"The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something." - Franklin Delano Roosevelt
Two days in San Francisco with 70 executives from 40 companies on the challenge of Making Purpose Work allowed my brain to thaw and the cobwebs to clear. The insights I gained from hearing about bold experimentation by companies in the Bay and beyond -- illustrate the positive benefits of fresh thinking about Purpose-Vision-Values.
One key benefit of a clearly articulated purpose is the ability to attract and retain talent -- but it goes beyond that. As Jeff Weiner, CEO of LinkedIn, told the group, "trust equals consistency over time." Trust is essential to commerce -- and trustworthiness is revealed in the quality of the decisions made throughout the enterprise. The goal of the meeting in San Francisco was to explore practices across the operations of the company and bring purpose to life -- aligning enlightened goals with performance.
The Aspen Institute began public discourse and private dialogue on the need for experimentation about business fundamentals back in 2003, as the nation absorbed the shock of Enron's rapid demise and the simultaneous loss of one of the biggest brands in the "trust" business -- Arthur Anderson.
First we mined for connections between growing pressures to produce short-term financial results -- and the kind of malfeasance revealed at Enron, Tyco and WorldCom. Was "short termism" a trend, bigger than just a few firms or the work of a handful of greedy executives?
The next layer of dialogue asked if prevalent "short termism" was a real problem -- and if so, for whom? Where was the evidence of harm? Was short-term thinking in business and capital markets worthy of our attention and concern?
Interspersed in the layers of fact-finding, is theory -- assumptions and beliefs about what creates value for the corporation and motivates business executives -- and the need to challenge the tired mantra of shareholder primacy.
The question on the table now goes to the heart of bold and persistent experimentation: If we think there is a better way to operate, what is it, and what is needed to move the needle at scale? How will the change take place?
Last week at the Aspen gathering on "Making Purpose Work," we looked at practices consistent with our highest aspirations for capitalism. Fresh thinking about the purpose of business was evident in visits to newer companies. From Autodesk's focus on the "future of making" -- connecting software programmers with the needs of the world's artists, inventors and producers; to LinkedIn's goal of "creating economic opportunity for every member of the global workforce" -- for the benefit of their employees and peers, and everyone from line workers in factories in Asia to heavy machinery operators in Africa.
Executives and business veterans like Levi Strauss & Co., Cargill and Chevron articulated business principles honed over many years -- and even decades. We discussed the impact of novel governance structures designed to temper short-term investor demands -- like dual class shares that have become common-place in the Silicon Valley -- but also the attributes of family-controlled enterprises and publically traded companies where bedrock values are both taught and measured. And we mixed it up with academics at institutions from Berkeley to Wharton -- who experiment in the classroom with new ways of teaching the Purpose of Business.
The meeting in San Francisco marks a new phase of our work in business fundamentals -- on the Purpose of the Corporation.
As we take the next steps on our campaign to "hack the narrative" about purpose, the status quo is losing ground to abundant new questions about how companies create and communicate authentic, long-term value for employees, for investors and for the unique mix of constituents who contribute to a business' bottom line.
Successful corporations need a more robust vision than traditional financial goals and metrics capture. While business journalists may -- inadvertently -- perpetuate the myth about shareholder primacy, a growing number are piercing the veil of ignorance about what the law allows. They question business purpose in an age of social media, culture set by Millennials and shifting public expectations on human rights to climate change.
Business school classrooms have a way to go, but it is hard to imagine that finance faculty will continue to get away with this now famous New Yorker cartoon version of the purpose of the corporation.
Leaders like LinkedIn's Jeff Weiner view corporations as a recent entry in the long evolution of how society organizes human activity. Weiner cautioned us not to let the skeptics get in the way of being great. He told the audience that the best companies define for themselves what "winning" means-and then return to it again and again and again until it sticks. The kinds of innovative activities embraced by the companies attending the Making Purpose Work meeting illustrate that a win-win is indeed possible - for business as well as society.
Over the last decade, the Aspen dialogue on Long Term Value Creation and the Purpose of the Corporation has engaged 1,000 individuals, including managers from the C-suite and Directors of public companies, professionals from accounting, law and finance, and scholars and teachers from leading business schools. The Aspen Principles and policy statement on Overcoming Short-termism capture the best thinking that evolved from these many conversations.
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