In 1970, Robert Townsend wrote a book called “Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits.” Despite having been written nearly 40 years ago, the book is generally acknowledged as one of the most influential business books of all time.
Townsend had gained recognition for helping transform Avis Rent-a-Car into a legitimate competitor to market leader Hertz. His efforts were embodied in the firm’s advertising slogan he championed: “we’re number 2, but we try harder.” In the book, Townsend told the story about how their advertising company could come up with nothing better to say about Avis to contrast it with Hertz.
The book is just like that throughout. I vividly remember reading it although I was quite young when I did so. It was filled with humorous and telling anecdotes that helped Townsend get his points across. When the book first came out, it was a breath of fresh air compared with the stuffy business books of the time.
There was something profound about Townsend’s approach that perhaps bears revisiting today. The title of the book says it all. To Townsend, the goal of managers was to build a successful organization that benefited everyone involved in it. Serving himself came second to that goal. As he wrote, “true leadership must be for the benefit of the followers, not the enrichment of the leaders. In combat, officers eat last.” Today, we refer to that kind of leadership as stewardship.
In one chapter titled “President’s salary (is he really worth $250,000?),” Townsend told the story of the time the board asked him to step out of the room so they could vote him a well-deserved raise. He refused to leave. He didn’t want his pay to become so much higher than the pay of his employees that they became resentful.
This true story almost seems quaint, as does the idea that a president of a major corporation would earn only $250,000. Contrast this statement in 1970 with Gordon Gekko’s statement that “greed is good” in the 1987 movie Wall Street.
Ah yes. The 1980s. The era of Reagan represented the return of an imperial presidency after Jimmy Carter’s efforts to bring humility to the office. Reagan celebrated wealth and championed the shift of money from everyone to the very rich under the philosophy of trickle-down economics.
In 1980, the average CEO earned 27 times the salary of his average employee. Townsend, in writing his book, was stating that such excessive salaries for top executives were demoralizing to other employees. Now, that multiplier is closer to 270. Bob Townsend must be rolling in his grave.
The irony is that Oliver Stone’s 1987 movie was intended to outrage people about the excesses Wall Street was displaying in the Reagan era. Instead, Gordon Gekko’s speech became a siren song to business school students hoping to make their millions on Wall Street too. Stone’s movie became part of the mythology of wealth worshipping, joining Robin Leach of Lifestyles of the Rich and Famous in selling the dream of becoming one of the one percent.
The problem is that, by definition, the one percent excludes 99 percent. Most people who achieve the 1% do it largely with the help of society and a good bit of luck. Society educated the members of the elite and protected them. And as is demonstrated by the fact that 90% of new businesses fail, the difference between success and failure is often purely being in the right place at the right time. Yes, members of the 1% are often talented, skilled and hard-working, but so are many equally talented people who never get the opportunity to join that cohort.
As an advertising campaign now points out, potential is widely distributed, but opportunity is not. The old saying that luck is when preparation meets opportunity ignores the fact that for most people, the opportunity never comes. It matters not how much preparation they engage in.
Our current president bathed in the cult of wealth. His ostentatious shows of wealth and his self-serving behaviors in office thrill his supporters who bask in the reflected glow of his prominent place in the elite. Where it was once the goal of candidates to emphasize their humble roots, now they worship in the church of privilege, emphasizing how much better they are than everyone else.
Former Democratic Congressman John Dingell recently tweeted how outraged he was that Jimmy Carter had to sell off his family peanut farm when he was elected President to avoid any potential conflicts of interest, while the current occupant of the White House engages in blatant self-dealing. Carter, though, occupied the White House in a different era, one before we worshipped the wealthy. That is certainly not the case today.
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