Enduring businesses are built on values – but what do you do when your values lose you business? If they are true fundamental values, you must walk away.
The internal conflict at Cambridge University Press is a great illustration of when happens when powerful forces point in opposite directions – the desire to maximise profits and the desire to be true to fundamental values. There is no doubt that their business will suffer in China as a result of their decision to keep publishing the articles the Chinese government asked them to withdraw. This question is far from academic – at some time in the future, every single multinational in the world will need to decide how far they will bend to stay on the good side of the government in their most important market in the world. Apple has already removed VPN apps. This is unlikely to be the last request for censorship they get, and compliance puts companies on a slippery slope – we have already compromised our values, may as well do it again.
If you believe in the Jensen and Meckling argument beloved by capitalists that the singular goal of a company should be to maximize the return to shareholders, then there is no conflict – just update your values page on your website as needed to suit the business environment.
Equally, you could argue that there is no conflict, because publishing the articles is maximising shareholder value……in the long run……because the principled stand will make CUP more attractive to academics, and growth elsewhere will offset lost China revenues.
The most interesting situation is when there is a clear trade-off between values and long term financials that cannot be fudged. In fact, this is the only time when your organisation’s true fundamental values will be clear (or matter). News that the leaders choose values over profit resonates across the company the way a PR statement……evaporates?
The Cambridge University Press has it easy, as part of an NGO without return-hungry shareholders to worry about. And access to knowledge is about as fundamental as values get for a University – it could be the only thing academics agree on! Yet even they got the initial decision wrong – it was only when voices from their community weighed in that they realised their mistake and corrected themselves.
In doing this they have reaffirmed what they stand for.
The Bottom Line
Many companies have values statements, but most of them are bland motherhood values like “integrity” that give managers no guidance when it comes to choosing whether to do this dodgy deal to meet budget this quarter.
True fundamental values bring meaning and purpose to a company. Think for yourself about a big decision you took personally, when you chose a fundamental value over financial gain. Maybe you moved from a high paying job to help a small organisation. What did it feel like? What extra meaning did it bring to your life? There is more to life than dying with the most toys………….