Tuesday, May 29, 2012

When Values Challenge Profitability


Building your Company’s Vision, by James C. Collins and Jerry I. Porras, introduced us to the importance of a strong vision at the foundation of a successful organization, demonstrating how “truly great companies understand the difference between what should never chance and what should be open for change, between what is genuinely sacred and what is not.” Core values of an organization should be unwavering, even in the face of challenge.  But what happens when the core values of a chairman and founder, and his organization, are what cause it to lose customers and profitability? 

In North Carolina, Bob Page, founder and chairman of Replacements Limited, publicly opposed the effort to ban the marriage amendment in that state.  While Fortune 500 companies in the region silently stood by, Page and his organization provided financial resources and spoke out against Proposition 8.  With such a divisive issue plaguing North Carolina, should corporations participate in the debate or maintain their neutrality for the sake of business?  In the case of Replacements Limited, is losing customers and profits worth the stand they took? Core values should drive the business and when those core values are challenged, it is essential that the organization demonstrate their commitment to them.  However, in doing so, Page has risked his business, which he founded in 1981. 

In Using the Balanced Scorecard, it is important that there is not a disconnect between the organization’s values and its day to day actions. For Mr. Page, by not getting involved in the debate, he would have contradicted what was most important to his personal and professional values.  

A Company’s Stand for Gay Marriage, and Its Cost
James B. Stewart, The New York Times
http://www.nytimes.com/2012/05/26/business/replacements-limiteds-stand-for-gay-marriage-draws-repercussions.html?_r=1&ref=business

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