How Business 101 was SO WRONG
Updated: Mar 11, 2019
I remember feeling shocked and dismayed. My vision of a noble and happy career ... shattered.
My first day of Business class at the University of Western Ontario – the classroom was non-threatening, I had already connected with some of my peers and was feeling pretty confident that I was in the right place. I was excited to have achieved the goal of starting a career in business at one of the most prominent business schools.
The characteristic lecture by the professor about what to expect in the program, what his expectations were of us … and then this question … “who thinks business is about making money?”. Most hands in the class went up. Sure. That makes sense.
Then came the punch.
What shattered me was the follow-up comment … “if you don’t think that the sole reason for a business to exist is to make money, you should probably just leave now”.
Wow – harsh. I remember feeling shocked and dismayed. My vision and optimism of a noble and happy career as a successful businesswoman – shattered. Not a big surprise that I did not do well in that particular class. I guess the reason this stuck with me all these years is because it felt so wrong, even then.
Admittedly, this happened decades ago, and certainly there have been giant strides forward in organizational thinking. But for many people, it remains an absolute truth that the ultimate goal of a company is to make money, and this is generally accomplished by creating a consumer need or stealing market share. That was part of Business 101.
It is obvious that organizations need to make money in order to survive. Luckily, many companies today have taken the path of having a different goal. They have decided that they have a responsibility beyond performance and shareholder value. They stand for something, want to make a contribution to the world and have a commitment to a much bigger purpose. They make the choice to manage the bottom line through innovation, connecting with, and pleasing consumers and creating a work environment where employees are engaged and inspired.
Interestingly, this combined with ethical business practices is what leads to long term business success. In fact, in his research, Steven Denning has shown that “when they operate this way, they make a lot more money than companies that focus directly on making money… Making money is the result, not the goal of their activities”. Denning (and many others) have demonstrated that companies that practice the philosophy of higher purpose, connecting with consumers and happy employees, enjoy much higher profitability and longevity than companies that rely on traditional management techniques.
One of the challenges in today’s organizations is that while many have adopted the newer techniques, it is managers themselves who have learned the traditional management techniques (like all my classmates in Business 101), and have not fully adopted, or even know how to adopt to the new regimen. We were taught this, and at some level of consciousness we think it to be right.
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 Steve Denning, Harvard Business Review