Restoring Trust in our Companies – Part A

Henry Mintzberg Blog – TWOG

PART A. THE SCENARIO THAT IS KILLING OUR COMPANIES

Adapted from Enough of MORE: Better is Better, posted here on 9 November 2017.

I am finding it increasingly difficult to trust many of the large enterprises with which I deal—retailers, phone companies, airlines, others.  Some I find trustworthy, many I don’t.

For example, I shop at Costco, in which I have full faith. Just about everything that I have experienced there, consistent with what I read about the place, has left me with the impression that they are working for me. So if I see something there that fits my need, I just buy it. No investigation.

Not so Amazon. Their website is a free-for-all, with prices for the same product all over the place, plus little tricks here and there, like discovering after I ordered something in blue that it’s twice the price of what was displayed in gray. Amazon’s tagline should be: “Buyer beware!” So I shop there only when I must, annoyed that I have to investigate everything very carefully, while I wait for a convenient competitor to arise. (Amazon beware: I am not alone.) 

Why is this happening? I put it down to “the dumbest idea in the world.” So declared Jack Welch, the revered chief of General Electric (until he left), who a decade earlier with his fellow CEOs famously championed the idea called shareholder value, which has much to do with shareholders but nothing to do with values.

Only the shareholders count, not the customers, not the workers, not the local community. And count these shareholders do, every quarter. Miss the targets in one quarter, and the pressures arise to make up for it in the next—for example, by throwing a few thousand workers to the wolves of Wall Street, or finding some clever new way to rip off the existing customers. (Who says the airlines aren’t creative? They are masters at inventing new add-on changes for existing services.) 

Consider this scenario, all too common in the business world today.

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