On Monday, Aug. 19, 2019, Business Roundtable, a group of 181 CEO from some of the biggest corporations in the U.S. (including Apple, American Airlines, Accenture, AT&T, Bank of America, Boeing, Comcast, J.P. Morgan Chase and Co.) Revised their statement on the purpose of a corporation. As it says in their press release, “Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility.”
An open letter to the CEOs of Business Roundtable
Bob Chapman, CEO and Chairman, Barry-Wehmiller
Dear Business Roundtable CEOs and business leaders everywhere,
Hope! That’s what I immediately felt when browsing Monday’s coverage
of Business Roundtable’s new statement. I found myself nodding my head
at much of the language used in your statement to redefine your vision
of the purpose of a corporation.
It reads
that “Americans deserve an economy that allows each person to succeed
through hard work and creativity and to lead a life of meaning and
dignity.” That each of your stakeholders are “essential.” And you
“commit to deliver value to all of them, for the future success of our
companies, our communities and our country.” Aside from the fact that I
believe everyone – not just Americans – deserve those things, I agree
with your vision wholeheartedly! Bravo! Changing mindsets is a
monumental first step. And public declaration of your intent represents a
watershed moment in American capitalism.
Now the real work must
begin. Moving from intention to action to indoctrination will require
significant resources and a great deal of courageous patience. More than
20 years ago, as CEO of capital equipment provider Barry-Wehmiller,
I had this same mindset shift which set us on a journey to transform
the business into one that creates human and economic value in harmony,
where value is created for all stakeholders, and everyone involved in
our enterprise goes home each day feeling like they matter.
The
journey hasn’t been easy. We’ve made mistakes along the way, but we’ve
learned a lot and continue to try to do better. That’s why I’m writing
this letter to you, to encourage you in the direction you have decided
to take and offer a little advice.
Early in our journey, we
gathered thoughtful people at Barry-Wehmiller to create a document to
codify our values. We called it our Guiding Principles of Leadership.
Some of the language is very similar to what you have written in your
statement. Ours starts with a single idea and a bold statement of
purpose: We measure success by the way we touch the lives of people.
Your
journey to re-scope the way you measure success is not going to be
easy. Clearly, the majority of you are good people who want to do well
by the stakeholders in your business. But this new way of thinking –
where the intersection of people, purpose and performance work for the
benefit of all – is counter-intuitive to the ways we, as business
leaders, have been taught to think about success and profit. Making this
transition with your boards and the financial community will be
difficult. But it is the right thing to do.
I am hoping that the
leadership of the almost 200 companies that signed on to your statement
have more specific initiatives in mind to begin to recreate your
cultures. However, I would offer to you some basic learnings
Barry-Wehmiller has uncovered on our journey.
Every one of the team members in your organizations is someone’s precious child.
If you look at a spreadsheet of personnel, it’s easy to disregard the
humanity in each and every name listed. They can easily be seen as
numbers on a page that can be reduced or deleted when share price dips.
When I was in business school, I was taught to view people as functions
and objects for my own – or the company’s – financial success. But
that’s not the reality. Johnny is not just a welder and Sally is not
just an engineer. They are daughters, sons, siblings, spouses, or
parents with hopes, dreams and responsibilities. As a leader, it is your
responsibility to care for them as someone’s precious child whose life
has been entrusted to you to steward for 40 hours or more a week.
Everyone wants to know that who they are and what they do matter.
When you recognize that you have precious lives within your span of
care, it is also your responsibility to nurture those lives and keep
them safe. Listen to them. Really listen to them. Recognize and
celebrate their accomplishments. Find ways to encourage and develop
their gifts and talents. Have patience with them. Give them the freedom
to innovate, as well as makes mistakes. No one wants to be managed. You
don’t manage your spouse or child. People want to be mentored. They want
to be coached. They want to be led.
Business could be the most powerful force for good if it simply cared about the lives it touches.
Besides being the right thing to do, this paradigm shift when it comes
to viewing the purpose of your companies can have a much larger impact
than you may realize. The way we lead impacts the way people live. We’ve
actually been told that that the person you report to at work can be
more important to your health than your family doctor. This means that
along your new journey, you must have the courage to care. You might
have a hard time explaining the ROI of caring to your board or
shareholders, but that’s because it’s priceless. It’s having teammates
that are healthier because they feel valued and understood by their
leaders and teammates. And when they go home to their loved ones, they
share joy and fulfillment instead of the stress and bitterness of
feeling unappreciated and insignificant.
These truths we, at
Barry-Wehmiller, have discovered along our journey have become
foundational to our transformation. As I detail in my book, Everybody Matters,
it’s been a long, arduous journey of enlightenment. We haven’t always
gotten things right, but we’ve learned from our mistakes and continue to
evolve as conscious leaders.
I’ll leave you with our manifesto, which guides us daily toward people and performance in harmony:
I wish you well on the journey to come because it is the path by which we build a better world.
Bob Chapman