The mid-to-late 1970s an economist by the name of Milton Friedman, offered an entirely new definition, purpose of business. He said, the purpose of business is to maximize profit within the bounds of the law. That’s a very low standard. Like, what about ethics, right? But this new definition of business, which was simply to maximize profit, believe it or not, that wasn’t the definition of the responsibility business prior, right? It was more Adam Smith which is to produce great product and great product is how we, you know, Take care of the consumer and that’s what makes us Thrive and all of that stuff and it shifted the the the focus of business in words and a lot of Executives embraced it and you started to see that Neil Tony and embracement of really start to gain momentum in the 80s and was full-fledged the 90s and 2000. So it has nothing to do with Republican or Democrat. We saw it Fly and we saw policy change to embrace that definition. So for example, there was no such thing as using Mass On a regular basis to manage the numbers, there was no such thing as mass layoffs, to balance the books. Prior to the early 1980s, it did not exist. It was used as a last resort when the company was really losing money. Right? Did not exist. That’s number one. Number two, the whole idea of rank and yank, that Jack Welch popularized where you rank the entire company. Based solely on performance to promote the top, 10% and fire. The bottom 10% every single year with no assessment is to, are they Each other in the others High performers, bad for the culture stabbing each other, the back for their individual performance and of the low performance struggling with other kinds of issues. Maybe they’re under stress, maybe it’s market conditions. Who knows? Didn’t matter? You get ranked you get fired, you get promoted, guess what? That did to the culture, everybody would stabbing each other, right? The imbalance of shareholder Supremacy, taking care of our shareholders was always a thing that’s not an issue but it wasn’t considered more important than the customer or the employee. We now live in a world with a shareholder is now considered more important.
Employee and you hear, bankers and CEOs, talk. They’re talking nonsense when they talk about their fiduciary duty, right? It’s completely made up and that all was popularized by Jack Welch. He was the poster child for all of these new ways of running business that are now completely standardized. One of my favorite stories is actually from Gary Ridge to the CEO, he just retired CEO of WD-40, which is a public company, and he was on his analysts call and has an I said Gary, you missed your numbers and Gary said no, I missed your numbers. My numbers are just fine.
