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« Kanri Yakyu | Main | Search vs. discovery »

The smart CEO's guide to social justice

It seems as though profit-maximizing business people ought to be speaking up loudly and often for three changes in our culture, changes that while making life better also have a dramatically positive impact on their organizations.

Minimum Wage: Three things worth noting:

  1. Most minimum wage jobs in the US can't easily be exported to lower wage places, because they're inherently local in nature.
  2. The percentage of the final price of a good or service due to minimum wage inputs is pretty low.
  3. Many businesses sell to consumers, and when they have more money, there's more demand for what they sell.

Given that for even the biggest organizations there are more potential customers than employees, the math of raising the minimum wage works in their favor. More confident and more stable markets mean more sales. Workers struggling to make ends meet are a tax on the economy.

(Consider the brilliant strategic move Henry Ford made in doubling the pay of thousands of his workers in 1914. The assembly line was so efficient that it created profits—but only when it was running, and high turnover made that difficult. By radically raising pay, Ford put pressure on all of his competitors (and on every industry that hired the sort of men he was hiring) at the same time that he created a gateway to the middle class, a middle class that could, of course, buy his cars, whether or not they happened to work for him). Also, consider this point of view...

Climate Change: The shift in our atmosphere causes countless taxes on organizations. Any business that struggled this winter due to storms understands that this a very real cost, a tax that goes nowhere useful and one that creates countless uncertainties. As sea levels rise, entire cities will be threatened, another tax that makes it less likely that people will be able to buy from you.

The climate upredictability tax is large, and it's going to get bigger, in erratic and unpredictable ways.

Decreasing carbon outputs and increasing energy efficiency are long-term investments in global wealth, wealth that translates into more revenue and more profit

Anti-corruption movements: The only players who benefit from corruption in government are the actors willing to race to the bottom--the most corrupt organizations. Everyone else is forced to play along, but is unlikely to win. As a result, for most of us, efforts to create transparency and fairness in transactions are another step toward efficient and profitable engagements.

Historically, when cultures clean up their acts, get more efficient and take care of their people, businesses thrive. It's not an accident, one causes the other. 

In all three cases, there's no political or left/right argument being made--instead, it's the basic economics of a stable business environment with a more secure, higher-income workforce where technological innovation leads to lower energy costs and higher efficiency. 

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