Born in South Africa, Brett Johnson lived in Silicon Valley for over 30 years. He co-founded The Institute for Innovation, Integration & Impact in 1996, which has worked with over 400 companies around the world to discover a Purpose that is bigger than the bottom line.
With a passion for Repurposing Business, Brett and his wife regularly facilitate life-work integration training courses in the United States, South Africa, India, Indonesia, Madagascar, Nigeria and Zimbabwe. He is the author of 14 books.
“[The only] social responsibility of business is to increase its profits.” Milton Friedman, 1970
Ideas have consequences and Friedman’s notion of maximizing shareholder value placed shareholders at the top of the who-to-satisfy hierarchy. The idea that maximizing a return for owners was the guiding light that kept management focused has given shareholders fabulous returns, but destroyed careers, decimated towns and cities, and eroded the moral fabric of businesspeople. Pragmatism became the God of business and Mammon the patron saint of capital markets. (Mammon means ‘greed deified’.)
“The mantra that executives and corporate board members have a duty to maximize shareholder value has become so ingrained that many people assume it must be codified somewhere. But legal experts say there is no statute … requiring corporations and executives to maximize shareholder value.” Washington Post
Enlightened business leaders are rethinking who the stakeholders are in their organizations, adding employees, customers and their communities. This has the potential of giving a broader, and longer range, focus for management. The move towards Corporate Social Responsibility (CSR) and related Corporate Social Investments (CSI) was sometimes enforced by mechanisms such as South Africa’s Black Economic Empowerment (BEE). In other countries the rising tide is Environment, Social, Governance (ESG). Just as there are BEE scorecards there are attempts to create ESG scorecards, but with little agreement on definitions and measures.
Broader scorecards can mandate change or encourage new thinking, but can the heart be changed through legislation or pressure? And are these changes enough to truly rediscover the purpose of business and its role in society? Is there a biblical framework that draws the right circle around stakeholders while fueling the necessary from-the-heart passion for people?
We see in scripture a concept more powerful than either shareholder or stakeholder theory, and it is the notion of household. In Genesis 12 we read, “The Lord had said to Abram, ‘Go from your country, your people and your father’s household to the land I will show you. I will make you into a great nation, and I will bless you; I will make your name great, and you will be a blessing.’”
In scripture, the concept of household was pervasive. Noah built an ark for the salvation of his house. Joshua declared that his house would serve the Lord. In the New Testament, we see at least six instances of salvation coming to a whole household… all at the same time. Heads of households sought the welfare of everyone in their care. The very word ‘economics’ comes from oikos which means ‘household management’.
At The Institute we have worked with thousands of business leaders from hundreds of companies around the world. We encourage them to get into God’s business and align every aspect of their companies with his ways. It doesn’t do much, however, if they do not have God’s heart, and the ‘ah ha’ moment often comes when CEOs, Managing Directors and business owners realize their business is a household, they are heads of households, and that an entire household can be saved. They are the only pastor many people will meet. God holds out the same promise and responsibility he offered to Abraham – blessed to be a blessing, a covenant with their house. When they ‘get’ this, then everything changes. They want for their oikos what they want for their biological family… abundant life today, and in eternity. You seldom need a Balanced Scorecard, a BEE scorecard or an ESG scorecard for a family. When businesswomen and men lead their corporations with a heart for their households, everything changes.
We worked in Jakarta with a business leader who had 50 employees. Once he grasped the household concept he decided to visit each family to ascertain whether their bathroom facilities were good enough for someone who worked for a Christian. (All employees were of another faith.) He committed to remodel the bathrooms that were inadequate. When we visited him a few years later we asked, “How is it going with the bathrooms?” He told us he was no longer remodeling bathrooms. (We thought we had seen the death of a good story.) “When I got to their homes and saw houses built over rivers, walls with holes in them… I decided to do whole houses!” He leveraged the company balance sheet to get mortgages to fund the renovations of entire houses. He was a in a low margin business, yet he found a way once he understood his employees were part of his household.
The purpose of money
To fully debunk the myth of maximizing shareholder value, we need to rethink the purpose of money. When I ask businesspeople, “What is the purpose of money?” I hear phrases such as “a medium of exchange,” “a store of value,” and “extending the kingdom of God”, which can be a rather vague catchall statement. Few say, “A purpose of money is to help fund the calling Jesus gives us. Since a business should help its stakeholders walk out their calling, a good purpose of profit is to help the whole household fulfill their purposes on earth.”
Money is a resource that can be a force for good. It can also be a force for evil when it is used for the wrong purposes. When we shy away from the potential good capital can do, we create a distance between our purpose on earth and our deployment of capital. It has been said capital moves around to find the best returns. We therefore need to define ‘best’ in our own lives. Certainly this includes eternity – we work for an eternal return. Our time horizon is long and our definition of success outstrips asset accumulation. Thinking about resources should include a double-entry thinking.
Blessed to be a blessing
In the world of accounting we speak of double-entry bookkeeping where debits equal credits. Top and bottom-line theology is similar: “We are blessed [top line] so that you can be a blessing [bottom line].” I have heard there are about 340 instances of top and bottom-line theology in scripture.
Years ago a real estate broker was going through our Repurposing Business Training in Silicon Valley. I looked across and noticed this large, all-American man had tears running down his cheeks. I asked him, “What is going on?” He told me that many years earlier he left his career as a teacher and became a real estate broker to prove that God could provide. “I just saw a picture of an hourglass – for 17 years God has faithfully poured into the top of the funnel, but I have not let it flow out in the same measure.”
When we lose sight of the ‘so that’ in scripture, we mistakenly think profit is only for shareholders. In the long run, businesses suffer, as do the communities in which they operate. As a business leader, whether you work in a corporate or your own company, how do you ensure fair profit for all? Can you sow sufficient capital back into the business for growth, and ensure a fair portion is shared with the household for their good? Can you teach your household to invest to grow their own independent asset base?
The false mandate of maximizing shareholder value has stifled innovation, eroded trust, squandered social capital, and promoted immediacy over legacy. The world-blessing mindset God intended for his marketplace ministers has been shrunk by a lie. The Hebrew notion of economics is much, much wider. It comes out of an abundance mentality rooted in the heart and ways of God:
“When I was in Israel recently a resident of Jerusalem explained that the Hebrew word for economics is made up of three words: all+all+God. Economics, broadly defined, is a God-concept, not a recent Western invention.” Brett Johnson, Repurposing Capital
Let’s return to ‘all+all+God’ thinking and practices when it comes to profit.