I wouldn’t want to be a just-for-profit company today. For them, profits are the endgame, and that just isn’t the current gestalt of society. Furthermore, these just-for-profits have a mission statement that basically says the following: Make the shareholders rich.
These public just-for-profits suffer a disease I call “shareism.” Shareism is a form of mental tyranny, driven by the stock price and the demands of the shareholders, whom people erroneously refer to as owners (they are mostly bettors). Shareism, or worshipping at the corporate church of the stock price, keeps your company from doing the right thing for your customers, your employees, and society. And it keeps you from thinking outside of the ninety-day box.
As shareism grows inside your company, you become internally focused and intensely short sighted. It sucks out your energy. It sucks away your spirit. It puts you in a vicious cycle: You tighten your focus, seeing only this year’s profit-and-loss statement, pull back your timelines to make the shareholders happier, and drive away your customers, your talent, and society.
Your customers don’t care about the price of the stock or the financial return to your shareholders. But they do care about short-sighted programs that impact their service levels. If shareism, or even the short-term focus on profits (the “what have you done for me lately” corporate culture), is alive at your company, your team’s energy is whipsawed by the floating price of the stock and the health of the profit-sharing plan. When the stock is down because of a bad warning, so is employee attendance that day. More people call in sick. If they do come to work, they have that deer-in-the-headlines look on their faces and they can’t concentrate on anything that has to do with the future.
For example, when shareists at an airline decide to cut the flight attendant pension plan to put a penny back in the earnings per share pool, you encounter surly attendants when you fly that airline the next day. The more the stock becomes the only yardstick, the less you think about the future and circle the wagons. This can lead to a downward spiral for your business, where quality, innovation, service excellence, and profits all dry up and leave a shell of a public company. As I said, if you’re IBM, DEC, or BP and profits are the end game for you, ABCya–wouldn’t want to be ya.
