This is a column about creating value. Like you, I spend a lot of my time thinking, writing and talking about value. But as I look at the crisis of confidence plaguing the corporate world in general, I am forced to consider a deeper question - in our unending quest for value, do we have to compromise our values? What is the relationship between values and value? Indeed, what is the purpose of a business?
Of course, a business exists to create value for its customers and profits for its shareholders. But is profit the ultimate goal of a business? Does a business have a higher purpose? Can this higher purpose be reconciled with the profit motive? And can companies do well by doing good?
I teach at a business school, but I had never paused to ask those questions. Crises focus our attention on what really matters. The meltdown of the market and the waves of corporate accounting scandals have made us all think more deeply about what ails the world of business at large - beyond the obvious hype and greed that brought down the dotcoms and telecoms.
Make Values Your Anchor
I have reached two inescapable conclusions. First, corporations must see themselves as living things that have a higher purpose than profit. And second, values are the foundation upon which the edifice of value creation must rest. To sail the stormy economic seas, corporations must make this higher purpose their compass, and values their anchor. If they do, then profits will inevitably follow through motivated employees, satisfied customers and committed partners.
I base my assertions on the emerging evolutionary view of business. This view sees business as a living entity that evolves toward higher levels of consciousness, and not as a machine engineered to maximise productivity and profits. Arie De Geus, the author of The Living Company: Habits for Survival in a Turbulent Business Environment, argues that companies die because they concentrate on the physical aspect of their being, and ignore their emotional, mental and spiritual needs. In his insightful book Liberating the Corporate Soul: Building a Visionary Organization, Richard Barrett draws a parallel between the evolution of individual consciousness as the unfolding of human potential, and the evolution of a business as the unfolding of its physical, mental, emotional and spiritual potential. Barrett says an evolved business balances self-interest with the common good. It is deeply conscious of its connections to its stakeholders, its community and the environment.
The evolutionary view emphasises that the purpose of a business is more than profit. According to my friend, author Deepak Chopra, "A business must fulfil the needs of the human spirit. These include survival, safety, play, celebration, love, belongingness, self-esteem and self-actualisation. It must also nurture the ecosystem. If it does so, the creation of wealth and profit will be a natural byproduct." Enlightened leaders echo this thought. George Merck, the co-founder of Merck, believed that his company "tries never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear." The same idea is found in Lord Krishna's advice to Arjuna in the Bhagavad Gita, "You have a right to perform your prescribed duty, but you are not entitled to the fruits of your actions."
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