The Trouble with Corporations
Are you ready to recreate the corporate structure?
Over the last year COVID pandemic-related lockdowns have ravaged the economy. But there’s been a marked difference between how Main Street and Wall Street were impacted. While Main Street suffered, Wall Street profited. There have been many articles written about this odd juxtaposition and how it reflects the growing gap between the haves and have-nots. As we enter a new era of business and how we work and relate, how we structure, finance, and grow companies is finally being seriously discussed.
Author Roger Martin recently penned a fantastic article about the need to replace public corporations. Martin dives into the history of corporations and how over the last 40 years, they have shifted priorities to maximize stock prices to enrich their leadership and stockholders.
However, this focus has excluded other key stakeholders such as long-term investors (which Wall Street was originally designed to engage and benefit) and the very knowledge workers who are the core of a company’s production. Short-term stock prices are now prioritized over long-term value creation. And as Martin observes, “The dominance of short-term factors in corporate decision-making and the activities of short-term investors are making quoted market prices a less-reliable indicator of value than they used to be.”
This leads to the justifiable perception that corporations are greedy and only care about maximizing short-term profits at the expense of those who genuinely care about investing in a company’s product or vision, or the employees who want to build a meaningful career at the company.
Conscious leadership looks long-term and holistically at how to structure and run a business. In the current marketplace, it requires courage to take a long-term view and find a way for all stakeholders to benefit. Those who are willing to take a stand will be seen as the visionaries who ushered in a much more equitable way to do business, build healthy teams, and deliver quality products and services.
Martin suggests the future is the long-term enterprise (LTE), which empowers companies, their employees, and long-term investors to focus on the value enhancement of the company itself. Martin also believes employee stock ownership plans (ESOP) motivate employees for value creation, building the most innovative and highly competitive companies.
As a conscious leader, consider how you structure your business so that you are “elevating humanity through business,” as John Mackey encourages in his book, Conscious Leadership. It requires courage, innovation, and vision. Transforming the entire business and financial system won’t happen overnight. But each conscious leader can choose to BE the change we want to see in the world. It starts by choosing who you want to be as a leader, then building a company and team that will forever change how we work.
Work happy. Live happy. BE happy.
Meredith
The way we work and build teams is rapidly changing. Leaders often feel unprepared to navigate the transition. As a conscious leadership coach, consultant and communicator, Meredith helps leaders and their teams create new ways of working and relating so they can prepare for the future by consciously co-creating it.
Contact her to develop your conscious leadership and transform your organization into the workplace of the future.
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