How Companies and CEOs Will Change Post Recession

Continuing on the thoughts from my Monday post this week, HR is not the only group that will change dramatically due to the influences of this recession and the causes of it. The company as an entity will itself change.

As the Washington Post pointed out, “Since roughly the mid-1980s, the American public corporation has been run primarily for the purpose of creating vast wealth for its senior executives.”

This is a fundamental problem that led ultimately to the situation we’re in today. Focusing on shareholder (short-term) goals has led to bad decisions with terrible long-term impacts. When only the shareholder is considered to be a worthy stakeholder, then the promise of the capitalist market is lost.

In the same vein, Harvard Business School recently published a Q&A with the authors of High Commitment, High Performance: How to Build a Resilient Organization for Sustained Advantage. Key observations in the interview include:

“CEOs of HCHP (High Commitment, High Performance) companies think very differently about their employees. They see them as an asset and care about them as people. As a result they manage downturns differently from the norm, too. They had a multi-stakeholder view of the firm as opposed as a shareholder view. The purpose was to add value to employees, customers, community, and society—not just shareholders. Their purpose is to leave a legacy of a great firm. "

I am looking forward to this change. We already work with visionary “HCHP” CEOs such as this at numerous clients of ours, including Intuit, Dow, and Thompson Reuters. These leaders truly understand valuing employees, who in turn value customers, who are ultimately responsible for keeping your company in business. It’s not the shareholders you should be focusing on – it’s your entire community of stakeholders.

Who does your executive team serve? The shareholders primarily or your entire spectrum of stakeholders, leading with employees? Be sure to take our weekly poll.