October 1, 2018
I’ve been pondering the difference between value and values more and more lately as I read about millennials pursuing purpose-driven entrepreneurial projects, which to me heralds an era of return to the value of doing good while working hard. It reminds me of my high school and college days when service clubs were popular and my early business days when young professionals joined Civitan, Kiwanis, Rotary and other service organizations to fill needs in their communities.
Then came this great article on “The Flywheel Philosophy” at Strategy-Business.com referencing a quote I love from Jack Welch, the legend-in-his-own-time CEO of General Electric who said the concept that maximizing shareholder value is the goal of business is “the dumbest idea in the world; shareholder value is a result, not a strategy.”
And then today I read that the Securities and Exchange Commission (SEC) has settled its lawsuit against Elon Musk by making him step down from his role as chairman of Tesla for three years and pay a $20 million fine for what the SEC determined to be a fraudulent forward-looking tweet.
This is where value and values diverge. The SEC also allowed Musk to remain in his position as CEO of Tesla, the luxury electric car company he founded. What does that say about the values of the man running the company? Does he care about anything but the bottom line? What does it say to shareholders and stakeholders and his 22 million Twitter followers.
As a party to the settlement, the company Musk will still run agrees to a $20 million penalty for his mistakes, add two outside directors to Tesla’s board … and do a better job of watching over what Musk says to investors.
He’s still minding the store.