Creating Value the Number 1 Purpose of a Company (181 of the Largest US Companies)

For the last few years Customer Value Foundation (www.CustomerValueFoundation.com) and Creating Value Alliance (www.creatingvalue.co) have been spearheading a campaign that the role of a company and an executive is to create value for customers, employees, partners, society and investors on a long-term basis.

It is gratifying that on 19th August, 2019, 181 CEO members of Business Roundtable, including Amazon’s Jeff Bezos; American Airlines’ Doug Parker; Apple’s Tim Cook; Bank of America’s Brian Moynihan; Coca-Cola’s James Quincey; Eaton’s Craig Arnold; Marriott’s Arne Sorenson; Lockheed Martin’s Marillyn Hewson; Morgan Stanley’s James Gorman; Procter & Gamble’s David Taylor; UPS’s David Abney; and Walmart’s Doug McMillon re-wrote the purpose of a company after the previous one written in 1997.

On top was Delivering Value for Customers (Customer Value), and to all stakeholders.

Delivering value to our customers: We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

Investing in our employees: This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity, and respect.

Dealing fairly and ethically with our suppliers: We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

Supporting the communities in which we work: We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

Generating long-term value for shareholders: [They] provide the capital that allows companies to invest, grow, and innovate. We are committed to transparency and effective engagement with shareholders.

Each of our stake­holders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities, and our country.

We have built up a large membership of people from around the world, who believe this to be true. This includes Philip Kotler, Russ Klein, CEO of American Marketing Association, Jag Sheth of Emory, Christian Gronroos of Hanken, Finland, V. Kumar, Editor of Journal of Marketing, Tanya Dubash, Godrej, R. Mukundan, Tatas, Harry Oosterhuis of Ing Bank etc.

The new purpose of a company that the Business Roundtable members have signed states delivery of value as the number one purpose of a corporation.

Our definition of Value (by our value community) is:

Value Creation Definition: Value Creation is executing pro-active, conscious, inspired or imaginative and even normal actions that increase the overall good and well-being, and the worth of ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders and society), and value waiting to happen.

That is why our parents teach us to be good kids and to do good. But this is soon overtaken by the goal of making a living, of being successful.

The prime role of an executive is to create value.

This gives us an opportunity to give CEOs a road map on how they can get their companies to move forward and transforming their companies for Customer Value. This is exactly what Philip Crosby was able to sell, when the quality movement started. This is all possible by tweaking our work process slightly. We have done this for many companies.

How can we get some CEOs together or individually and discuss Customer Value, Value Creation, Customer Strategy, Measuring Customer Value (no one else does, except us, and our associates), Customer Centric Circles, Employee Value, Societal Value and the futuristic Value Waiting to Happen, and getting the entire company to pitch in (Total Customer Value Management, also title of one of my books)?

 

Gautam Mahajan

9810060368

Gautam Mahajan is one of the world leaders on Customer Value and Value Creation. He is Founder Editor of the Journal of Creating Value, www.jcv.sagepub.com, now finishing 5 years, and the Mentor of the Creating Value Alliance, creatingvalue.co, and Chair or co-chair the Global Conferences on Creating Value, the next being in Paris in June 2020, and The International Conference on Creating Value for the Future of AI and Society at Kobe Japan in October, 2019, and a conference in Boston at Northeastern on How businesses create or destroy value for society in March 2020.

A Creating Value Centre for Business and Society will be inaugurated in Denmark in February 2020. University of Kobe is starting a Value School to be inaugurated in April 2020.

A list of his books are here. Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant Logic

Do join the Creating Value Alliance, creatingvalue.co

Explore posts in the same categories: Business & Management

4 Comments on “Creating Value the Number 1 Purpose of a Company (181 of the Largest US Companies)”


  1. I missed the conference in NYC

    Was interested to see the note

    We think there are significant gaps in this picture,

    Maybe we should catch up and share our perspective which is built on over 20 years of action research?

    Kind Regards

    Philip Cormie


  2. Hello Gautam,

    I hope you are well?

    I wish I could get as excited as you about these major corporations declaring that value creation for their stakeholders is their number one goal, but I can’t.

    It’s just the next round of nauseating bullsh## on their part, to mislead the public.

    The concept of Stakeholder Theory, as proposed by Edward Freeman, has been with us for over 30 years, yet it hasn’t made a jot of difference.

    Talk is cheap – they can say whatever they want and I won’t believe them. The only thing that will convert this hot air into belief is when they invest their money in changing our business measurement standard as that’s what dictates outcomes. As long as there is no change on this front – there is no meaningful change. Only when our business measures support a universally comparable measurement standard, based on the principles of creating value for all stakeholders, will we achieve a truly balanced economy. Until then it’s all cheap talk and a waste of time.

    The inescapable truth is that the financial bias of our business measurement standard lies at the heart of our most serious social, environmental, economic and business problems. Until we address this head-on, we will not make any progress, despite the optimism of well-intentioned people like you.

    Kind regards,
    Adrian Dore.


  3. Highly appreciate the well focused write-up. Thank you for your email Gautam. Keep up the good work that you have been doing

    Warm regards

    George Vergese


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