December  2002

Vol. 4, No. 12

Six Sigma and More: 
David Schwinn has more to say about purpose

by David R. Schwinn

Last month's column seems to have gotten your attention:

'You are absolutely right!  Six Sigma is to quality what surgery is to healthcare. '
'A life without a larger purpose is a life where meaning is measured by a dollar sign rather than by personal satisfaction and the pleasure of helping others to grow. '
'The sole motivation of (the corporation) is pursuit of profit now regardless of the human cost. '
These remarks and others caused me to reexamine the corporation's fiscal responsibility to stockholders. I took a little harder look at The Divine Right of Capital: Dethroning the Corporate Aristocracy by Marjorie Kelly (San Francisco, Berrett-Koehler, 200l, pp. 52-54). The book calls stockholder primacy a myth:
'The myth (first articulated by the courts in the mid-1800's) found its most forceful articulation in the 1919 Michigan Supreme Court case of Dodge v. Ford Motor Co., which established that, A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed to that end.' ---To this day,' as George Washington University law professor Laurence Mitchell has written, Dodge v. Ford remains the leading case on corporate purpose.' '
But here's the rest of the story. According to Kelly, this case is common law and 'common law can be overturned in a heartbeat. State legislators could simply create stockholder statutes that, for example, give directors leeway to serve the interests of the employees and the community. '  So it sounds like stockholder primacy is fundamental, but it doesn't have to be that way.
Why can't corporations serve the economic interests of a broader constituency?  I believe, for example, that the most powerful mission a for-profit firm might be the creation of jobs. Another purpose might be to efficiently and effectively transform resources and create products and services customers want. Companies could develop and sustain the long-term viability of the communities in which they operate. Something must, in fact, drive profit. Maybe it could be service to constituents.
Organizations are, after all, social systems. Jamshid Gharajedaghi (Systems Thinking, Woburn, MA, Butterworth-Heinemann, 1999, pp. 56-59) suggests that social systems do much more than create wealth. Specifically, they engage in:

  • The generation and distribution of wealth, or the production of necessary goods and services and their distribution.
  • The generation and dissemination of truth, or information, knowledge, and understanding.
  • The creation and dissemination of beauty, the emotional aspect of being, the meaningfulness and excitement of what is done in and of itself.
  • Formation and institutionalization of values for the purpose of regulating and maintaining interpersonal relationships, cooperation, coalition, competition, and conflict. 
  • Development and duplication of power, the questions of legitimacy, authority, and responsibility or, in general, the notion of governance.

Social systems are made up of people who partner with other people to serve other people. Of course, it is more complex than that but maybe it's more simple than that, too. On our wall at home hangs a poster with a photo of babies from around the world. It reads:  'Hello babies. Welcome to Earth. It is hot in the summer and cold in the winter. It's round and wet and crowded. At the outside, you've got about a hundred years here. There's only one rule that I know of, babies: God damn it, you've got to be kind. ' (Kurt Vonnegut, Jr.)
Maybe it is just that simple and just that complex. Vonnegut, a humanist, certainly has got some serious support for his view:
Hurt not others with that which pains yourself. Buddhism
Do unto others as you would have them do unto you, for this is the law and the prophets. Christianity
Tzu-Kung asked:  Is there one principle upon which one's whole life may proceed? '  The Master replied, 'Is not Reciprocity such a principle? what you do not yourself desire, do not put before others. '  Confucianism
This is the sum of all true righteousness
Treat others, as thou wouldst thyself be treated.
Do nothing to thy neighbor, which hereafter
Thou wouldst not have they neighbor do to thee. Hinduism
What is hurtful to yourself do not to your fellow man. That is the whole of the Torah and the remainder is just commentary. Judaism
Do unto all men as you would wish to have done unto you; and reject for others what you would reject for yourselves. Islam
Sounds like kindness to me. So when we rethink the purpose of our Six Sigma efforts, maybe we should rethink the purpose of our organizations. The bottom line doesn't have to be the only line.

As always, please send me your reactions, comments, and questions. You can reach me at:

Copyright 2002 PQ Systems.

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