People come before money

I’m an idealist I sort of imagined a
world that’s different to the world that
we live in now I imagine a world in
which the vast majority of people wake
up every single morning inspired to go
to work feel safe when they’re there and
return home at the end of the day
fulfilled by the work that they do and I
believe this thing called fulfillment
the ability to say that I love my work
that I love what I do I believe that it
is a basic human right and not a
privilege we treat it as a privilege you
know you go out with your friends and
somebody says I love my job and the rest
of us go oh my god you’re so lucky like
it’s a lottery that they had won or
something and and so I just believe that
fundamentally that we as the workforce
are we have the right to demand that the
places where we work provide us that the
irony is it’s actually good for them
that’s the big joke we’re more engaged
when we offer more discretionary effort
we offer our big ideas simply because
they said come here and enjoy yourself
and feel safe and have a good time and
let us help you grow many of the
traditional business practices that are
considered normal today are left over
from the 1980s and 90s remember the 80s
and 90s were boom years most companies
grew it was a time of relative peace and
it was a kinder gentler cold war we
weren’t practicing hiding under our
desks in school and a lot of the
business philosophies that were being
espoused and proposed were for those
times so the concept of shareholder
supremacy for example was a theory
proposed from Harvard in the late 1970s
just a theory the concept of using mass
layoffs to balance the books was a
practice that did not exist in the
United States prior to the 1980s did not
exist right the concepts of rank and
yank where you
stack your employees based on the
performance and their contribution to
the stock price you fight you you
promote the top 10% and fire the bottom
10% and you create an environment in
which people compete against each other
inside the company right by the way
that’s what dictators do you keep the
people divided and you stay in power
because dictators fear the people right
so say it’s the same thing these are all
fantastically good theories for boom
years and for the short term we also
dismantle glass-steagall in this time
period it’s not a Republican or Democrat
thing because you had Republican and
Democrat president over this period and
glass-steagall was the act that was
passed after the Great Depression to
prevent another Great Depression from
happening amongst other things one of
the things that did was it prohibited
investment banks and retail banks
existing in the same institution which
is what was allowed prior to the Great
Depression right do you know how many
stock market crashes we had prior to the
dismantling of glass-steagall zero we
had zero stock market crashes for 50
years
then they dismantled glass-steagall in
the 1980s and 90s and we had the the
2009 I was at 87 dot-com crash and 2008
we’ve had three right but it was really
leaders like Jack Welch who promoted
these theories of the day for a very
different time and they have become so
normal today that we don’t actually
realize how backwards they are we talked
about layoffs that we announced them on
the news as if it’s nothing
in fact worse when a company announces
layoffs the stock price goes up and if
you’re incentivized based on stock value
uh-huh a few years ago Citibank
announced record high layoffs the exact
same year that they announced record
high average bonuses figure that one out
right and the point is is these systems
though they may be normal are wrong and
broken and go completely contrary to the
basic human right that we all are
entitled
and by the way GE needed a 300 billion
dollar bailout in 2008 because the
theories that they espouse are not good
for the long-term they are good for the
short-term so for me to meet a company
like next jump a company that when they
talk about growth they mean their people
not their bottom line and a company that
understands though money is important it
is the fuel for the organization of
course money is important because the
more money you have the more fuel you
have to make the organization run this
isn’t it’s not a hippie commune but the
point is is that people come before not
money I sit in the audience’s of lots of
corporate events I’ve never met a CEO on
the planet that doesn’t believe people
are important the problem is the
decisions they make would be contrary to
the things they say they stand there
with their list of priorities and it
says number one priority growth number
two priority shareholder value number
three priority customer number four
priority employee see our people are
important number four even when they say
customer first that means your employee
is least number two right and the irony
is when you take care of your employees
your employees take care of your
customers your customers take care of
your shareholders and then and the big
joke is that the numbers prove it the
numbers prove it you look at people
focus companies they outperform numbers
focus companies over the long term
dramatically GE versus Costco Costco
year after year after year criticized by
Wall Street for having stuck a flat
stock price but if you compare the price
of Costco stock to GE over the course of
the past thirty years you’ll see that GE
made 600 percent of its money when the
same year that if you if you invested
the years at Costco in public would I
say six hundred percent S&P 500 600
percent Costco twelve hundred percent
double 2x it’s good for the shareholder
I can no longer be accused of being a
crazy idealist
if what I imagine exists in reality
that’s why companies like this are very
very important for us to study do they
have everything right of course not do
they have a are they trending in the
right direction absolutely are they
compare the operating completely counter
to what we consider to be normal
business practice of the day you bet
they are and here’s the best part their
numbers prove it so for all the cynics
out there who believe that numbers
matter numbers come first and
performance comes before people guess
what they outperform their competitors
year after year of the year they
surprise even themselves study that book
and study this company because mark my
words if we have anything to do with it
in 10 or 20 years we will completely
undo all the nonsense that basses like
Jack Welch promoted in the 80s and 90s
is that enough okay