In their offering Profits With Principles: Seven Strategies for Delivering Value for Values, Ira A. Jackson and Jane Nelson set out to examine business and whether the capitalist world should acknowledge any moral obligation. In the 1990s, capitalism took the world by storm.
By 2000, the love affair with capitalism had begun to fade. Over 70 percent of Americans surveyed felt that businesses had too much political influence and too much power. Ninety-five percent felt that American corporations owed something to their workers and the communities in which they operated. By the time the Enron and WorldCom scandals broke, the American public was already jaded, believing that greed and corruption had replaced the checks and balances used to govern companies.
In Profits With Principles, Jackson and Nelson contend that a new breed of company is needed—one that continues to value the bottom line but, at the same time, is community-oriented and interested in gaining the public’s trust. The authors believe that this is the only way capitalism will survive the challenges ahead. The successful companies of tomorrow, they contend, will have to be committed to advancing the public interest. With this ideal in mind, Jackson and Nelson identify seven principles that can serve as a framework for any company or businessperson who aspires to achieve long-term profitability while contributing to a better world.
Principle 1: Harness innovation for the public good. The idea is to consider ethical, social and environmental issues in addition to profitability, so that products and services do not just deliver on quality, but also serve the community.
Principle 2: Put people at the center. This relates to the quality of the relationships a company has with its employees, its customers, its investors and even its neighbors. Jackson and Nelson argue that leading companies recognize that it is the ideas and energy of the people who interact with a business that underpin innovation and transformation.
Principle 3: Spread economic opportunity. Companies should distribute wealth instead of monopolizing it.
Principle 4: Engage in new alliances. Collaborate in order to enhance core business performance.
Principle 5: Be performance-driven in everything. Focus on providing the best services and products to customers and to communities as a whole.
Principle 6: Practice superior governance. Develop and encourage transparent and honest interaction between business and government
Principle 7: Pursue purpose beyond profit. Emphasize that business is not only about money, that people matter also.
To strengthen their points and provide examples, Jackson and Nelson examine about 60 companies worldwide that are enjoying financial success without sacrificing community. The companies they look at include financial institutions such as FleetBoston, Citigroup and JPMorgan, which have started to reach out to underserved markets and “bank the unbankable.” These institutions provide financial services and training to low-income communities in the United States and internationally by developing innovative new products and services.
Similarly, pharmaceutical companies such as Merck, Johnson & Johnson and Pfizer are endeavoring to develop new business models and alliances to improve access to essential medicines and to invest in their local communities. These are just some of the companies that recognize the need to combine philanthropic ideals with long-term business opportunities. In doing so, they are starting to build new markets, loyal new customer bases, brand equity and new sources of profit.
Overall, Profits With Principles: Seven Strategies for Delivering Value for Values is extremely informative and persuasive. Jackson and Nelson back up their arguments with numerous examples and statistics. At times the reading becomes somewhat difficult; inattentive readers may lose track of the point being made in a particular chapter. At the same time, the use of charts and bulleted text to illustrate key points helps keep readers on track.
A well thought out book, Profits With Principles invites some consideration of what the role of business really should be and whether capitalism as we know it really needs to reinvent itself in order to continue to thrive.
Profits With Principles: Seven Strategies for Delivering Value for Values
Author: Ira A. Jackson and Jane Nelson
Reviewed by Soroya Brantley