90 Minds Community

Sound familiar? This is a great article about some well respected business leaders. It underscores the importance of businesses sticking to their knitting and not chasing the stock market / shareholders. One of the biggest ills with the stock market is the tendency for public organizations to focus on short-term thinking to hit growth numbers at all costs instead of focusing on the long-term and investing in innovation and marketing. It happens to most public companies. Organizations get in to a rut where they chase the next quarterly result, inevitably management misses numbers, the execs all get replaced, the next round of new ideas are launched, and the cycle starts over again. It's a rare company that can break this trend. Good read. http://www.forbes.com/sites/stevedenning/2015/02/05/salesforce-ceo-slams-the-worlds-dumbest-idea-maximizing-shareholder-value/

Good article! Good point! Thanks for sharing!

I think this (pulled from the article) resonates with how many partners feel about Sage in particular (although the problem is with all public organizations): ""The theory [of maximizing shareholder value] has contributed to: - pervasive short-termism; - diverted human and financial resources from needed investments in innovation; - dispirited both employees and managers, leading to pervasive disengagement; - generated ""bad profits"" that undermined customer loyalty; - caused excessive ""financialization"" of the economy, making it vulnerable financial crashes; - incentivized CEOs to become financial engineers and companies to lose their entrepreneurial mojo; - led firms to pursue the extraction of value, rather than the creation of value; - undermined the economic recovery from the Global Financial Crisis; - drastically reduced rates of return on assets and on invested capital; - appropriated gains that flowed from workers' improvements in productivity; and - led to secular economic stagnation and increasingly unsustainable economic inequality.

Maximizing shareholder value is a relatively new concept. Lots of successful investing was done before it was conjured up and pushed on the world in the late 70's. It was the main justification for the corporate raiders then and since.It is as bogus as thinking the ""market is rational"" always. For a number of reasons, I think that the SH focus will decline over the next 2 decades.

My understanding of what CEO Stephen Kelly stated in his meetings with Sage team members during his Irvine visit was that the priorities (for key to success) are: 1. Customers 2. Colleagues (Sage employees) 3. Business Partners Not sure that shareholder value was mentioned.

And in a meeting with partners it would probably be: 1. Customers 2. Partners 3. Colleagues