I strive to share my passion about the stewardship business leaders should feel to those who join their organization hoping to have meaningful careers with a company that cares about them. Our stewardship, however, extends beyond the people who walk through our doors each day. Our stewardship extends to all of our stakeholders. Embracing each group perceptively to create value for everyone brings about another awesome responsibility.
As leaders in business, we carry the awesome responsibility of embracing the design of our businesses.
Do you have a vision for the design of your business that is worthy of the trust of those in your care?
After the tumultuous years Barry-Wehmiller experienced in the mid-80s, we emerged determined to create a new vision for the design of the business. We envisioned a resilient business, one that would not be vulnerable to the forces that caused our distress. An integral part of our new design was the adoption of the Economic Value Added™ (EVA) methodology created by Stern Stewart & Co. for valuing company stock. Barry-Wehmiller is a privately held company with more than 400 shareholders, comprised of Chapman Family members, employees and outside investors.
The EVA method of calculation answers this question for shareholders: If I make an investment, will it generate value in alignment with normal equity risk? Treating those who provide the ongoing source of equity as respected partners safeguards the foundation of our economic existence, which is critically important to our higher purpose of creating sustainable value for all stakeholders.
EVA methodology is a powerful tool to articulate value creating business strategies. It allows all stakeholders to envision a future of value creation and leaders to make thoughtful decisions as their business evolves. Because EVA methodology clearly calculates the value of our stock based on known factors, leaders in the business can accurately predict the impact of various strategies on value creation. We focus on the business drivers that create long-term value, and every team member can understand why those drivers are important to our future success. Each team member can play a meaningful role in creating that future. EVA is an integral part of a business model that creates alignment, allowing all of our stakeholders to see a common path to a sustainable future.
In Conscious Capitalism, authors Raj Sisodia and John Mackey expressed a similar a view of stakeholder interdependence:
You cannot have a conscious business without conscious leadership. Conscious leaders are motivated primarily by service to the firm’s higher purpose and creating value for all stakeholders. They reject a zero-sum, trade-off-oriented view of business and look for creative, synergistic Win6 approaches that deliver multiple kinds of value simultaneously…leaders of conscious businesses have a finely developed systems intelligence that understands the relationships between all of the interdependent stakeholders.
Thanks in part to the EVA method, since 1988 we have grown equity value by over 15% compounded per year through a combination of more than 60 acquisitions and organic growth. In other words, we have achieved what we set out to do when we committed to a re-design of our business model: created a healthy combination of value for all stakeholders and an extremely bright future for our 7,000 team members.