Tuesday, 10 September 2019

Employees first and the Business Roundtable

You probably know about the US Business Roundtable's redefinition of the role of the company recently - it was certainly all over the California HR Summit when I was there.

Like many, I'm a bit suspicious about the spin involved in this. I mentioned Jamie Dinon's complete lack of understanding about the realities of his workers' experience in my session, so for me, his inclusion in the signatories doesn't do much to support the statement and the claim that investing in employees starts with compensating them fairly and providing important benefits. Perhaps if Dinon shared his £31m pay with his employees a bit more fairly I'd be a bit more convinced there's some meaning behind his stated desire to help the average American worker.

However, the statement can only be a step in the right direction, even if it's only a small step, and adds some weight to existing calls for more inclusive capitalism, going back to Charley Handy in the 1990s and more recently, Michael Porter's ideas on shared value.

I still think we need to reorder the first two commitments. The order should be employees, then customers, then finally, as the statement suggests, shareholders. That's the sequence in which businesses create value through their organisation, customer and financial value chains.

It's also the basis for creating value - providing new opportunities for a business rather than just supporting what a business already wants to do.  Ie we need to think about the role of the four value chains reading left to right, not just right to left.

The sequencing is supported by Glassdoor research as well, eg this piece recently:

And it should be the order of the prioritisations made by companies too.

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