I recently read this quote attributed to President Trump:
Here, everything, pretty much everything you do in government involves heart, whereas in business most things don’t involve heart. In fact, in business you’re actually better off without it.
My take: No, no, no! This is wrong-minded, and very outdated thinking. To succeed, businesses must make emotional connections with customers, employees, and partners. The idea that success comes from being heartless promotes the debunked view that companies exist only to create value for shareholders. Here’s one of the points that I make in Modernized Leadership, which is an update to leadership theory:
Management focus has been driven by economists like Milton Friedman who argued that corporate officials have one core responsibility: making as much money as possible for their shareholders. But the value that a company creates comes from a combination of resources contributed by different constituencies (not just investors) who’s returns should also be maximized, especially employees who contribute their knowledge and skills.
POTUS is free to view his businesses as heartless entities that exist to increase his net worth. But I am hopeful that other leaders and emerging leaders don’t follow his lead. Even Jack Welch has rebutted the blind focus on shareholder value:
On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… Your main constituencies are your employees, your customers and your products.
If you’re a leader, than I hope that you focus on engaging the hearts and minds of your employees, customers, and partners. Creating value for an entire eco-system is more sustainable and rewarding than counting your profits.
The bottom line: Businesses need even more heart.