People Over Profit – Summary of Summary

Of course, the story of corporations sacrificing their integrity for profit is as old as capitalism itself; very few corporations manage to maintain a clean reputation for their entire lifespan. The reality is that no company has ever been born either good or evil and stayed that way forever. Rather, most companies get caught up in an endless cycle.

Since companies indeed go through cycles, it means that no company starts out inherently bad – not even the corporation you hate most in the world. In fact, corporations begin their life cycle in a first stage called the honest era.

The honest era (I) is a time of people over profit, when everybody wins.

Think of it this way: a newborn company is just like a baby – young, innocent and also quite weak. To survive its first years, the company can’t afford to play dirty; it has to convince its employees that the business is worth their efforts, and convince its consumers to give up their time and money.

The problem is that, as businesses grow, the pressure to stay competitive makes it harder to stick to honesty and quality. This is the efficient era (II).

After all, a business is only sustainable if it can stay ahead of its competitors, and that means being efficient. But problems arise when efficiency is no longer a means to an end, but the very goal being pursued.

Keeping your company steady during the efficient era is all well and good, but, as time goes by, it becomes all to tempting to drift over to the dark side. This is exactly what happens when a company enters the deceptive era (III).

This is typically when companies decide to relocate production to developing countries (turning to child labor if necessary), implement misleading advertising campaigns, employ deceptive tactics, offer exorbitant salaries to executives and so on.

Although such ruthless decisions may lead to financial successes, they are short-lived; consumers start to wisen up and become dissatisfied.

The apologetic era (IV) is about restoring what’s been lost or broken on the way to corporate success: confidence, faith, quality and accountability. To do so, a company needs to right its wrongs by replacing misguided leaders and improving from the inside out.

In 2010, Toyota issued an apologetic statement admitting to mistakes that left one of their models with a lethally dangerous braking problem. The choice to apologize naturally helps rebuild the image of an organization that cares (as it did for Toyota) and a company can gradually regain consumers’ and employees’ trust.

The good news is there’s a way to remain in the honest era. How? Well, the companies who do manage to stay honest share seven core beliefs.

First off, people count (1). As obvious as it may seem, companies are made of people; these people are valuable and deserve to be treated with respect. To remain in the honest era, companies must treat three kinds of stakeholders right.

It starts with team members (a). When employee morale falls, the organization is not far from collapsing along with it. But if employees identify with their company and proudly carry coffee mugs with their company logo, they probably feel like they count!

Next is customers (b). Customers need to feel special and valued; their complaints should be taken seriously and addressed with care and compassion.

Finally, vendors (c), though often overlooked, are also of critical importance. They’re the face of your company and should be treated accordingly.

The second core belief is that truth matters (2). Nearly every piece of modern-day advertising features weasel words, hollow taglines that aren’t quite lies, but are still far from the truth. Though they think they’re being clever, it’s these businesses whose luck will eventually run out. Companies that refuse to meddle with the truth are the ones that will earn themselves a loyal customer base.

Becoming more transparent (3). Sure, transparency can be tough, but you’ll be doing yourself a favor! Why? Because transparency is an act of liberation. Opting for full transparency is freeing. You can reinvest the time you’d otherwise spend concocting schemes and hiding secrets into optimizing your business. And consumers also are set free; they can engage with the company without speculating about its honesty, or lack thereof.

Be authentic (4). Nothing looks more fake than a company trying too hard to be real. Rather, authenticity means practicing what you preach. Take Baileys, which has been authentically Irish since its launch in 1974. Its “Irishness” is at the core of its success, as the company has always fought the urge to relocate its production. Baileys is manufactured in Ireland, and ensures only well-bred Irish dairy cows are involved in their production process.

Running a business often seems like the opposite of generosity (5). But profit-hungry business strategies just won’t cut it for customers today. Generosity is a top priority, as the modern consumer doesn’t want to just buy a brand; they want to buy into the brand’s values, too. Take the shoe brand TOMS. They were pioneers in the one-for-one model, where every pair of shoes purchased leads to an additional pair for a child in need.

Commitment to high quality (6). If you can achieve this, you’ll have a competitive edge, because quality speaks for itself. When you make high-quality products, it’s clear that your company values its customers. And quality also builds credibility.

A well-designed website, the packaging of products or the choice of paper for a business card may all seem trivial, but each one contributes to the image that customers have of an organization. Customers are likely to think to themselves, “If they care that much about such details, I can trust that they’ll care about me as a client.”

Principle that honest companies stick to is facing fears (7). Fear takes different shapes and forms: it can appear as the fear of change, when you’re convinced that the policies and procedures that have brought success should never be modified, or it can manifest itself as a reluctance to admit faults. Don’t let fear fool you. Making amends is critical to moving forward.

Start by acknowledging that the most powerful people are customers – and this means you are powerful. To break the cycle of good companies becoming bad, we have to learn to behave as consumers.

Capitalism is not merely a story of good and evil – it’s much more complex, with companies that start out with pure intentions becoming corrupted along the way. This pattern, however, can be avoided by learning from past mistakes and developing a fresh new economic model where people, not profits, are of greatest importance.

To provide quality, you need ears to hear, so create a culture of evaluation and feedback. In the end, quality is not what you say it is, but what your clients say it is. You should listen, respond and make changes quickly. Use your social media platforms effectively and make sure your clients are pleased!

Source: blinkist.com