Friday, 5 September 2008

The Buddhas of Business

Years ago, a client descried us as the Buddhas of business. It was the nicest compliment we could possibly receive for, all around the world, Buddhists are making their mark on business. Geshe Michael Roach, an American living in Tibet as a fully ordained Buddhist monk was sent by his teacher into the world of commerce. He had no experience of anything other than silent retreats and his monastery before landing in New York facing the nigh impossible task of entering the closed world of the diamond industry.

One partner, a $50,00 dollar loan and six years later he had a company with an annual turnover in excess of $100m - and he never worked on Wednesdays.

Paget Sayers was a wealthy import-export businessman, until he retired a few decades ago. Now , aged 78, he is on a mission to ensure that every child in Cambodia has his or her water bottle, and it is filled with a clean, healthy potable drink
.
He was prompted to start the fresh water programme when he discovered there was arsenic in the local wells while on a pilgrimage to visit local Buddhist temples. He has been a practising Buddhist for 30 years. He also heads up an education program for the villagers, too.

So how do these Buddhists combine spiritual development with business success?.
For Michael Roach it stemmed from his principles and from doing less. However hectic his week became, he protected his on Wednesdays and did nothing. No emails, no reading – quite literally nothing and from that stillness came much of the clarity and many of the ideas for expanding the business.

For Paget Sayers it revolves around the cornerstone of Buddhism - being satisfied with life; being happy. A miserable business never succeeds for long and when the fun leaves the company so too will the profits.

The other trick is not to be attached to the money. Michael Roach gave away all his wealth before returning to the monastery. Paget Sayers – like Warren Buffet and Bill Gates- is still in the process of giving much of his away.

So try the experiment for three months, smile more, detach from the madness and give more away. What have you got to lose? Besides everything…

Enlightened Stakeholder Value

Fenway has been dedicated to the business of business enlightenment for over twenty years so it was nice to see the 2006 Companies Act charge directors with securing ‘enlightened stakeholder value’. Unfortunately, this has changed little in the world of business.

In terms of fiduciary duty, it seems the board need only minute that has considered more than just the shareholders during its deliberations.

In terms of performance, it had had no impact at all. No director can please all of its stakeholders all of the time. There is an intrinsic conflict of interest when shareholders, customers, employees and suppliers all want more for less. Indeed, Michael Jensen at Harvard argued seven years ago that it is ‘logically impossible to maximize in more than one dimension’. Purposeful behaviour, he argues, ‘requires a single, valued, objective function’ and suggests that the ‘maximization of the long run value of the firm as the criterion for making the requisite trade-offs among its stakeholders.

Unfortunately, the City does not think in relation to ‘the long-run’’ and is quite happy to give Terry Leahy, the head of Tesco, a hard time despite unparallel maximisation of long-term value over the last decade.

For Fenway, business enlightenment is less about the score and more about the way you play the game. True prosperity stems from passion, vision, commitment and values not the size of the bank account. Lousy teams can play a lousy game and still fluke a 1 – 0 win but a temporary victory cannot hide a lack of talent, foresight, energy, love or strategy.

So, despite the new legislation, organisations will continue to shed jobs, cut corners and squeeze suppliers. Directors will comply with the Companies Act via a little paperwork but
while ever greed is the prominent factor within the business, some stakeholders will see little value or enlightenment from anyone steering their ship.

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