It’s counter-intuitive, but companies worry too much about money. They remind me of a creature that only wants to inhale and never exhale, which is anathema to the Yin-Yang of Nature. They must learn to breathe normally, which is a process of give and take. It’s normal to “lose money” when it’s done for the right reasons. Not only will you live, but you will thrive in the future if you master this simple and natural process. Profit should be driven by holistic principles of company and customer health that bring the business to life, but we’ve made sure it’s driven solely by bottom line on a spreadsheet, whatever whatever the social repercussions. Shareholders are becoming more important than customers and that is wrong.
For example, although a bank may be quite profitable overall, it may have a branch that may not be owed rent, employee compensation, insurance, property taxes, low traffic, etc. Indeed, all branches could be considered superfluous with automated and remote banking services so widely available. Who needs friendly in-person services to register people, consult with them and help them with the various issues we encounter with accounts, checks and cash when they may be taken off the menu or transferred to another branch and that the bank still benefits, maybe even more then? Yes, the bank has every right to close a branch here and there, but beware! If you put too many customers at risk, they will seek alternatives. Your short term gains will be followed by a long term decline. Instead, think of these branch losses as marketing and community-building costs. The colder you are to customers, the colder they will be to you and the less loyal they will become.
Price gouging is immoral but often legal. This is when companies remove all concern for the people they serve and replace it with an absolute desire to extract and extract money from them. It is natural to be opportunistic in business and supply and demand are certainly two important forces but without the third force of care they are often excuses for greed and harmful when supply and demand are high. With a little caution, a company can decide to take advantage of the situation less and keep prices lower. If supply far exceeds demand, then yes, go ahead and raise prices, but do so with a sincere desire to lower them as soon as possible when supply is higher. Too often companies make the unfortunate choice to endure higher prices for as long as possible, even after supply has rebounded, capturing what we call a bargain. The fallout should be short-lived, not prolonged.
Voluntary erosion of your results is important because it is a time to give back, to breathe. I’m not talking about companies on the verge of bankruptcy, but about healthy and profitable companies that roll on the money. Why do we still need the government to step in and change corporate tax laws or impose windfall taxes or new regulations? Because companies only want to inhale. They want to eat their cake and still have it. If business logic included societal concern and customers were viewed as more than a financial means to an end, as real people to be cared for and helped, we wouldn’t need to monitor businesses.
It’s like saying that a certain amount of your profits is in an untouchable escrow account that belongs to your customers and you will enjoy spending it on them, rewarding them not only for their loyalty, but also for their crucial business role as funder. Of course, companies are often created by investors, but they are backed and supported by customers. Yet capitalism so often makes the return on investment for investors and shareholders a higher priority than the happiness of their main backers, the customers. It is a cold flaw in the thinking of capitalism, not capitalism itself.
Shareholders often want returns that don’t really belong to them, although they may not always be aware of it or think about it. It is not a monolithic group, but as varied as a schoolteacher’s pension fund, a hedge fund manager or a 401k. But a good return on investment doesn’t matter if it comes at the expense of the society in which teachers and fund managers live. Why even save money to live in a lousy world? Why not improve the lives of teachers while they are young and live them rather than after they retire? And why not make retirement more enjoyable by giving back with lower prices? Why is it always take, take, take? Always give and receive. Breathing.
Some pharmaceutical companies are an embodiment of the grab mentality. Except in their case, it may border on a kind of extortion – literally pay or die. This extraordinary antisocial greed is then amplified by higher insurance premiums and health care costs, leading even to poverty or terrible choices for the less wealthy. There are countless examples of healthcare overload and often involves a large chain of intermediaries, each playing their part.
Giving should be a team effort. It must be integrated into the corporate mentality. It must be taught in a business school. It needs to be a pillar of doing business in the future. Yes, take and enjoy your well-deserved profits but set aside 10% for people, your customers, your friends, the community. Do it across the entire supply chain. Make it normal and a matter of commercial pride.
Otherwise, expect social decay, increased unhappiness, lower quality of life, conflict, and eventually violent revolution. It’s true, perpetual hold always has a cost in any system, whether biological or monetary. Companies should strive to be integral, not separate and independent from society. They should have no illusions about extraordinary profits and should seek to invest them directly in the community in the the most efficient way possible, cut costs and give back. It is about exchanging a lower financial result for a higher social result. Not socialism. Social awareness and kindness. Socialism asks to care only about society which can hinder and stop innovation and demotivate inspired individuals. I’m talking about compassionate capitalism. It’s supposed to be fun, not expensive. It’s looking for opportunities to give when you can and want to do it because you love it.
It’s never too late to give back. Oil companies could send every known customer a $100 gas gift card to offset some of the pain they endured after the Great Pandemic. Apple could also send customers a gift of $100 or more, spending a trillion of their $1 trillion in cash. Too much cash in the crate is fake and looks like a Golem. Don’t worry, you will do more! Be bold, spend a little on your base, and do it often as part of your business ventures. Be sincere in your giving. Know why you are doing it. Not for marketing purposes (it’s automatic) but to improve people’s lives.
We should learn to identify particularly greedy corporations and shame them, and to praise and reward generous corporations. The market cannot always do it on its own as it was ideally supposed to, because there is so much hidden greed and a certain amount of generosity. We need to make it easier to identify hidden greed with greater transparency and, more importantly, instill giving and generosity as the foundation of doing business. Then we can really be proud of everything we build together and for each other. It is the why of the business that is more important than the how.
To make life better.