In
case you missed Sam Sewell’s article, DOING WELL BY DOING GOOD, in the World
Mensa Bulletin, you can read it on pg 24 (the centerfold!) in the February
issue of American Mensa Bulletin: IN THE PEOPLE BUSINESS; Professional Altruism
Pays.
LMK
when your bulletin arrives—feel free to share it with your entrepreneurial
contacts. Eager for feedback!
Sam
Sewell
Life
Member
239/591-4565
Word count 961, not including
title and attribution. Properly accredited publication is authorized to
other editors.
For
interviews or guest appearance requests, call Sam at 239/591-4565
Doing Well by Doing Good:
Marketing and Management Science in the 21st Century
The business community
in America has, at best, a tenuous grasp on the indisputable principle that
honorable conduct is a prerequisite for abundant profit! Benjamin Franklin
understood the benefits of enlightened and ethical business practices when he
advised, “Do well by doing
good.”
Throughout the history
of capitalism many entrepreneurs have prospered through application of this
principle. A selected review of early industrialists makes the point that these entrepreneurs were driven
by their own personal philosophy; that doing “good” for their
people means that their business will also do “well.”
But it wasn’t until the
1960s that modern management science began to teach students that they can
create stable wealth by doing “good” for their employees, their
customers, and their communities. Finally, a fundamental truth that guides
the creation of sustainable wealth was available to business students.
Today there is excellent
data, both qualitative and quantitative, showing that a company’s successful
relationship with people as well as ethical business practices is positively
related to its financial performance.
Four scholars, from
divergent fields, deserve the credit for developing the established principles
that produce optimal wealth. Let’s take a brief look at these pioneers.
Maslow,
Drucker, McGregor, and Nash is not a law firm. MDMN
is an acronym created to serve as a reference point for this discussion on
modern marketing and management science.
Abraham
Maslow, through his books and teachings, brought us the psychology of
business. The father of modern management, in his book, Maslow on Management,
states that “The good society is one in which virtue pays.” In an ideal
society prosperity is the natural consequence of “doing good.”
Peter
Drucker’s primary academic career was spent at Sarah Lawrence College. He
also published 39 books on management which were translated into 30 languages.
In 1995 Peter Drucker stated, “I became an immediate convert: Maslow’s
evidence is overwhelming. But to date, very few people have paid much
attention. He (Maslow) wrote Eupsychian
Management to bring McGregor and me down
to earth." Here
in the 21st century it remains true that very few people are aware
of the contribution of MDMN.
Douglas
McGregor, PhD in psychology from Harvard University, was a management
professor at the MIT Sloan School of Management, where he created and developed
the ' X' and 'Y' theories of human motivation and
management. These theories describe two contrasting models, coming from
two opposing sets of general assumptions about workforce motivation. Theory
X stresses the importance of strict supervision, external rewards, and
penalties. It’s all about control by management. In contrast, Theory Y
has a profoundly more profitable influence in the motivating role of job satisfaction, by encouraging
workers to approach tasks without direct supervision.
McGregor’s book, The
Human Side of Enterprise (1960) had a significant influence on the
relationship between management and employees. He pointed out that “The
ingenuity of the average worker is sufficient to outwit any system of controls
devised by management.” Like all natural systems, human behavior cannot be
controlled; however it can be managed. McGregor went on to say that “Any
attempt by management to enforce behavior that is contrary to human nature is
preordained to fail. Conversely, management methods that compliment human
nature are sure to provide wealth and well being for all concerned.”
John
Nash, in the hit movie A Beautiful Mind, is at a bar with three
other friends when he begins to develop a theory of what is now called Nash
Equalibria, the idea that won him the Nobel Prize and the respect of his
colleagues and loved ones, despite his schizophrenia.
At the bar, he and his
three friends begin to compete for the beautiful blonde in a group of five
women. “If we all go for the
blonde” Nash says, “we
block each other; not a single one of us is going to get her…and we insult the
other girls. But, what if no one goes for the blonde? We don’t get in each
others’ way, and we don’t insult the other girls. It’s the only way to win….the
best result comes from everyone in the room doing what’s best for himself and
for the group.”
The two most important
conclusions gleaned from John Nash’s equations are;
1. More profit is created
through cooperation than through competition.
2. Nice guys finish first.
For more background we
suggest becoming familiar with the works of Peter Drucker and Abraham Maslow,
as well as Douglas McGregor, and find out why John Nash won the Nobel Prize for
Economics in 1994.
One can hardly complete
a business course on the college level without being introduced to the
difference between the “X” and “Y” theories of management, as well as Maslow’s
needs hierarchy. These classes however do not provide adequate familiarization
with modern management science, nor do they really explain Maslow in
relationship to management.
Most courses fail to
convey adequately the idea that profits are maximized when respect for the “human side of enterprise” is obvious. Maybe an additional
problem is that students of business do the same thing with their subjects that
I did with Algebra. I did whatever math was necessary to graduate, and have
never worked another algebra problem for the rest of my life.
While the MDMN
ideas are slow to catch on, a small group of today’s upper echelon management
professionals strive to find creative applications for these principles.
Because of intellectual competition and academic hubris, the contributions of MDMN
are rarely available in a single source, no matter what college you attend.
Best Self USA management curriculum includes the contributions of MDMN
in its marketing and management training program for individuals and
organizations.
I hope this helps remind
business people of their college days, and encourages them to use proven profit
enhancement principles based on “good guys finish first.”
