Please note that I helped edit this piece and gave my feedback, and that I have left my red team points in the previous longer paper. Also note that I’m building a Guiding Company, so I’m biased.
“But even if Guiding Companies engage in activities that consumers take issue with regarding traditional firms, such as competitive (i.e., princely) compensation for CEOs, it is not clear why this would cause a consumer to choose a company that enriches shareholder over a company that helps fight global poverty.”
I think consumers would actually oppose high CEO pay and other activities they deem immoral from Guiding Companies. There’s many examples from NGO’s that got berated for activities that would be normal for traditional companies, like high CEO pay, and I’m not convinced it would be different for guiding companies.
Furthermore, we agree that consumers would choose a company that donates profits to charities over a traditional company when all things are equal, but I suspect that situation is hard to create and will take a long time. Consumers, investors and philanthropists are still wary of this idea, so (for now) it’s harder to attract the capital needed to acquire or build guiding companies that can compete with investor backed companies. And if you get to the no-brainer level, you still need to be able to market it to the public effectively. There seems to me to be no obvious reason why this wouldn’t work, but creating this movement, persuading stakeholders and building these companies will require a lot of time, money and talent and should not be underestimated. But the size of the opportunity is potentially all the profits in the world, so it’s definitely worth exploring.
The question isn’t whether consumers would oppose high CEO pay of a Guiding Company/Producer, but rather whether they would choose that company over a normal company that serves normal shareholders and also has high executive pay. If you’re a consumer and you’re choosing a normal company’s product over a Guiding Company’s product due to high executive pay, you’re cutting off your nose to spite your face, because you are enriching shareholders instead of charities.
It may even be they Guiding Companies can compete better for executive talent because of the social cache of leading an organization that generates $100 million/year for effective charities. Sure, normal fortune 500 companies can offer 10 figure yearly compensation, but a major Guiding Company could not only pay well (perhaps not quite as exorbitantly) but also grant one tremendous social status and the psychological benefits of being able to do lots of good through your job.
The benefits from actors across the economic arena—consumers, employees, consultants, advertisers, vendors- will allow for enormous advantages for Guiding Companies over regular companies. It just takes enough people to realize that the power of Guided Consumption.
Guided Consumption just needs (as was noted in the previous post by Tomer_Goloboy) to hit a social tipping point. Because right now, there’s a strong status quo bias that is not fully appreciating the structural advantages that Guiding Companies will have.
I completely agree that it makes no rational sense for people to choose traditional companies over guided companies with all things being equal. But I’ve been in marketing long enough to know that people are highly irrational and emotional, and charities evoke a whole host of strong emotions. It will be really interesting to see how the public responds to guiding companies, but I know it won’t be rational. The CEO of Newman’s Own apparently made 270K USD each year, this question on quora about the CEO’s pay is also interesting. Most people tend to think that 270K USD isn’t too much.
With new talent (millennials) caring much more about the sustainability and ethicality of their jobs, guiding companies might have better teams, and better teams, provided there is enough money, built the best companies. I’m very excited about this aspect and from anecdotal evidence from my company, this is true. We have a lot of applications on our jobs and the main reason they apply is because of our guiding company business model.
Please note that I helped edit this piece and gave my feedback, and that I have left my red team points in the previous longer paper. Also note that I’m building a Guiding Company, so I’m biased.
“But even if Guiding Companies engage in activities that consumers take issue with regarding traditional firms, such as competitive (i.e., princely) compensation for CEOs, it is not clear why this would cause a consumer to choose a company that enriches shareholder over a company that helps fight global poverty.”
I think consumers would actually oppose high CEO pay and other activities they deem immoral from Guiding Companies. There’s many examples from NGO’s that got berated for activities that would be normal for traditional companies, like high CEO pay, and I’m not convinced it would be different for guiding companies.
Furthermore, we agree that consumers would choose a company that donates profits to charities over a traditional company when all things are equal, but I suspect that situation is hard to create and will take a long time. Consumers, investors and philanthropists are still wary of this idea, so (for now) it’s harder to attract the capital needed to acquire or build guiding companies that can compete with investor backed companies. And if you get to the no-brainer level, you still need to be able to market it to the public effectively. There seems to me to be no obvious reason why this wouldn’t work, but creating this movement, persuading stakeholders and building these companies will require a lot of time, money and talent and should not be underestimated. But the size of the opportunity is potentially all the profits in the world, so it’s definitely worth exploring.
The question isn’t whether consumers would oppose high CEO pay of a Guiding Company/Producer, but rather whether they would choose that company over a normal company that serves normal shareholders and also has high executive pay. If you’re a consumer and you’re choosing a normal company’s product over a Guiding Company’s product due to high executive pay, you’re cutting off your nose to spite your face, because you are enriching shareholders instead of charities.
It may even be they Guiding Companies can compete better for executive talent because of the social cache of leading an organization that generates $100 million/year for effective charities. Sure, normal fortune 500 companies can offer 10 figure yearly compensation, but a major Guiding Company could not only pay well (perhaps not quite as exorbitantly) but also grant one tremendous social status and the psychological benefits of being able to do lots of good through your job.
The benefits from actors across the economic arena—consumers, employees, consultants, advertisers, vendors- will allow for enormous advantages for Guiding Companies over regular companies. It just takes enough people to realize that the power of Guided Consumption.
Guided Consumption just needs (as was noted in the previous post by Tomer_Goloboy) to hit a social tipping point. Because right now, there’s a strong status quo bias that is not fully appreciating the structural advantages that Guiding Companies will have.
I completely agree that it makes no rational sense for people to choose traditional companies over guided companies with all things being equal. But I’ve been in marketing long enough to know that people are highly irrational and emotional, and charities evoke a whole host of strong emotions. It will be really interesting to see how the public responds to guiding companies, but I know it won’t be rational. The CEO of Newman’s Own apparently made 270K USD each year, this question on quora about the CEO’s pay is also interesting. Most people tend to think that 270K USD isn’t too much.
With new talent (millennials) caring much more about the sustainability and ethicality of their jobs, guiding companies might have better teams, and better teams, provided there is enough money, built the best companies. I’m very excited about this aspect and from anecdotal evidence from my company, this is true. We have a lot of applications on our jobs and the main reason they apply is because of our guiding company business model.