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Dan’s Biz Bookshelf: A One-Legged Stool—How Shareholder Primacy Has Broken Business

Thank you, Ed Chambliss, for writing this new book. It is long overdue. I think I loved it so much because I agree with the whole idea, including the premise that the shareholders’ economics philosophy expounded by Milton Friedman so many decades ago is basically the root of most of what is wrong with our companies and our economy today.

If you recall, Friedman believed the shareholders of any company are the most important leg of that proverbial three-legged stool. The only purpose of a company is to make money for the shareholders, no matter what that takes. This means:

• Keeping wages as low as possible
• Cutting corners on quality and consistency
• The ends justify the means (think Volkswagen emissions scandal)
• Millions of dollars into the pockets of our politicians to change the laws in the interests of companies’ shareholders (think health insurance companies, big pharma, and polluting energy companies)
• Electing candidates who expound trickle down economy BS that has led to the biggest wage gaps in the history of our industry
• Putting our very economy in the hands of $5,000-suited, cocaine-sniffing egomaniacs who, no matter what they do, are considered “too big to fail”

If you agree, then you are going to like this book. If you don’t agree, then you’d better find religion before you die because things are going to get very hot for you. Okay now that I got that off my chest let’s read what Mr. Chambliss has to say.

“Making shareholders value your prime objective in business is inherently discriminatory. It disproportionately benefits those who are arguably the most well off, while decimating the middle class.”

By the way, in the end you have a one-legged stool, and we all know how well that works.  Chambliss argues that we need to bring the stakeholders to the party, or in this case the stool as well. That’s means employees and customers must be considered for a well-balanced company, and more importantly, a well-balanced economy,

I have to admit that I read this book three times because it so pushed my buttons. Maybe it’s the right book at the right time but it sure indicates and explains some of the problems we are having in my industry when it comes to labor shortages and the decimation of the American electronics industry over the past 25 years as our customers—the large OEMs—for the sake of profits for the shareholders took our technology and literally hand carried it to China. The Chinese did not sneak over here in the middle of the night. Nope. We all watched as our largest companies brought it over there for the exclusive fattening of their shareholders.

But there is hope. Chambliss lays out a succinct six-step plan for business leaders to start improving this situation:

1. Make your choice.
2. Figure out who your friends ae going to be.
3. Assemble the components of satisfaction.
4. Determine how much satisfaction will cost.
5. Show everyone you mean it.
6. Tell everyone about it.

This is just a teaser. You’re going to have to read the book to discover what each of these steps entails. The hardest thing about reviewing this book is not being able to cite every point that the author makes. If I had done that, this review would have been longer than his book.

Once again, Mr. Chambliss, thank you for writing this book. And for the rest of you who have wondered what the heck has been happening to our economy and what we can do about it, you owe it to yourself and to your country to read it.

Dan Beaulieu is president of D.B. Management Group.

A One-Legged Stool: How Shareholder Primacy Has Broken Business (And What We Can Do About It)
Author: Ed Chambliss
Copyright: 2022 by Best Friends Brands, LLC
Pages: 270
Price: Paperback Format: $12.95/ eBook Format: $8.99