A couple of weeks after that bullshit CEO pledge about how “profits don’t matter as much to us anymore,” we now have a new study about how 1,000 CEOs are looking at climate change. Before we get into this, let’s just assume — because that’s always healthy and wise — that executives will say they care about climate change, but have a lot of reasons why they can’t act on it, i.e. pursuit of The Almighty Dollar and short-term gain. That would be where I would think the chasm/gap is going to be.
And, lo and behold, here’s what we have. One quote:
An amazing 88% of the CEOs “believe our global economic systems need to refocus on equitable growth.” Concerns about inequality have moved from “Occupy” protests a decade ago to the mainstream, and leaders see it as destabilizing. As one CEO said, “Unleashed capitalism has created extreme poverty, terrible social conditions and a difficult situation for our planet. If we cannot manage a better social transition of the wealth, we will be in trouble.”
Sustainability creates business value in multiple ways — there is a real tension between short-term profit and long-term value. And in fact, more than half of the CEOs say “they face a key trade-off in the pressure to operate under extreme cost-consciousness while seeking to invest in longer-term strategic objectives.”
Right. And here we go again.
Not all leaders are money-hungry
But the sheer reality is, many are. If you run a for-profit business, I mean at the top rungs of a for-profit business, the very process of getting there means that you value money above almost everything else. It’s like people who want to be President of a country. They value power, relevance, and prestige above almost everything else. Who the hell would want to be on planes and in meetings all week and have to respond to every horrible thing that happens, and be followed by security 24 hours a day? Normal human beings do not want these things. You need to want power, money, etc. to even get to these levels. That’s definitely true in enterprise. Do you think your brain and your way of looking at the world is the same way that Jeff Bezos looks at the world when his feet hit the floor in the morning?
So look, a lot of these guys — still mostly guys, yes — have a profit-oriented mindset, which tends to be a short-term mindset. This has always been a challenge of business. We talk about 10-year plans, but a 10-minute plan often gets in the way. Some of this is what we call “Shiny Object Syndrome,” and some of it is called “Inter-Temporal Discounting,” which means you value the immediate over stuff way in the future. Plus, for better or worse most executives are trained on extreme cost-cutting strategies. Know what the biggest expense of a business tends to be? People. I just explained (a) layoffs and (b) the rapid pace of automation in one paragraph. Nominate me for an award.
A profit-oriented mindset isn’t bad, per se
If the place can keep the lights on, you’ll get paid.
It’s the core of capitalism in many ways.
And if your job is to drive revenue and profit, well, go do your job and focus on that. Right?
But as that happens…
… unless you find very self-aware senior leaders, or very moralistic and environment-conscious leaders, you will never see much change in “sustainability initiatives” or “climate options” or “reduction in shareholder value.”
These guys know a few core ways to run their shops. It’s been the same for three-four decades. Look at what happened with digital, social, and mobile. Most companies still barely have a functional mobile website. This stuff came along, scaled fast, and executives used to the trade show circuit and glad-handing smile and dial moves had no idea what to do.
Here’s the core issue: Let’s say an executive does focus on climate, but his input costs go up. Well, now 10 companies in the space not focusing on climate will be beating him. Investors and shareholders are now pissed. His whole shop is about go up in flames unless he abandons the climate-conscious idea. Would he rather lose his business, which is probably his greatest personal source of relevance, or would he rather create a better Earth for great-grandchildren he will never meet face-to-face?
I’m guessing the former. Plus: daddy needs a new backyard pool for summer 2020. Bonus time, baby.
Double talk is normative
Corporate vocabulary means absolutely nothing. The earlier in your career that you realize that, the better off you will be. Just do your thing as best you can and try not to get in too much trouble for calling things as they are. (That’s been my issue, broadly. I also probably have some anger issues and some other stuff, but I’m working through it right now.)
If you want to understand a white-collar, for-profit business … you need to do two things, basically.
- Follow the money
- Follow the relevance
Projects that will make the guys at the top (a) richer or (b) feel better about their 15-hour workdays and lack of any true emotional connection will always be the stuff that wins out in these companies. Climate change? Kick it to #HRCathy. She’ll put together a deck.
We want to believe these companies will change when Zs and Millennials take over, and hopefully they will — but my concern would be, Zs and Millennials will have kids too, and want backyard pools, and want virtue-signaling homes, and want nice vacations — as airline fuel prices rise — and they need to make money to have all that. So when they’re holding the reins, are we really going to be less profit-conscious? I wouldn’t think so. It’s easy to be into saving the world before you have two kids, a mortgage, and a mom with a neurological disease, all of whom need money to keep functioning.