Rethinking the Social Responsibility of Business, a debate on the correct focus of business:
Not that we’re only concerned with customers. At Whole Foods, we measure our success by how much value we can create for all six of our most important stakeholders: customers, team members (employees), investors, vendors, communities, and the environment.
Great – my previous post on the purpose of a business. John Mackey, the founder and CEO of Whole Foods, closes the debate with:
Someday businesses like Whole Foods, which adhere to a stakeholder model of deeper business purpose, will dominate the economic landscape. Wait and see.
I agree. In the debate, he stresses that he believes in the marketplace and that this focus on providing value to all stakeholders is in the best long term interest of the enterprise (as apposed to the sole focus on profit presented by Milton Friedman). I agree with John Mackey.
Related: Compensation at Whole Foods
I also agree. What many people don’t realize is that free markets respond to value, not just financial value. The rapid success of the Prius and Civic hybrids, and the penetration of hybrids into high-end market vehicles such as the Lexus 4 series, is evidence of this. From a pure financial standpoint, the additional cost does not offset the slight reduction in gas cost. However from a less tangible environmental stewardship perspective it does. Companies that have a deeper purpose, or at least truly understand nonfinancial value, will capitalize.