It’s all about the money.....
A fashion seems to have developed over the last few years around describing business as something other. “Wealth creators should be treated as heroes” cries the Telegraph. “Let the job creators in” pleads the Economist. We have lifestyle businesses and we have social enterprise. Against the backdrop of decadent corporatism we have this idea of socially aware business founders in it for the good they can do rather than money. Poppycock I say (BS for my American friends).
Whilst the purpose of an enterprise (as in an endeavour) or organisation is to achieve its goals the purpose of a business is to generate surplus cash - not jobs, not GDP growth, not opportunity. Of course in generating that surplus labour may be employed, money may circulate and opportunities may arise – but these are happy by-products. At this point you may be tempted to stop reading. You may feel I don’t understand that in the future business will have to be more socially aware, more engaged. The problem with this position is that it suggests this is a future state. Go back to your Adam Smith and you will recall “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Looking after customers makes sound financial sense – they come back – and there’s a few places I’m not going back to! Competition encourages good service – providing staff are aware. How many times have you been made to wait in a ‘dippy hippy’ cafe while they “like, you know, sort out, like, this stuff, like, we’ve like just got back from Indo, like and it’s really hard getting back into it”. I’m, regrettably, off to Starbucks.
Closely allied to the idea that we are in business for lifestyle purposes (lifestyle not meaning BMW and swimming pool of course) is the idea that the whole country needs to move towards entrepreneurship. “Entrepreneurs can lead us out of recession” with Julie Meyer acting as Field Marshal it seems. Careful examination reveals the flaws in this battle plan. Whilst rapid growth is often achieved in small firms by definition they start from a low base. Doubling the number of staff is brilliant and from small acorns and all that – but moving from 10 to 20 staff in a year puts you alongside the recruits a Plc picks up a day. Added to this is the worrying underbelly of this drive towards entrepreneurs, or perhaps we should call them freelance, or, why not give them their proper name – casual labour. Too often the desire by larger companies is to outsource part of their labour need to very small, very expendable firms. This trend is encouraged by public sector needs to show involvement with the private sector and grant initiatives. These firms don’t last. (My background is in the ‘subby’ fuelled world of construction).
Of course true entrepreneurs can and do contribute to economy. From Smith’s self interest to Schumpeterian creative destruction they have a role in managed risk and adventuring. We need the crazies, the hungry and the egotistical – but let’s not confuse that with self-employed subcontractors. We need young people, all people in fact, to get a better sense of enterprise, of risk and challenge and of customer service and manners. We need to foster creativity and technology and allow people to grow. But what we don’t need is any more kids pitching to a ‘dragon’ a way of selling sweets to their classmates or an app that tells you how many minutes until the holiday.
Excuse me while I go make some money...........
A fashion seems to have developed over the last few years around describing business as something other. “Wealth creators should be treated as heroes” cries the Telegraph. “Let the job creators in” pleads the Economist. We have lifestyle businesses and we have social enterprise. Against the backdrop of decadent corporatism we have this idea of socially aware business founders in it for the good they can do rather than money. Poppycock I say (BS for my American friends).
Whilst the purpose of an enterprise (as in an endeavour) or organisation is to achieve its goals the purpose of a business is to generate surplus cash - not jobs, not GDP growth, not opportunity. Of course in generating that surplus labour may be employed, money may circulate and opportunities may arise – but these are happy by-products. At this point you may be tempted to stop reading. You may feel I don’t understand that in the future business will have to be more socially aware, more engaged. The problem with this position is that it suggests this is a future state. Go back to your Adam Smith and you will recall “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Looking after customers makes sound financial sense – they come back – and there’s a few places I’m not going back to! Competition encourages good service – providing staff are aware. How many times have you been made to wait in a ‘dippy hippy’ cafe while they “like, you know, sort out, like, this stuff, like, we’ve like just got back from Indo, like and it’s really hard getting back into it”. I’m, regrettably, off to Starbucks.
Closely allied to the idea that we are in business for lifestyle purposes (lifestyle not meaning BMW and swimming pool of course) is the idea that the whole country needs to move towards entrepreneurship. “Entrepreneurs can lead us out of recession” with Julie Meyer acting as Field Marshal it seems. Careful examination reveals the flaws in this battle plan. Whilst rapid growth is often achieved in small firms by definition they start from a low base. Doubling the number of staff is brilliant and from small acorns and all that – but moving from 10 to 20 staff in a year puts you alongside the recruits a Plc picks up a day. Added to this is the worrying underbelly of this drive towards entrepreneurs, or perhaps we should call them freelance, or, why not give them their proper name – casual labour. Too often the desire by larger companies is to outsource part of their labour need to very small, very expendable firms. This trend is encouraged by public sector needs to show involvement with the private sector and grant initiatives. These firms don’t last. (My background is in the ‘subby’ fuelled world of construction).
Of course true entrepreneurs can and do contribute to economy. From Smith’s self interest to Schumpeterian creative destruction they have a role in managed risk and adventuring. We need the crazies, the hungry and the egotistical – but let’s not confuse that with self-employed subcontractors. We need young people, all people in fact, to get a better sense of enterprise, of risk and challenge and of customer service and manners. We need to foster creativity and technology and allow people to grow. But what we don’t need is any more kids pitching to a ‘dragon’ a way of selling sweets to their classmates or an app that tells you how many minutes until the holiday.
Excuse me while I go make some money...........
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