HOUSTON (Aug. 16 2009) – Some economists and business strategists are beginning to make the case that the U.S. economy that we have known through the decade of the 90s, extending through the Bush White House years, will be dramatically different as we emerge slowly from this deep economic recession.
We started the decade exceedingly hopeful. We thought the years of hyper-partisanship were behind us. A conservative President began his tenure with a budget surplus. Then there were the terrorist attacks on 9/11 and that seemed to set the stage for even more change. Unfortunately, not all of it was good.
At the end of 2008, we were in the grip of record deficits, a staggering mortgage meltdown, and a financial services/banking crisis that reminded some of the beginning of America’s great depression. As events unfolded, average Main Street Americans learned what many perceptive business leaders already knew — that Wall Street was infected with a mentality of greed, entitlement and a shortsighted addiction to the drug of profits-now regardless of the cost. That greed and a focus on profits over all else infected a wide range of other businesses.
Now that the immediate banking emergency has past, aided by the Bush administration’s decision to shove the bank’s greed-sponsored problems onto the backs of the U.S. Treasury (read: taxpayers), the surviving Princes of Wall Street and some of their colleagues at mainline public companies, appear to be more than a little anxious to return to business as usual as soon as possible, as evidenced by Gretchen Morgenson’s column in today’s New York Times: The Quick Buck Just Got Quicker.
While I profoundly doubt that Wall Streeters have learned their lesson, I am hopeful that things will change. There are certainly strong indications that Main Street business leaders are ready for a change. These Main Streeters – many of whom run smaller businesses and who know that they are the real engines of the American economy — are angry that their life’s work could be derailed by the avarice of bankers and traders who operated in the bubble of entitlement. It is the Main Streeters who can and should lead the creation of a “new economy.”
Implicit in creation of a new business climate is a renewed commitment to ethical conduct and the formation of a new paradigm of accountability. This standard for accountability is based on the belief that successful businesses can be built on a vision of doing what is right for the customers, employees, shareholders/investors, communities in which we toil, and the environment on which we all depend.
Last month I wrote about Harvard MBA students and many of their counterparts around the world who signed an MBA oath. For me, what was so shocking about the oath was the implicit rejection of the shareholder-first way of thinking that has shaped, controlled, and, over time, allowed for Anglo-American values of business to be twisted in a way that bred greed and corruption. Former GE CEO Jack Welch, a consistent opponent of the shareholder-first mentality, called this mentality one of the dumbest business ideas he had ever seen.
Graduate business students from dozens of schools around the globe pledged to “…safeguard the interests of my shareholders, co-workers, customers and the society in which we operate. I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and societies it serve” and includes a commitment to pursue “…sustainable prosperity” while promising to “…take responsibility for my actions, and that I will represent the performance and risks of my enterprise accurately and honestly.”
By signing the oath, I hope the next generation of business leaders is really signaling that they get it and that they will not repeat the mistakes driven by a me-first mentality and, of course, one of our seven deadly sins: greed.
So what are your thoughts on what this new business climate should look like?
Some of my cynical venture capital friends think I am dabbling in the world of Pollyanna idealism. They argue that the only that thing that matters in business – the only thing – is profits.
In her book, Pollyanna Principles, Hildy Gottlieb identifies some important truths, including:
We accomplish what we hold ourselves accountable for
Walking the talk of our values means more than paying lip service
I agree. I believe that unless we fundamentally change the way we conduct business – following the ideas being championed by Main Street business leaders as well as the values contained in the MBA Oath – we are destined for a downward spiral from which we will not be able to recover.
Like 2000, I saw much hope for 2009. Now I am not so sure. The permanent political campaign mentality of the Clinton and Bush eras that has so poisoned our national discourse – and our ability to govern following an election – today is as problematic as the shareholder-first philosophy.
This is a GOP failing. It is a Democrat failing.
And we are the victims.
John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to select consistently the right leaders. You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch.
© 2021 John Gregory Self