We’re still coming out of what can only be described as the worst financial downturn in several generations. In 2009, some Harvard MBA’s wondered if they and their like were part of the solution or part of the bigger problem. These MBA’s realized that the people they were aspiring to become, financiers, corporate managers and deal makers, were often the villains in the financial fiasco.
Of course, in response to the financial meltdown, governments have tried to regulate behavior. In the USA, the Dodd-Frank act requires that financial regulators create 243 new rules, conduct 67 studies, and issue 22 periodic reports. Rather than writing a rule book of conduct the young MBA’s had a better idea – they wrote an oath. It’s not a legal document and it’s not binding but it might surprise some. Rather than talking about maximizing profit as one might expect from young business grads, the oath leans heavily toward maximization of purpose!
So why is this important to a business and to a good strategy? “Incentives and Rewards” are a key part of driving any strategy execution. Get incentives set right and your team will be on board! However, many of today’s future leaders are more motivated by “purpose” over money and financial rewards. “Carrot and stick” rewards can turn an interesting task into drudgery and actually reduce performance!
Creating a profit is still at the center of any corporation but money’s ability to motivate people is highly questionable.1 The ability to make a positive impact on society or to create something innovative that benefits mankind seems to be more than enough motivation for a growing segment of the population.
Novo Nordisk, the Danish pharmaceutical company, reports what they call the “Triple Bottom Line”. Of course they report their financials, but they also report on their social responsibility and environmental scorecard looking for improvements each year. I’m sure their stock price is still evaluated by the profits they return to shareholder but the top talent they attract is likely drawn by the bigger purpose and socially responsibly ideals as much as big wages.
As you develop your strategy for 2014 and build in the incentives, ask yourself “What are you working for?”
THE MBA OATH
As a business leader I recognize my role in society.
My purpose is to lead people and manage resources to create value that no single individual can create alone.
My decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow.
Therefore, I promise that:
I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society.
I will understand and uphold, in letter and spirit, the laws and contracts governing my conduct and that of my enterprise.
I will refrain from corruption, unfair competition, or business practices harmful to society.
I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation.
I will protect the right of future generations to advance their standard of living and enjoy a healthy planet.
I will report the performance and risks of my enterprise accurately and honestly.
I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity.
In exercising my professional duties according to these principles, I recognize that my behavior must set an example of integrity, eliciting trust and esteem from those I serve. I will remain accountable to my peers and to society for my actions and for upholding these standards.
This oath I make freely, and upon my honor.
1. Drive The Surprising Truth About What Motivates Us, Daniel Pink