I’ve been immersed in Umair Haque’s (@umairh) world of thought for a little while now, a thinker I would describe as a revolutionary economist. Umair doesn’t shy away from questioning the underpinnings of the current economic system and he’s put forth some really theoretically appealing stuff, even if it is often years away from being legitimately adopted and practiced by corporations.
It’s a well-established maxim of business that you get the results you measure for. What Haque shows us in repeated examples from his “New Capitalist Manifesto” is that corporations have been single-mindedly operating on ONE measurement for so long it has overrun any of the other motivations for running a business (and erased the memory of those other motivations as well).
Businesses measure for profit and growth. That’s what the current economic system is set up to reward and what we get as a result is businesses built for great looking balance sheets, often at the expense of customers, employees, and the community (unless of course those customers, employees, and communities can find a way to impact the bottom line, in which case those businesses are all ears).
I argue that since we get what we measure we should start to seriously measure employee and customer satisfaction. The measure of a great company should be it’s overall effect on its employees, customers, and the community, not a narrow-minded approach to eternally growing profits at the expense of all else.
Some companies do measure customer satisfaction, companies like Zappos and 1-800-CONTACTS have been built around this customer satisfaction philosophy, and they’re doing pretty well.
We are now in the early stages of emerging out of the dark ages of consumer capitalism (the era in which businesses were primarily interested in fostering human insecurities in order to spur consumption to drive up demand) and into the age of value creation.
But profit continues to be the overriding motivation for most businesses because Wall Street, the engine of all business investment in this country, still only measures profits.
If the age of Value Creation is going to truly emerge as the main business narrative of the 21st century, business people and the Wall Street infrastructure are going to need to find something else to measure.