Previously in this column, my brother and partner, Etsko Schuitema, has argued that mature leadership is based on the principle of giving and that the legitimacy of power in the workplace is dependent upon the care and growth of the subordinate.

A relationship built on where the one is trying to “get” something from the other, sows distrust and discontent. On the other hand, a leader that is seen to be there to make a contribution will cultivate contributory behaviour among subordinates. By its very nature, the argument creates a paradox. Why does a relationship in the workplace exist in the first place? It obviously exists because the company exists. The ultimate question must therefore be: why does the company exist? If the standard answer is simply the profit motive, then one is arguing for value-driven behaviour within a needs- or self-interest driven context. The paradox becomes intolerable, even if the argument is couched in “enlightened self-interest” terms.

If all of this sounds familiar to you, it is because the debate around value-driven business versus profit-driven business has been with us for 200 years. Indeed, current company transformation and the unprecedented power of financial markets have crystallised the economic debate into two fundamental camps: shareholder value versus socio-economic value. Experienced analysts will tell you that the two are not in conflict. Strategic thinking today is based on short-term profitability for longer-term wealth creation. The latter is not possible if a company is in conflict with business ethics and social norms.

But if the argument for a value-driven relationship between company leadership and their subordinates, and the company and society as a whole, wants to be on solid ground, it has to be taken out of the mushy neo-liberal, pipe-puffing, sandal-wearing philosophical context, into the hard world of business reality. Having a socially musical statement of purpose or mission is one thing. Facing some key strategic decisions to meet shareholder expectations is another.

It is my intention, therefore, to argue in this and hopefully in future articles that a benevolent leadership relationship is synonymous with a benevolent business model, which is turn is synonymous with sound business sense. A “benevolent” intent in business is not in conflict with prudence, profitability, productivity, and operational excellence. Indeed they are mutually supporting.

The first prerequisite is to get the terminology understood. “Benevolence” does not mean “soft”. “Care and Growth” has two elements: the kind and the tough. Allowing people to get away with their self-destructive whims is not care at all, and growth is intolerant of consistent mediocrity. The other bit of ideological drivel that we have to challenge is that being market driven is the same as being profit driven. A bank robber is clearly highly profit-driven. But he is breaking every market rule in the book.

Similarly, the argument that “capitalism” is synonymous with “free markets” and socialism is synonymous with “command economics” is as useful as the ruins of the Berlin wall. The power of Global capital that can in one touch of a computer button, make irrelevant all the laudable goals of national government policy, is challenging modern capitalism, and the profit motive behind it at its very core.

What does “being market driven” really mean? Clearly it must mean that I am, or our company is driven by the needs of our customers. By definition, therefore, being market driven means being driven by the needs or interest of others. This is in total harmony with a benevolent intent. The concern we should have is the ambiguity we have created around the term. In my thirty years of active economics journalism, and subsequently in a decade of consulting, I have witnessed mission and vision statements change from the blatant “maximisation of shareholder returns” to “we are here to serve our customers.”

The experience we all appear to have is that at least some decades ago, companies were honest. Today they say one thing and do the other. Test this by asking a colleague or friend three questions about their company: What do you do? How do you do it? Why do you do it? You will find great clarity around the first two. The third will most probably solicit the response: “for money”. Occasionally some expensive consultant driven “bos-beraad” experience aimed at “creating” mission, vision, strategy, a SWOT analysis and goals, will impose itself on base instinct and lead to the reply: “to serve our customers.”

One can only despair at an economic environment that is ambivalent about is very existential foundation! Ironically, this foundation itself confirms that economics has a value-driven base. Supply and demand are the core principals and no amount of ideological brainwashing can avoid the simple fact that supply exists to serve demand. It is not the other way around. In an environment of free choice and free moving negotiable prices, the whole pattern of natural economic laws is set up to affirm value-driven behaviour. Its perversion will lead, and has for many led to downfall.

Being value-driven in business has a direct, causal link to longer-term wealth creation. By being useful to others, a company confirms its right to exist. This means that, in the words of William Kellogg, a “company exists to add value to people’s lives.”

The concept of “adding-value” is a hard-hitting, very old, and highly effective business principle. In accounting terms, adding value is the same as creating wealth. It has three components:

1. Transforming (by changing in the most efficient and effective way possible, one given state into another, more useful state);

2. Measuring (is the new state of higher value than the first, and can this be measured by market based rulers or instruments?);

3. Intention (did the action have as its core purpose the adding of value to my customers or buyers?).

I have dealt only with the last in this article. In future articles, I will demonstrate how the others can be used and how the Value-added approach to all aspects of business virtually guarantees growth and success. I have witnessed time and again, the experience of others where faced with a choice between their immediate self-interest or profit motive, and the interest of their customers, they haven’t seriously rued the day that they took the first option.

As a final thought on the link between value-driven business behaviour and true entrepreneurship, the following quotes are useful:

“I will build a car for the great multitude.” Henry Ford.

“I will make the computer accessible to the masses.” Bill Gates.

“I will protect the consumer against exploitation.” Raymond Ackerman.

“I will stay in prison until my people are free.” Nelson Mandela.

Who were they thinking of when they made these pronouncements: themselves or others?

Their sincerity is not the point. They had to at least behave that way to be successful.