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What businesses are for

Peter Cappelli has written an excellent post at HBR that falls simultaneously into the “Well, Duh” and “Needs to Be Said” bins: “It’s Not OK That Your Employees Can’t Afford to Eat.” Well, duh! It’s amazing that it even needs to be said. (Note that the Duh belongs not to Peter but to whomever needed to hear that.)

Let me put it differently. From my point of view, here are the two fundamental objectives for any business:

1. Enable your customers to lead lives that are a little bit better.

2. Enable your employees to lead good lives.

Profit is what you use to do both of those things.

8 Responses to “What businesses are for”

  1. Businessmen believe, at an emotional level,
    1. that their employees and customers are thieves, each to the last;
    2. that “the system” is slanted in favor of thieves and particularly against any kind of candid discussion of the overwhelmingly grave problem of universal thievery;
    3. that their employees and customers therefore deserve any kind of covert punishment and degradation that can be devised.

    Anyone who does not believe these things is revolted by the business environment and goes and does something else.

  2. As someone who has spent most of my life in the business world, I can honestly say that neither I nor any of my business associates believes anything even remotely close to what you describe. And we’re still here, doing business and loving it!

  3. Frank, your description doesn’t accord with any business I’ve worked for or worked with, although I’ve been in high tech almost exclusively.

  4. I wish those were the two fundamental objectives for any business. But my impression is that in big business as it is currently practiced, there’s only one fundamental objective: profit. Enable customers to lead better lives? Well, if that helps with profit, sure. Not sure it applies to businesses like ad agencies or military contractors or oil companies or, ahem, enterprise software companies. Enable employees to lead good lives? Well, if that helps with profit, sure. But if your cost-benefit analysis says it’s more expensive to pay for employees who stick around and don’t screw up than it is to see employees as fungible and live with the problems brought by the disgruntled and the unmotivated, then you go for the cheap — the more profitable — solution.

  5. “Keeping morale up” is a debased form of “enable our employees to lead good lives,” but it’s better than nothing.

    I think Frank overstates it. Ed, I agree that what you’re saying is pretty typical.

  6. David, it’s “whoever needs …” not “whomever needs …”

    What you did there is epidemic. The rules governing pronoun case are apparently evaporating rapidly. Here the relevant rule is,”the pronoun takes its case from its use in the clause it’s part of.”

    So, it who/whom or whoever/whomever is at issue, and if it will be the subject of a clause, then:

    Whoever needs the monkey nuts should take them.

    They will belong to whoever is the quickest.

    [“whoever” is the subject of is, and the whole clause “whoever is the quickest” is the subject of the preposition “to,” which is one of the places where things get a little tricky in writing.

    And, of course:

    If who/whom or whoever/whomever is at issue, and it is the object of anything that can take an object, such as an action verb or preposition, then:

    To whom did you give the monkey nuts?

    Etc.

    Note: I think you’re an excellent writer, and I am not impugning your skill and competence.

  7. In the comment above, there’s a typo: “So, if who/whom …” should be “So, if who/whom …”

  8. As a business person who enjoys what he does and attempts to live up to your #2 I despair that the deck is so wildly stacked against the premise.

    Whenever I read “.. achieved a profit of only _____” in an analysts report I shudder. The purpose of “success” in businesses has become so perverted as to remove all human scale and be driven solely by ever larger profits. If that is one’s sole metric then the ‘logical’ choices you ‘must’ make can not be human based.

    Yes, before hate rains down on my head, profit is one essential motive in business – I do not run a 501(c)3 – but it is not the sole, single motive … to me.

    I consider our business successful in part because our Company has contributed well over $35 million in wages, benefits, etc. to the local economy since 1999. Could the Company have been run to deliver higher profits? Of course, but at what ultimate cost?

    Our customers, vendors and partners enjoy working with us because our people actually care about what they do, they share a desire to have our Company succeed and they know that as the Company prospers so do they.

    Are we creating wealth? Absolutely. Do we want and expect to create more? Without question. Are we doing quality work we can take pride in? Again, a yes rings out (and of course perfection is never attained so we do make human mistakes now and then) Yet, in many decisions over the years I have taken into account the human reality and not solely the balance sheet.

    As a 59 year old the American Dream, as I internalized it, was about opportunity – not a birthright nor ticket to obscene wealth. If you worked hard and created value you would be rewarded. I have proved it is possible and without succumbing to the “thievery” Frank describes. Of course, since I am not living in a mansion, have not 100% of the time “maximized profits” many of those who judge a Company’ ‘value’ purely on spreadsheets might suggest I have failed. They would be wrong.

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