What are the basic requirements for
people to flourish as human beings and live good, meaningful lives of purpose
and value? The simple answer is a person needs a few basic goods and services
such as food and water, shelter and sanitation, along with education and health
care. A person also needs the freedom to pursue his or her own unique goals and
dreams and the opportunity to be respected as a valued member of their
community. When so simply stated, it follows that work in organizations is an
effective way to satisfy these basic needs and flourish as human beings.
This
answer also illuminates why people need meaningful work to thrive. We discover
three reasons why we need to work: one, to earn the income to acquire the basic
goods and services we need to live a good life; two, to develop the talents and
abilities to exercise effectively the freedom to achieve our dreams; and three,
to make a lasting contribution to the wellbeing of others and become respected
and valued members of our community.
A
business then, whether for profit or nonprofit, is an organization of physical
and financial assets, people, and knowledge, brought together in order to
satisfy our need for work and to produce the goods and services we need to
prosper. So we can state the purpose of business as four-fold:
1.
To produce profitably some good or service that
benefits someone who wants them.
2.
To pay employees adequately so they are able to purchase
the goods and services needed to live well.
3.
To
develop the capacities of people so they can effectively exercise their freedom
to make a difference.
4.
To contribute to the larger community, which both
supports and is supported by the business in an interdependent relationship of
society and economy.
A successful
business must effectively balance these four purposes. A business cannot be
imbalanced for long without doing great damage to the people and world around
it. It cannot neglect any one purpose for the sake of any other purpose, nor
can it privilege one purpose at the expense of any other purpose. To do so
harms the business, harms the people in the business, and harms society itself.
The art of management is to balance the four-fold purpose of business and
create the conditions for people to flourish as human beings. It seems obvious that we are failing.
Why are we failing?
Our current “recovery” is pretty much a jobless recovery, as have been the last
few economic periods following recessions. The jobs that are created tend to be
part-time and/or low paying jobs, so people end up being underemployed and see
their earnings and benefits shrinking. Since the 1970’s even though worker
productivity has risen, middle class working families have seen their incomes
stagnate or decrease, and poverty has risen to a 17-year high. Today the gap
between the top 1% of income and wealth holders and the rest of us is greater
than at any other time since the Great Depression. Yet, while most working
families are barely hanging on to economic survival, CEO pay has risen 725
percent and now the ratio of CEO pay to average worker pay is 354 to 1.* By any
objective reflection, this is neither wise nor sustainable.
Two great
organizational thinkers, Charles Handy and Peter Drucker, both of whom are very
much pro-business and could never be considered anti-capitalist, recognized
this dangerous trend back in the 80’s and 90’s. The pursuit of profit and the
enrichment of the individual at the expense of everything else was becoming the
driving motivation in business practices. The cult of profit had enslaved the
economy. As a young man in the 1980’s, I remember speaking with my friends, and
all we could talk about was how to make a lot of money quickly and with little
effort. Lifestyles of the Rich and Famous was a popular TV show of the
time and characterized the ambitions and attitudes of many. In an essay
entitled, “The Lure of the Zeros,” Handy said:
Money is not the root of all evil; St Paul was
careful to say that it was the love
of money which was the problem. But I wonder if you really can see straight
with all those zeros in front of you, still disentangle right from wrong, above
all still be true to yourself in
spite of the numbers.
Drucker said way
back in 1974 in his book, Management, Tasks, Responsibilities,
Practices:
The profit motive
and its offspring maximization of profits are just as irrelevant to the
function of a business, the purpose of a business, and the job of managing a
business. In fact, the concept is worse than irrelevant: it does harm.
Of course, there is nothing wrong
or evil with either profit or wealth. As Drucker pointed out, profit is a
necessary measure of the validity of a business, but when it becomes the sole
purpose, everyone suffers. Similarly wealth is both desirable and good, but not
for its own sake, only in so far as it contributes to a meaningful life of
purpose and value, which is possible even without great wealth.
We could begin in
our management councils to measure the performance of our businesses against
the four-fold purpose and strive to find a balance. Sadly, it might just be
that big business and large corporations are too committed to the cult of
profit to adjust their business practices. It just might be that most CEO’s are
too attached to the self-enrichment mindset to reign-in their exorbitant
salaries. It just might be that our political system is too polarized and
inefficient to make a meaningful difference. Yet there still might be a silver
lining to the ongoing economic insecurity and hardship faced by the American
middle class and workers around the world. As they see the wealth gap only
increasing and their opportunities only decreasing, they just might realize the
solution to their ongoing plight is to build business and economic security at
the local level.
At the local level
we can form businesses that will respect the human need for work and realize an
authentic balance between business’s four-fold purpose. At the local level we
can begin to produce the basic goods and services we all need to live well. At
the local level we can create meaningful opportunities for people to develop
their talents and abilities and contribute to the wellbeing of their neighbors.
At the local level each person can be recognized as an esteemed and important
member of the community. So we can continue to stagger on hoping without reason
that big business and big government will save us in our current economic
troubles, or we can seize the opportunity to recreate economic prosperity for
all beginning at the local level.
*
Sources – U.S. Department of Labor, Bureau of Labor Statistics, “Labor
Force Statistics from the Current Population Survey.” Money.cnn.com/2011/02/16.
Stateofworkingamerica.org. huffingtonpost.com.
