Well, must say that was quite weird – to switch on Newsnight tonight and find that the chief economist of the Bank of England had been thinking the same thoughts as ones running around inside my own head.
Andy Haldane (for it is he) was saying that the extreme primacy of shareholders is damaging capitalism.
His interview has forced me into belatedly putting pen to paper (or Mac to Blogger as it is nowadays). I wasn’t coming at it from quite that angle, but had some weeks ago intended to say the following…
I was thinking about the relationship between the great tech giants: Microsoft, Amazon, Apple, Facebook and Google - and how one might coach their chief executives to triumph over the competition.
My thesis was simply this – that the winners in the 21st century corporate wars will be the ones that best balance three sets of stakeholders at the core of what they do: the owners (shareholders), the employees and the clients. It struck me that historically these companies have by habit and culture ‘weighted’ these three interest-groups rather differently.
For example, although Amazon preaches the gospel of client-centric design, increasingly one gets the impression the company is consumed by the desire to satisfy shareholders – initially at the expense of its lowly employees – and perhaps now even relegating its own clients to a poor second – as witnessed by their increasingly aggressive up-sell techniques. As with the banks, the ‘lifeblood’ of their business, their client base, at some imperceptible point inflects to become a passive cow, there to be milked.
Anyway – it struck me that running these companies is like spinning a plate on a pole. Now imagine that there are three weights – placed at even intervals along the circumference of the plate. If the weights are all about the same, the plate spins nice and smooth. But if one or two of the weights are heavier, then the plate’s orbit inevitably becomes lopsided.
If the differential isn’t too extreme, the plate continues to spin – just at an inclined orbit. But if the difference gets too extreme – then of course the orbit is no longer sustainable and the plate comes crashing to the ground.
It is my view that company failures are often down to an inability to balance these three sets of stakeholder needs properly over the long haul. Orbits become lopsided, the fall comes and disintegration follows.
My intention had been to pitch this as some kind of smartipants business insight. But seems I wasn’t so clever after all. The same thoughts are out there. But at least I should console myself that they are being broadcast by the chief economist of the Bank of England.