Lawrence Nicholson | Nation-building beyond profit

Much to the chagrin of many, scamming, crass behaviour, extortion of businesses, political cronyism, nepotism, and undiluted skulduggery seem to have become the acceptable mainstream paths for many, in doing business in Jamaica.

Jamaica seems to be at the point where actions and modes of behaviour that fall in the aforementioned areas do not elicit as much of a ‘shock effect’ as used to be the case as recently as 20 years ago, even to the point where one now runs the risk of being shunned, and even considered ‘out of touch with reality’, if one dares to raise objection to activities and/or modes of behaviour once considered by most to be an anathema of a progressive and civil society.

In fact, Jamaica seems to be at the point where we have become so desensitised and devoid of a moral compass that news such as extortion of businesses by criminal elements and professionals siphoning off people’s money for their personal use have now been reduced from nine-day talk to less than 24 hours.

An ‘it’s the norm, so let’s just move on’ attitude has taken hold. But all is not lost! There is the strong belief that there is a remnant, representing a critical mass, which does not embrace the referenced modes of behaviour.

Family-owned businesses, FOBs, must be part of this remnant and, with raised hands, be ready to take the initiative to bell the cat. The time is ripe for FOBs to lead the way in the restoral and realignment of Jamaica in achieving the goal of building a robust and caring nation.

Why FOBs

Compared to non-family businesses, most FOBs have the distinction of having more control over the principal-agent dynamics of businesses.

Developed in the 1970s by Michael Jensen of Harvard Business School and William Meckling of the University of Rochester, the principal-agent theory refers to the relationship between an asset owner or principal and the agent or person contracted to manage that asset on the principal’s behalf. This means that a separation of control occurs when a principal hires an agent to manage the affairs of the business.

In Jamaica, most FOBs do not suffer from such separation of control. In short, the principals are the alpha and omega of the affairs of their businesses. This reality, combined with other characteristics that have contributed to the revenue generated from their operation being equivalent to approximately 32 per cent of the GDP of Jamaica, FOBs seem to be in pole position to either initiate or to be a critical component in belling the cat in any quest to realign a Jamaican society that seems to be on life support in critical areas.

As a group, FOBs have the economic leverage, and many of them have the moral authority, to help in rescuing Jamaica from the brink of moral and social decay.

Businesses should not exist for the sole purpose of making profit. That is, to make profit without any concern about the social, spiritual and other aspects of the country in which they operate.

A striving democracy is dependent on the involvement of the business sector. Jamaica needs businesses on which one can rely to see and treat people as people, and not as objects to be exploited to achieve abnormal profits, without any concern about the ‘broken walls of Jerusalem’; businesses that operate by a code of ethics that is consistent with the moral code of a nation that has a prayer embedded in its national anthem; businesses that stay above the fray of party politics, especially the dark side; and businesses that invest in developing human capital, socially and otherwise.

While I don’t agree with all the elements of views expressed by Milton Friedman, he seemed to have had a grasp of this reality of balancing the business making profit and retaining a social conscience, as expressed in his famous essay, written about half a century ago.

“In a free society … there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud,” Friedman wrote.

In short, in the process of making profit, FOBs in Jamaica must, inter alia, stay above the maddening crowd of fraud, criminal activities, modes of crass and uncouth behaviour, and the dark side of party politics.

The echo of the question is deafening: What is wrong with politics? Nothing inherently wrong with politics, and businesses should be encouraged to be part of the political process as part of a robust and striving democracy. However, in taking their place in the political process, all effort should be expended to ensure that such involvement is as apolitical as is humanly possible, especially in a country where so many persons are blessed with an above-average ability to link everything to party politics.

Businesses, especially FOBs, should not be tainted by the dark side of politics, which, based on the not-too-distant past, has been linked with violence, modes of crass and uncouth behaviour, and the undermining of people’s self-worth.

Many in the society need places of refuge. FOBs have the capacity to step to the front and be part of these places of refuge. This is therefore a courtesy call on FOBs in Jamaica, asking them to draw on the elements of familiness that, for many, have formed the foundation of their sustained success – integrity, love of family, respect for others, treating others as you would want to be treated, putting the needs of people above profit. It’s a call for FOBs to remain active in holding up the economic pillars of Jamaica; to continue to have a positive impact on the social tapestry of the communities in which they operate.

Practical ways

There are many practical ways of belling the cat. Here are some starting points for FOBs in leading the way in helping Jamaica to achieve its stated 2030 vision as ‘the place of choice to live, work, raise families and do business’:

Elevate customer service to form one of your strategic pillars, and not just as an afterthought. Show people that they are important, and that you appreciate and place value on the time and money spend in your businesses.

Be deliberate and intentional in engaging persons in the communities in which you operate your businesses. People tend to care for businesses that show care for them.

Have a line item in your budget for social interventions. Government cannot do all the interventions.

Debunk the ‘can any good thing come out a Nazareth’ approach in your employment practices. Many criminal elements have been fostered because of a feeling of ‘nobody believes in me’.

Pay workers based on your ability to pay, and in accordance with the labour law and the worth of their assigned jobs.

And form partnership with communities and other businesses to make early interventions; get ahead of the intervention of destructive elements. This can be by creating and funding a safe and non-judgemental space in communities to facilitate discussions, conflict resolution.

Jamaica is at an inflection point, one that demands strong leadership from the business sector. The data shows that part of this leadership resides among FOBs. This is a mere courtesy call, asking FOBs to look beyond the profit and engage the social tapestry in the building of a nation.

It might be the time to agree with Sir Michael Perry, chairman of Centrica PLC: “The brands that will be big in the future will be those that tap into the social changes that are taking place.” Join in helping to direct the social changes that will benefit Jamaica.

More anon!

_______

Lawrence Nicholson, PhD, is a senior lecturer at the Mona School of Business & Management, University of the West Indies, author of Understanding the Caribbean Enterprise: Insights from MSMEs and Family-Owned Businesses and a director of the RJRGLEANER Communications Group.

_______

lawrence.n.08@gmail.com