It just occurred to me that I hadn’t written a conclusion for my March 9, 1999, column, “What Is a Company’s Raison d’Etre? Part 1,” so I will do so now.
Starting with the conclusion, GLOBIS decided not to go public; it will be operated as a partnership-style company in which employees hold stock, and it will provide high-quality service over the long term and engage in the operations we choose. We only came to this conclusion after months of heated internal debate.
Whenever we lose track of where we are, we always come back to the GLOBIS vision, mission and management philosophy (the GLOBIS Way) to find the answer. And indeed, the answer is actually there.
Our goals certainly do not focus on corporate growth or bigger profits, and we do not seek to get rich quick. What we want to do is to provide an infrastructure of people, capital and knowledge that is necessary for a new Japanese society and to drive change and creativity in society. That is, we want to turn out a large number of outstanding business leaders through our school, we want to assist companies in their restructuring efforts through our corporate training, we want to deliver a new kind of knowledge to society through our publishing services and other communication, we want to create a new kind of industry through our venture capital firm, and we want to help place the right people in the right jobs as a management resource bank.
As a collective of entrepreneurial professionals, we intend to deliver new value to society, individuals and corporations. When we referred to the principles of the GLOBIS Way—1) Contribute to society through business, 2) Provide opportunities for self-fulfillment and 3) Realize an ideal corporate system—we were able to conclude that our best option was to not go public.
Thankfully, employees hold nearly 100% the stock in our company, so there is no pressure from stockholders. In addition, our business essentially does not require a large amount of investment, so we cannot be differentiated by the size of our investment costs. Consequently, there has been no need to go public with our stock to procure funding; this was another reason behind our decision.
If we were to go public with our stock, we could certainly gain considerable personal assets, become the object of envy, and look very good indeed from the outside. To be honest, however, I am not at all interested in any of this. Making money is not the be-all and end-all, so I have no hesitation. Regardless of the path you take to success, you can’t take assets with you to heaven. On the contrary, we think it is much more important to stick to our mission and principles and to realize our vision.
I always say this, but I think that if I am most happy when I’m:
(1) with friends who are fun to be around
(2) doing the work I like
(3) enhancing my abilities
(4) contributing to society
(5) and, as a result, forming personal assets
Warren Buffett commented that working for the purpose of making money is hollow, just like being married for the sake of money. I couldn’t agree more. What’s the point unless you are around good friends and every day is fun?
In my last column, I questioned whether market capitalization was an appropriate standard for measuring corporate value. Ironically, the market capitalization of the two companies I cited has decreased more than 90% from their peak.
Right now I do not think that the value of a company can be decided by market capitalization. It is not something that can be represented in the numbers related to sales, revenue, ROE, etc. I feel that the key factor is how much good you are doing for society. I am currently investing as a venture capitalist, but I definitely do not invest based only on the numbers. One of the scales I use is the amount of value I am creating for society and how this value can be connected to profit. If it is just a case of “let’s get rich,” only people interested in money will get together. And they will leave as soon as the money does.
We absolutely want to be a company that first and foremost contributes to society, upholding the highest possible vision and mission, and pursuing our ideals to the end. Society can surely do with at least one company with this simple honesty. Our market capitalization is certainly not high, but I would feel content even if just a few people acknowledge our value.
Starting now, I intend to engage head-on in creating the ideal corporate system that is stated in the GLOBIS Way.