The Six New Rules of Business: Creating Real Value in a Changing World

"Judy Samuelson is the executive director of the Aspen Institute Business and Society Program . She comes at the relationship between business and society from an insider perspective rather than as an academic or scientist. In Six New Rules for Business she argues for a long-term approach to business success, that every responsible (and effective) business has a purpose other than to provide short-term profits for shareholders. She argues that good business today is not driven so much by capital (because capital is no longer scarce), but by talent, particularly internal talent and by the capacity to innovate. Business today is also affected externally by factors it can’t control. What’s its level of trust, its reputation among customers and society at large? One of the things I’ve noticed is that the long-term interests of business often coincide with the long-term interests of nature and society; short-term interests do not. For the past 50 years, it has been the dogma of businesses and of business schools that maximizing shareholder value is the only real measure of business success. In effect, the stock price becomes the primary product of any company. Employees have a different perspective. If you work for a company you know that profit is necessary to a business, as is air to breathing. But we don’t wake up thinking, “I’m going to breathe air today.” We wake up thinking about what we’re going to do. We want to create or improve certain kinds of products or services. We think about how we want to change things. Those are the motivations that drive people in business. I’ve come to believe over the past ten or fifteen years that the best-kept secret in business is the motivating power of values. People don’t want to talk about that around the business table because it sounds too squishy. But in fact, it’s a strong motivator. “The best-kept secret in business is the motivating power of values” I’ll give you a quick example. We got into a conversation with Samsung Electronics about the problem of microfiber waste from our clothes, and from everyone’s clothes, but particularly synthetics because they persist in the environment—they’re not captured by washing machines or municipal water filtration systems. I had a talk with executives sponsored by Samsung’s sustainability department, and a couple of them got the idea, “We make washing machines, let’s help solve this.” Initially, many of their colleagues were skeptical, but once they figured out how to successfully filter out 98 percent of the microfiber fleece, it became a source of pride for the whole company. I think achieving something, designing something that works, or doing anything creative that turns out to be effective, is a much stronger source of pride than boosting stock price artificially or raiding a competitor and sucking out its value. When we introduced organic cotton, between 1994 and 1996, we had a really hard time. Because we were buying organic cotton from farmers, we broke our connection to the global supply chain. The spinners, who turn the fiber into yarn, wouldn’t talk to us because they hated organic cotton. They said it gummed up their machines. Finally, this guy in Bangkok, who ran one of the largest spinning mills in the world, figured out how to cool the shop floor so the machines wouldn’t gum up. We asked him, five years later, “Why did you even talk to us? We were so small and you were so big.” He said, “I guess you can call me a closet environmentalist.”"