Wednesday, May 7, 2014

Reorienting the Purpose of Business

Newel K. Whitney & Co. store, which played a major role in the United Firm

"While Latter-day Saints may not typically think of Joseph Smith as an energetic businessman or an assertive entrepreneur, multiple business interests captured his attention beginning shortly after the Church was organized."[1] Smith "operated his businesses under the principles of  consecration and stewardship and coordinated his enterprises through a business management company he named the United Firm."[2] I was reminded of this while watching competitive strategy expert and Harvard professor Michael E. Porter's TED talk "Why Business Can Be Good a Solving Social Problems." Porter recognizes the necessity of tapping into corporations' resources. He is convinced of the potential of businesses engaging social problems: the very social problems that are meant to be addressed by Mormonism and the Judeo-Christian tradition generally (e.g. poverty, inequality). "But in order to get this solution working," Porter says, "we have to now change how business sees itself, and this is thankfully underway. Businesses got trapped into the conventional wisdom that they shouldn't worry about social problems, that this was sort of something on the side, that somebody else was doing." 



The recognition that the earliest revelations on consecration in Mormonism revolved around a business organization (with a board of managers to boot) can and should have an impact on how Mormons think about and do business. Porter believes businesses need to adapt

shared value: addressing a social issue with a business model...Shared value is capitalism, but it's a higher kind of capitalism. It's a capitalism as it was ultimately meant to be, meeting important needs, not incrementally competing for trivial differences in product attributes and market share. Shared value is when we can create social value and economic value simultaneously. It's finding those opportunities that will unleash the greatest possibility we have to actually address these social problems because we can scale. We can address shared value at multiple levels.


Only by reorienting the purpose of our business, focusing on what Peter Drucker called "the meaningful Outside," can Porter's vision be fulfilled. And that vision can play a part in a different one; one that requires there to be "no poor among them" (Moses 7:18).


NOTES

1. Max H. Parkin, "Joseph Smith and the United Firm: The Growth and Decline of the Church's First Master Plan of Business and Finance, Ohio and Missouri, 1832-1834," BYU Studies 46:3 (2007): 5.

2. Ibid.

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