In This Episode
As our listeners and anyone who has met us knows, we love everything related to small business. We eat, drink, and sleep small business stuff. That said, we do also pay attention to some of the trends with bigger businesses. A few week ago a group called the Business Roundtable (www.businessroundtable.org) issued a statement that caught our eye. They issued a statement summarizing the Purpose of a Corporation that has expanded it beyond what they’ve supported for the past 40 years which has been a focus on increasing shareholder value.
The reason it initially caught our attention was that the things they talk about in this statement include a focus on things like customers, employees, suppliers, and the community in addition to shareholders. They labeled these five groups as Stakeholders and say they should all be focused on. Our initial response, from a small business perspective, was well “duh!” I mean how can you have a successful business that doesn’t focus on taking care of your customers, employees, suppliers, and community?
But as we got further into it, we realized how crazy it is to think you can serve 5 masters all at the same time. How do you resolve some of the stickiest real world situations where folks are involved. For instance, what if your business is going through a cash pinch? Should you take care of your employees first or your suppliers? What does it mean to “support the communities” where your business is involved? Many of us do business in lots of different communities. Do we need to consider all of those communities?
While these big company CEOs boiled their statement down to about a page, we contend that you can answer the question about the purpose of a corporation in two words…Make Profit. If your business is making profit then all of those “stakeholders” are going to do well. The question becomes how you go about making a profit. During tonight’s show we dig into this statement by the Business Roundtable and give some insights into what this means for you as a small business owner and how you should prioritize and focus activities in your business.
People, Companies and Resources We Mentioned in the Show
- Business Roundtable Statement on Purpose of a Corporation (https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans)
- Richard Shinder Wall Street Journal Article (https://www.wsj.com/articles/the-business-roundtables-recipe-for-confusion-11568760132?mod=searchresults&page=1&pos=1)
- MVP’s 7 Keys to Success (http://maximumvp.com/7-keys-to-success/)
Captain Obvious (https://www.adweek.com/brand-marketing/captain-obvious-stars-ultimate-skippable-ad-hotelscom-171457/)
- Tricia Griffith President and CEO of Progressive Corporation (https://en.m.wikipedia.org/wiki/Tricia_Griffith)
Dr. Evil (https://en.m.wikipedia.org/wiki/Dr._Evil)