A One-Legged Stool: A book review by Bob Morris

A One-Legged Stool: How Shareholder Primacy Has Broken Business (And What We Can Do About it)
Ed Chambliss
Best Friends Brand, LLC (March 2022)

Useful insights and suggestions that help to get priorities in proper alignment

The metaphors are obvious: Stool/Organization and  Legs/Means of Support. A stool needs at least three legs. For present purposes, let’s assume that they are investors, customers, and employees.

I think the stool has relevance but is of limited value to Chambliss’ purposes: To explain how to re-establish what he views as the proper balance of the diverse priorities of a company’s investors, customers, and employees as well as other citizens of the planet.

As he explains, his book “examines the entire dynamic of shareholder primacy, starting with something most of us have personally experienced: mistrust of business. Following those feelings to their source, it diagnoses who (or what) is to blame for our current situation, including some questionable assumptions that underpin today’s system of private enterprise.”

Companies have lengthened the investor “leg” at the expense of the other two.

Chambliss suggests that these basic realities of free enterprise be kept in mind:

o “Employees are empowered to choose which careers they want to pursue.
o Consumers are empowered to choose which products work best for them.
o Investors are empowered to choose who they support with their money.
o Citizens are empowered to choose what kind of a community they want to live in.”

I offer two others:

o Some companies have the structure of a stool, others a bench or bookshelf, and still others a ladder. Sometimes they begin as a small box and then are restructured to accommodate changes in what they do and how they do it as well as where they are operational.

o Shape is one consideration, size is another. Forget about downsizing or upsizing and think in terms of RIGHTSIZING. Years ago, I owned and led a company that added two new clients with substantial billings. Rather than add lots of people, I added only a few and paid the others more.

o Shareholder primacy does not necessarily “break” business but it can cause several avoidable problems. For example, shareholder primary can compromise appropriate analytics and thereby undercut profit margins.

In my opinion, the greatest value of this book is to be found in the later chapters when Chambliss shares his thoughts about HOW effective use of the best strategies and tactics now available to employees and customers can help increase their influence, to strengthen their perceived value as a “leg.”

One final point: What Ed Chambliss refers to as “today’s system of private enterprise” varies in nature and extent from one country to the next and even from one company to the next. Whoever controls the priorities can derive the greatest benefit. So-called “free enterprise” is a misnomer. The same is true of his term, “harmony of humanity.”

My suggestion is to control your priorities or someone else will. Meanwhile, keep your options open or someone else will reduce or eliminate them. If you don’t care what happens to you, why should anyone else?




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