directors believe (now) that business should be involved in addressing social issues of the day

•          90% of workers feel proud of their companies' values when they support a good cause

•          87% of workers feel a strong sense of loyalty

 

For more see http://www.globalchange.com/ppt4/sustain

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Future trends and financial services - by Dr Patrick Dixon for Absa / Barclays Bank

Future trends and financial services - for Absa / Barclays Bank

Fascinating audience in a two day leadership seminar for Barclays Bank / Absa Bank - senior leaders from across sub-Saharan Africa. Day 1: Issues facing banking and African business development. Socio-demographic, political, technology and other factors including sustainable business development. Scenario creation - and using scenarios to test strategic assumptions.

My wife and I travel in the region with ACET - our AIDS foundation, and have seen major changes, but not as many as those in the seminar.

The fact is that despite AIDS and many other challenges, the number of conflicts in Africa is low right now and a number of countries are showing rapid economic growth such as Uganda and Tanzania.

In the meantime S Africa's days of gold mining are drawing to a close with mines now up to 4.5 miles deep. But techniques for extracting more gold from old mining waste will keep the industry going for a while.

Future trends in the Netherlands and beyond - by Dr Patrick Dixon for Young Bilderberg / ABN AMRO

Future trends in the Netherlands and beyond - by Dr Patrick Dixon for Young Bilderberg / ABN AMRO

This group is interesting - high talent, younger leaders in the Netherlands who are facing a common challenge which is to maintain the vibrancy of Dutch corporations in the face of large global competitors.

How to make change happen - strategic transformation by harnessing passion - presentation for MBA elective by Dr Patrick Dixon

How to make change happen - strategic transformation by harnessing passion

Most audiences I speak to - senior executives in the largest multinationals - recognise that there is a real crisis at work, and that a large number of their staff are disconnected from the mission of the business.

I often refer to a recent UK survey showing that 60% of 25-35 year olds cannot see any real purpose in what they do at work, and 90% of 35-45 year olds want to get out of conventional business jobs.

70% of 25-35 year olds say they are having a quarter life crisis and are thinking radical thoughts about their own futures.

While this was only a UK survey, most audiences say that they recognise a similar process of rethinking going on inside their own countries and their own companies (to one degree or another).

It is affecting the war for talent. A growing number of corporations are now offering a better work-life balance as part of the reward package to persuade people to join or not leave - and are now trying to work out how to deliver on the promise.

The reasons for these changes in attitude are complex but their impact will be profound.

Business School MBA elective programme on Strategic Transformation. The crisis of purpose in business today and why most people don't care about your strategy or the future of the corporation. How to persuade people to change. How to connect with the passions people have for a better life. Reasons why people don't change. How to create effective leadership and ownership of your corporate strategy.

Searching for people motivated to make shareholder value

I am still on a search to find people who wake up in the morning excited at the thought of making more shareholder value and bottom line profit.  At every executive event I speak at I ask for nominations of people I can interview who in the opinion of the participants are motivated by such things…. Or indeed for people to say they are themselves.

 

Sure, when people own their own companies, or have taken them public, they often feel passion about these things.

 

But it is very rare in my experience to find people who are inspired by such target-setting.

 

This is a fundamental challenge for CEOs who often continue to trot out the business mantra about the next quarter, despite the fact that such language is a turn-off for most people inside the corporation.

 

Personal challenge, a fun team, achieving something worthwhile, having a life outside of work, being fairly treated and so on…. These are far more powerful than an obsession with numbers.