Mark Benioff Beats the Drum, But It is Not Being Heard … Yet

Mark Benioff Beats the Drum, But It is Not Being Heard … Yet

This week Mark Benioff, Salesforce’s CEO, inked a New York Times Op Ed titled “We Need a New Capitalism”.  The article was a follow-on from the Jamie Dimon led Business Round Table Statement of a Company’s Purpose which declared that companies must be accountable for more than shareholder value.

This Op Ed is an another beat in the growing procession of influential business executives extolling the importance of a broader perspective.  Unfortunately, the sound of that drum is not making an impact.

As you might expect from a West Coast tech executive, Benioff’s piece is full of data that highlights the challenges we face with income inequality and climate change. He is articulate in describing the changing role of business and government to address these issues, and he provides a few tactical areas where we all can take action.

But the article, like others from the Business Round Table executives, falls far short in explaining how to achieve the “New Capitalism”. Capitalisms core tenant is that businesses are primarily valued based on their expected growth, and executives are rewarded for delivering that increase in value.  

Growth is still the primary way executives generate “expected future profits”, and as long as that is the standard for valuing companies and paying executives, Benioff’s suggestions are just garnish. We can not create a new capitalism until we change the way we reward people.

The lack of a new reward system is a fundamental component lacking in this article.

That said, there is one line of the article that could be part of a path forward. While not the focus for Benioff, the sentence, “Research shows that companies that embrace a broader mission — and, importantly, integrate that purpose into their corporate culture — outperform their peers, grow faster, and deliver higher profits.” 

If our business and financial models start to incorporate purpose and sustainability – and discount firms that do not have these values, the incentive system will start to reflect these concepts.  If that happens, we will start to hear the music.

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