Book

In my book, I write about the need to move beyond profit as the basic measure of success and the driver of economic development. I recently came across a statement that convinces me even more.

“In order for a business to perform a societal value it must make a profit.”

Unquestionably this appears to make sense; after all, isn’t it business profit that has underpinned the rise of the western economies and secured our aspirational standards of living?

Yet, I would be tempted to argue that the statement is actually disengenuous and misleading. Why? Because it inverts fundamental principles. Business exists to provide a service and it only makes profits when those services deliver, or are perceived to deliver, value.  No value, no profit!

This is a very important distinction, because it is the quest for greater profits that subverted the finance industry and led to the near-collapse of the financial system and the current economic climate in which we all find ourselves. With more emphasis on value and less on profit, this whole sorry situation might have been avoided. It is hardly surprising that there is now an outcry and mass indignation and anger about the greed of the banking fraternity.

However, the bankers are not alone in this. You don’t have to look too far to find parallels in other walks of life, not least in sports, where the best way to beat the competiton is increasingly seen to be to take performance enhancing substances. Of course this is unethical behaviour and – if you think about it – the ultimate in self-deception. Yet it is vindicated by the delusional statement that “the only person may be hurting is myself”, and justified by position “that everyone else is doing it and I won’t be successful unless I do too!”

The problem is it doesn’t just harm the individual, it hurts everyone; it creates a contagion that breaks down the fundamental trust that makes participation worthwhile and that is necessary for a society to function. The failure of the big banks is a salutary lesson as to just how pervasive these attitudes have become and the damage that such moral decay can cause. We need to make a stand. That is why it is necessary to challenge conventional ‘wisdom’ and re-examine the fundamentals behind statements that profits are essential for business to create societal value. Rather now is the time for values based business!

Book Review If you are concerned with how society is changing then you should read this book. It contains some interesting insights into how society via government is being moulded, whether intentionally or not.

Bay lists some of the problem he sees with the way governments are governing and global challenges such as the current global recession. You may or may not agree with what he has written, however, it will make you think. Bay also provides solutions to the problems that he highlights.

This is a book that you may need to read twice to get the full benefit. I know I will be reading this again in twelve months time. I found this to be an interesting and worthwhile read.

Les Rees, Principle of Les Rees Ltd. Les is a Chartered Accountant specialising in S.M.E’s and start-ups, he has had nearly 20 years experience in assisting business owners to improve both their bottom line and lifestyle. His website is www.lesrees.co.nz

It’s a bit of a cliché to talk about the rapid pace of change, but we have certainly seen it lately. When I wrote “A Feeling of Worth” there was nothing (at least in my experience) to suggest there would be a crisis over MP’s expenses. Yet in the past few weeks we have seen an investigation into MP’s expense claims result in daily exposés that, amongst other things, have:

• Forced a significant number to recognise that they have killed the goose that laid the golden egg and so stand down at the next election.
• Resulted in many others being investigated by their own – suddenly scrupulous – party, with the threat that they might no longer be considered “worthy.”
• Raised a very real possibility that a number will face criminal charges for excesses that actually amounted to fraud or embezzlement.

Yet, by far the biggest consequence is the sudden clamour for major political reform. There are government ministers now suddenly advocating proportional representation, something they never considered before there was a possibility that they might lose the next election. And David Cameron is suddenly calling for “sweeping reform” with power “redistributed from the political elite to the man and woman in the street.”

These comments should be enough to raise the alarm bells for any thinking person. How on earth do we get from what – apart from the obvious fraudulent cases of a minority of MPs – is simply a massive (and unethical) abuse of an incredibly weak, inadequately controlled, expense/allowance system, to wholesale constitutional reform and changing the whole way of governing? News reports today are talking about the ‘mob-rule’ mentality that is being galvanised, and there is no doubt that the electorate is entitled to feel disillusioned, but mob rule does not provide a good basis for balance or hence for constructive, effective change.

While it is massively encouraging to have some of the ideas in my book so suddenly and publicly endorsed, I am concerned about the motives for such radical changes, and even more by the haste with which they have been aired. Unless they have been on a hidden agenda for a long time and now is suddenly seen as an ideal time to test them out, they cannot have been properly thought through. And a hastily conceived solution and/or a rushed implementation of a solution may well create a worse problem than the one being remedied.

So, let’s just fix the MPs expense system and then have some proper debate about structural change, rather than have this sort of partisan point-scoring which is something the book condemns anyway.

You can buy my new book A Feeling Of Worth here: