So, it’s no fun to have made the call, but I see that Tony Hayward is in fact on his way out. He is being held accountable (not necessarily blamed, but the buck stops with him). A Gallop Poll showing how the “confidence” people had in various institutions means we have a very long way to go in getting folks to have faith in big business. Luckily, many still have confidence in small business. “Small businesses rate a 66% while big business gets 19% and organized labor 10%.”
It goes without saying that politicians are “way down there.” But still, our larger business institutions seem to have lost their way or at least they have all been painted with a very large “no confidence” brush. There has been so much bad news, so many bad decisions and such a lack of transparency with some concerns that the whole “big business group” is now held in low esteem.
There are exceptions of course. There are some large companies that for now, the public trusts; they are willing to speak well of them. All of this reminds me of the recent Jim Collins book How the Mighty Fall in which Mr. Collins points out that the very first stage of impending doom is hubris. Along with that ill founded belief that “we can do no wrong,” comes the inevitable culture of it’s all about us. Personally, I don’t think that the size of the company is what we need condemn, it’s the lack of holding everyone accountable for providing the best quality of product and/or service.
So what can we take from all this? Maybe we need to continue to believe in the original “noble purpose or goal” of the company when it was founded. I’m sure it wasn’t just about money. Perhaps we need to keep everyone on target for delivering on the original promise of our company and not let the finances become the reason for existence. I remember hearing someone, it escapes me who at the moment, state that “You can have a great CFO and a phenomenal Corporate Attorney and you will never run out of cash and you will never get sued. But you will go out of business.” While business is a risk and you do have to stretch, you don’t have to bend, break, go around or short cut on ethics, common sense and sticking to your original noble goal.
Even the Supreme Court, conservative by a 5 to 4 margin, knew that they could only “tinker with” Sarbanes-Oxley. They unanimously agreed that the law is constitutional and in a 5 to 4 decision only tweaked the way the Public Accounting Oversight Board is appointed. The message is clear, left to their own devices the large companies will tend to go astray. My opinion is that is because they pay more attention to the stock price than they do to sticking to building a business. They worry about the Wall Street bankers and exchanges instead of the real stakeholders in the company – customers, employees, suppliers and other creditors. When you cater to Wall Street, you are not running your business.
For the small business folks I deal with, the pain caused by all of this is felt mostly in their ability to predict the future and go about their business. Since the consumer and big businesses aren’t spending and the banks aren’t lending, the private companies trying to hold on during this economic reset are challenged at best. Still, they are better off being private and not having to deal with Wall Street. So if only the bankers would get the ship righted and on an even keel, we could begin to hire in the small business sector like we have before.
The rules of the game have changed forever. There are no business folks, large or small, that I have not heard say that their business model is either significantly or completely changed. That’s the good news. We now have plenty of opportunity to get back on track paying attention to our businesses and getting back to the fundamentals of providing outstanding products and services. Collins has pointed out in How the Mighty Fall that we do not need to worry ourselves too much about those companies who have gotten big and arrogant. History shows they will fall. We only have to make sure we don’t let them fall “on us.”
So, as usual, the questions! What are you doing to take advantage of this economic reset to rebuild your business culture to be one inspired by your original “noble purpose?” Are you training, building staff, creating teamwork and generally improving your processes? Are you finding new ways to market? Are you making sure that even as you are successful you maintain a healthy paranoia?