Being progressive and pro-business are not mutually exclusive things. This may sound obvious, but the fall-out from the recent General Election results have fuelled this debate in the press and on social media. This is not simply because ‘businesses create jobs’, as a situation where anyone has to rely on a job that doesn’t pay enough to live on can not be defined as ‘progressive’. It is to say that by investing in people, we invest in business. As the story of Bob Chapman, CEO of an engineering equipment firm, demonstrates.
When Mr. Chapman took over in 1988, Barry-Wehmiller, Inc. was not a great place to work. Employees were not trusted, only being allowed to move from their station when the factory bell allowed. The management had even ordered that, once used, all equipment had to be locked away for fear of vandalism and thievery from their employees. When the going got tough and savings needed to be made, the wages and jobs of employees were always first on the chopping board. Chapman had even seen how the camaraderie of lunch in the canteen abruptly turned to solemn silence when that bell signalled their return to work.
Seeing a company that was clearly under-performing and struggling financially, Chapman changed its whole approach. All employees were able to take breaks whenever they wanted, had keys to the equipment they needed and they were assured that if the going got tough, their jobs and wages would be the last things to be cut back. People working at Barry-Wehmiller were made to feel trusted, valued and safe in an organisation they now felt inspired to work for and reciprocate the loyalty that had been placed in them.
Their profits boomed. Since 1988, Barry-Wehmiller grew by an average of 20% a year and is now valued at $1.5 billion. Chapman dedicates this success to his idea that building a successful business ‘is not about building great profits, but building great people’, rejecting the idea that businesses do well when they squeeze the wages and conditions of their employees. His lesson for politicians is this: if you strive to get the best out of your people, you will get the best out of your businesses and economy.
Aside from providing healthcare whenever you need it and education whenever you want it, government could stimulate entrepreneurship by providing guaranteed income security for all its people. For entrepreneurs this is ideal, meaning that their basic necessities are all covered whilst they fully focus on their idea. Would Steve Jobs would have been able to be the founder of Apple if he didn’t have his room, board and electricity costs covered whilst he worked on the first Apple Computer Prototype in 1976? The answer is surely no.
And what about raising the minimum wage? Nick Hanaeur, an original investor in Amazon, has actually argued that widening income inequality is bad for the economy and bad for businesses. As when employees are not paid enough to live on, then they have little money to spend. Indeed, it was 1930s industrialist Henry Ford who had the smart business sense to pay his employees enough so that they could buy his cars.
It is also about believing that businesses can serve a wider purpose. Author Simon Sinek pinpoints the roots of Apple’s success not in its products, but in its unashamedly progressive mission. ‘In everything they did’, he said, ‘Apple believed in challenging the status quo’.
Being progressive and pro-business are not mutually exclusive, but mutually dependent. Businesses have a vital role in transforming society and people’s lives. And businesses that aim to do so are businesses that will do well.
Image: Ken Teegardin, FLICKR