Quarterly Returns Must Die

Posted by on Oct 24, 2014 in Leadership | No Comments

more-stuff

In our business culture today, we have a relentless focus towards more — towards buying more, towards having more, towards selling more. We’ve even codified this unending expectation into our work lives in the form of “quarterly returns.” The explicit and implicit expectation set upon our organizations is unending growth, quarter after quarter, year after year, forever and ever.

Put another way, we live on a planet with finite resources and somehow we think that infinite quarter-upon-quarter returns aren’t just possible, but are somehow sustainable…?

It turns out, there IS something that provides unending growth and ceaseless consumption of resources: we call it cancer.

Maybe you’ve heard this analogy before, but I think it’s worth sharing: profit is to business like oxygen is to humans. No sane person would argue that oxygen isn’t important (vital; essential even) to life. But oxygen is not the point of life. In fact, if someone were to get confused on this and start living as though the accumulation of more oxygen was the point of life, we’d probably say they’d lost their mind. They’d start building bigger and bigger tanks to store extra oxygen, and when local laws would prohibit more storage, they’d find ways to store their oxygen in tanks overseas. The laws of the land would prohibit their ever-expanding storage, so they’d create lobbies to change governmental laws so they could go get more. They’d try to steal (in “legal” ways, of course) oxygen from smaller or unwitting “competitors.” In short, they’d structure their whole lives entirely around the pursuit of more oxygen… and for what? This would be complete absurdity.

And yet…? (I think you see my point.)

A few months ago, I was at the Positive Business Conference in Ann Arbor, and during one of the Q&A sessions after an on-stage panel, a badass dude named Raj Sisodia spoke up from the audience. He said, “Maximizing any one thing in an interconnected system creates a destructive effect on the other components of the system.” He was speaking about the destructive power of focusing on maximizing profits alone (and thought the panel hadn’t been clear enough on the detrimental effects of this).

He also said: “The leader’s responsibility is to the long-term flourishing of the organization, not to shareholders.” We’ve gotten very confused about this aspect of business — we think the primary responsibility of our companies is to “maximize shareholder return,” but this idea is essentially like making your whole life about accumulating more oxygen.

Nothing is everything. Put another way: whenever we focus too much on one thing, we cause harm to everything else. This is true in pretty much all parts of life, as far as I can tell.

Why can’t we figure this out in the world of business?

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If you liked that post, then try these…

Do You Work Smarter Or Harder? by Josh Allan Dykstra on January 24th, 2011

Read This: BURST by Josh Allan Dykstra on November 19th, 2012

Consciousness, Ownership, and Paper Towels by Josh Allan Dykstra on October 3rd, 2014

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