Should Society Let Us Exist?

When new CEOs are installed at companies, they’ll often set their agenda not by what they say, but by the questions they ask.

On becoming IBM’s CEO, Sam Palmisano only asked four questions in his first meeting. I think they’re brilliant and that his method of asking questions first is the approach we don’t see enough of. His questions are:

  1. Why would someone invest in us?
  2. Why would customers buy from us?
  3. Why would someone work here?
  4. Why would society allow us to operate?

It’s the last question that is the most important one and the one that underpins the other three. In fact, I believe that Mr. Palmisano could have simplified his list by just focusing on the last one. It’s a question that’s far too hard for most companies and most executives.  A shame, given what we now pay CEOs.

No, “so shareholders can make money” isn’t a good answer. That hasn’t been the right answer since robber baron capitalism. And the reason that business has to operate in such a heavily-regulated environment is the result of being unable to answer that question to the satisfaction of society.

Unfortunately, many managers (I won’t use the term “leader” here, because they’re not) refuse to acknowledge the wake their corporations can leave. There’s an impact to society in how you use natural resources. Or in the hiring practices you have. Or in your selection of outsourcing partners. All these things can have a negative or a positive impact on society, but you’ve got to think about them. Society has an obligation to act on the things that you forget to do.

The consideration only (or primarily) of the fiduciary responsibility to shareholders is what generates the unwanted regulation. Society, when it sees businesses acting only in self-interested ways, will react with regulations. The more self-interest exhibited,  the more regulation.

Ultimately, the corporation exists only because society allows it to exist through the laws that allow the formation and continued existence of those corporations. Ask GE what it was like to have to clean up the Hudson River after working only in a self-interested fashion for many years.

Why should society allow your company to exist? Does your CEO know the answer? If not, why?

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2 Responses to Should Society Let Us Exist?

  1. Quite a thought provoking post, Mark. You’re getting pretty good at this thought leadership thing.

    So…I pose the question to you regarding Neustar, a company that has diversified its business through product development and M&A.

    Why should society allow Neustar to exist?

    Like

  2. markpilip says:

    Marc–I was waiting for somebody to ask that question.

    The shortest answer is the first part–why Neustar exists. The other two sections show how Neustar does what it does and what (the products and services) it builds.

    Most companies only know the “what”–what kind of widgets they make. When pressed for why or how, the answers get more fuzzy. But it’s the “why” (in Neustar’s case, rich and personal communications ) and, to a lesser extent, the “how” (neutral and trusted services, provided in a secure way) that answer the “why should society let us exist” question.

    Full disclosure–I work for Neustar.

    Why Neustar Exists:
    Everything Neustar does enables personal and rich communication between people, so that lives are enhanced by the technology we use. Neustar believes that personalized experiences and services make our lives extraordinary.

    How Neustar Does What it Does:
    Neustar manages unique, secure databases that allow companies to find, connect, and authenticate customers.
    Neustar provides its services in a neutral and trusted way that protects customer data, personal data, and respects privacy.

    What Neustar Does:
    Neustar’s network addressing, routing, and policy management services provide customers with insights into their data that are critical for their inventory management, network security, and marketing departments.
    Neustar’s services include registry services, managed DNS, telephone number portability, IP geolocation, Internet security, and web performance monitoring that help their customers provide personalized experiences and services to their end users.

    Like

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