Every business owner will have their own reasons for starting or owning a business. In 1970, the eminent economist Milton Friedman published A famous article In The New York Times where he said “The primary purpose of a business is to maximize profits for its owners or stakeholders…” Most reading of this blog wasn’t in business in the 1970s, so does Friedman’s statement still resonate with business owners today? العاب تربح منها فلوس
Think about how we do business today – the primary tools used to measure business success are the profit and loss statement and balance sheet. Even if you think your business exists for something beyond profit, the industry has a myopic view of what’s important based on what’s being measured.
Consider the current challenges facing many companies. One of the biggest problems today is employee turnover. Looking at a few numbers from the US Bureau of Labor Statistics, turnover has been, and continues to be, increasing as a major challenge. enzo casino
We’re seeing a significant uptick in 2020, but looking at 2016, turnover rates were significant across all industries included. The data shows that employee replacement is one of the most costly efforts for the company, not just cash/profit. Replacing knowledge and experience can be a slow and expensive process. Add to this the efficiencies that are negatively affected – change is costly. The year 2020 bore and magnified what had been a major challenge for companies. Looking at the increase from 2019 to 2020 – the education industry saw a 42% increase; Leisure and hospitality saw an increase of 65% – these numbers indicate that the rate of separation has gone from bad to worse.
The “mission” to fix the rotation
Many employers are feeling the negative impact of the sudden surge in employees leaving in 2020, and of course they must react to this effect if they want to stay in business. But if we can back off, we may be able to treat the root, rather than the symptoms.
Over the past few decades we’ve seen an evolution in how companies position themselves and these changes have been positive. One part of the development that came to the fore was the idea that every company should have a vision/mission statement. I will not try to distinguish between vision and mission statement. For our purposes, we will use “mission” to include everything that is meant by both a vision and a mission statement.
Part of the value of a mission statement is helping employees get around one goal. الكسبرس The idea is to give people a reason to work there that goes beyond just getting paid. Well, sounds like a great concept, but how does it generally work (remember the US Bureau of Labor Statistics mentioned above)?
The real challenge is consistency. If you have a truly inspiring mission statement, but act according to Friedman’s statement that the only real purpose of the business is to maximize profits for its owners – what message will be heard the loudest?
If this challenge is something you’ve been struggling with, our next few blogs will explore some of the ways you can shift away from 50-year-old Friedman’s business dogma and embrace 21st century HRM practice that will help you retain Most Valuable Asset – Persons.
Written by Data Safety