Editor’s note: Barry Beith, president of HumanCentric Technologies, is the newest addition to Local Tech Wire’s growing number of regular Opinion contributors.I recently read the editorial by Hugh McColl, Jr. and the report out of the Forum for Corporate Conscience. I must say that I wish this activity would get as much press as the corporate scandals have gotten.
The report clearly demonstrates that at least some segment of the corporate leadership still have their heads screwed on right and their hearts firmly beating in their chests. The call to reform perspectives is a broad and loud one, and we can only hope that the corporate community hears it and responds.
I sometimes think that even more frightening than the short-term, profit-driven philosophies of the 90’s we have observed in the corporate world is the fact that it appears to have made its way into our political system as well. With evidence growing stronger that for all the talk of our democracy, we clearly live in a republic where our representatives feel they are not in office to represent us but to think for us, read that as “for our own good.”
The central theme of sustainability is an attitude of ecological validation of the company’s role in the industry, the community, and the environment and the Forum provides a compelling call to address the longer term needs and, by doing so, achieve longer term results. Industry and the CEOs who lead it are recognizing that short-term thinking leads to very long-term negative repercussions. The recommendation made certainly reflect a better, more balanced understanding of how decisions and their relationship to profitability is non-linear, multidimensional, non-sequential in nature.
Despite the recognition voiced in the Forum and the call to arms made to industry there are many other factors that will make this a difficult row to hoe even though it’s the right thing to do and a necessary turnaround to return to a strong and vibrant economy. One issue I believe is that of deregulation. Deregulation of industries is a sacred cow of many who believe that free enterprise and lassez faire economics are the cornerstone of prosperity. History has shown us however that deregulation has never resulted in long-term positive benefits. Whether it is telecommunications or airlines, chaos has a way of bringing out the worst and industries are notoriously bad at policing themselves.
Certainly the idea of market checks and balances through supply and demand have proven to be weak at best and driven too much by advertising and “white lies.” Open markets tend to lead companies to play too many “zero sum” games in which the weak are struck down before even having a level playing field to work on.
Another issue that industry must contend with is the ignorant investor who applies pressure through many mechanisms for companies to push toward their own form of the “peter principle.” The Peter Principle once applied to individuals rising through an organization until they reached their level of incompetence. This same principle can be applied to publicly held companies who are driven to meet or exceed profits achieved a quarter or a month earlier. This leads companies eventually to go beyond the products and markets they know well and to begin doing things they don’t do well, ergo the corporate version of the Peter Principle.
Companies must also reverse thinking back to the pre-1990s days or even earlier when companies took pride in standing the test of time and longevity was a virtue. The younger generations have brought too much of their “what me delay gratification” thinking to the game. We see the most obvious effects of it in the media, particularly television programming, where short attention spans and the short-term thinking that produce them have run more than one good series into the grown by head to head joisting and rapid time-slot shifts. Further, industries must change the thinking among supposed leaders that they can “outrun” the repercussions of their decisions, escape responsibility, and rely on the short memories of the general public. The dot-coms were perhaps the quintessential devotees of the “get-rich-quick on someone else’s money” strategy.
Perhaps the greatest hurdle that must be overcome is represented by the power of information and the greater power of misinformation. The use of information and media during the Reagan era demonstrated clearly the power of information repetition. If you said something enough times as the thinking goes, even something that is blatantly false, it will become the truth. The fewer facts or less data available to back a statement up, the less information to refute thereby leaving your opposition dealing with ether. Moreover we learned that the timing of information plays a role in influencing people’s behavior and thus was born the strategy of jacking up stock prices by forecasting a positive future without any basis in fact to back it up.
We sit now and wonder whatever happens to “under predict and over produce” or “set expectations low and surpass them consistently.” This particular item in Pandora’s Box may prove very difficult to put back since human nature will always be influenced by statements of mass distraction and there will always be CEO’s and other supposed leaders in industry who will play the game by the looser rules.
Even so, I have to admire Mr. McColl’s efforts and hope they carry the future.