I read the Business Roundtable statement standing up at Ovation yesterday morning, waiting on a cortado, phone in one hand. One hundred and eighty one chief executives putting their names to the claim that a corporation exists for its customers, its employees, its suppliers, its communities, and then its shareholders. The shareholder primacy language that had been sitting in that document since 1997 is gone.
It is well written. It is genuinely a good document.
I believe roughly none of it yet, and that is not cynicism. It is a request for evidence.
The crew of the Nostromo had a mission statement too. Science vessel, commercial tow, return the ore, come home. What they did not have was Special Order 937, the one that ranked the specimen above the crew and marked them expendable, and the order only became visible at the moment the two purposes came apart. That is the shape of every corporate values problem I have ever worked on. There is the stated purpose, which is free, and there is the real one, which is whatever the company does on the day the two disagree. Nobody knows which one they are working for until the quarter goes bad.
A corporate value is not what you publish. It is what you keep doing on the quarter it costs you money.
The good news is that the test is cheap to run and completely public. CVS walked away from roughly two billion dollars in tobacco revenue in 2014 and took the hit in the open. Patagonia ran an ad telling people not to buy the jacket, then built a resale business that competes with its own new inventory, then donated its tax cut. Those companies did not announce a hierarchy of stakeholders. They picked one, paid for it, and let everyone watch the invoice.
There is the stated purpose, which is free, and there is the real one, which is whatever the company does on the day the two disagree.
So here is what I would do with the statement if I worked at one of those one hundred and eighty one companies. Take it into the budget review. Find the line item where the new purpose and the old purpose disagree, and there will be one, because there always is. Move money. Then say nothing about it for two years and let somebody else notice.
Purpose that arrives as a press release and never touches an allocation is not a strategy. It is a hedge against being asked later.
Saturday night I was at the sticky little bar in Southeast where the host calls everyone baby, and I told the room I was going to nail the bridge this time. I announced it. Everybody heard me announce it. Then the bridge came, and the bridge is where you find out.