"Beyond Petroleum." –BP's corporate slogan.
"Clients first." –Goldman Sachs mantra.
"Our mission [is] giving people the power to share and making the world more open and connected." –Facebook CEO Mark Zuckerberg
"We aim to continue offering even better products for society. That is the core value we have kept closest to our hearts." –Toyota CEO Akio Toyoda
What's with all this corporate baloney? There once was a time when companies existed for one reason: To make money. They didn't have elaborate PR campaigns, image consultants, Twitter feeds, or damage-control experts.
But we expect more of our corporations today, so they oblige us with a lot of hokum meant to obscure the awful fact that they earn a profit, and sometimes a hefty profit. The pithy slogans, artful logos, and carefully calibrated philanthropic spending usually emphasize some feel-good venture that's unrelated to the core business. More often than not, we buy it, eager to believe that soulless institutions exist for the betterment of humanity.
CEOs aren't spendthrifts. They'd get fired if they were (and occasionally, they do). The reason that BP pays a lot of lip service (and a little actual money) to the cause of alternative energy is that it's good for business. Consumers are leaning away from fossil fuels and all the conflict associated with oil in particular. The more BP convinces consumers that it shares their sensibilities, the more business it will get from them.
But we're now seeing a rupture between the stated goals of corporations and their actual deeds, which comes at a moment when ordinary people are primed to distrust big institutions. The global financial meltdown, for one thing, was brought to us by a finance establishment that insists that its machinations lubricate the economy and make life better for everybody. But we've now learned that their alchemy enriches a few while endangering the rest. The government, meanwhile, is supposed to protect us from such exploiters. But too often, it abetted them.
BP has shown its stripes at an inauspicious time for profit-making machines trying to camouflage themselves as civic do-gooders. BP does, in fact, invest in non-petroleum energy sources like biofuels, wind, and solar. But total investments in alternative energy since 2006 have amounted to less than 5 percent of profits over that time, and BP's 2009 annual report devotes just one page to alternative energy. In emerging accounts of the huge and disturbing Gulf oil spill, it seems that BP executives may have subordinated safety and environmental concerns to the economic need to hurry a project that was behind schedule. Given its overwhelming emphasis on extracting oil at any price, a more accurate corporate slogan for BP might be, "Till the Last Drop of Petroleum."
But BP's not the only one. Goldman Sachs isn't primarily concerned about clients—it's primarily concerned about profits. To maximize profits, it needs to assuage clients who provide some of their earnings. But if Goldman made its money from turtle eggs, you wouldn't hear a word about clients; its slogan would be "tortoises first." Toyota cares deeply about products that improve society because that's how it became the most profitable car company in the world—not because it wants a better society. And when it started churning out products that seemed to harm society, Toyota paid a price. Facebook's mission isn't to empower people or make the world more open, it's to find a way to earn enough revenue from the personal information of users to boost its value and generate fat returns for investors whenever the company finally goes public.
[See what Washington needs to learn from Greece.]
Sounds terrible. But it isn't. There's not a thing wrong with companies earning money, even if they earn a lot of money. Healthy corporate profits drive up a company's dividends and the value of its stock, which helps investors build nest eggs and employees earn a living. If you believe in capitalism, then by definition you believe that companies should earn money. The problem occurs when companies claim to be something they're not and create expectations they can't possibly fulfill.
We can rightfully blame the companies themselves for this, but we should also finger naïve consumers and cynical politicians. As a rule, companies rarely put real money or effort into things they can't earn a profit on. When they do, the company loses money, shareholders revolt, the CEO gets fired, and a more ruthless team comes in to do a better job. We have other institutions—or should—whose primary responsibility is protecting consumers, safeguarding the environment, enforcing safety rules, and investing in future priorities that aren't profitable today.
Yet through ineptitude, neglect, or ideology, we've offloaded many of these responsibilities onto corporations, which means we get slogans instead of actions. Still, effective message control can convince consumers that hotels want you to reuse your towels because management cares about nature, that Steve Jobs cares more about delighting iPod users than about creating a communications monopoly, that Google has gone cold on China because free speech trumps all. Then politicians in the pocket of Corporate America use the slogans as evidence that it's in the interest of these companies to regulate themselves, and they're really doing a fine job of it, much more efficiently than the government would do it.
We have a trust crisis in America that's getting worse, not better. One reason is that companies say one thing but do another. Here's a corporate slogan that might start to fix that: "We make money. That's it."