Monthly Memos

Wake-up Call In The Corporate Monastery

Charles I. Mundale
Executive Director of MCCR

November 1993

Social problems in our metropolitan area are increasing at an alarming rate. Families are in disarray across the entire socio-economic spectrum. Middle-class people of all ethnic groups are fleeing to the suburbs or thinking about doing so, leaving our core cities with increasing poverty, deteriorating housing, rising crime and shrinking pride.

Racial and gender prejudices and religious differences stoke the fires of hate and distrust. Interaction is reduced to a choice among denial, wary avoidance, brooding silence, and violent encounter. In short, we are learning to distrust and dislike each other; we are losing respect for our institutions and confidence in our ability to make any significant difference.

The behavior and attitudes associated with these menacing trends inflict huge costs on American business, costs that come back in many guises to take a bite out of profits: as taxes to cover the costs of law enforcement and education to be sure, but also as training programs to compensate for employees' inadequate preparation, as shoplifting and employee theft, as private security measures, as fraud, broken contracts, and lawsuits.

Such costs -- plus those of low morale and rising medical premiums -- inevitably weaken the competitive position of every business in our community.

Meanwhile, we have witnessed the growth of a kind of corporate monasticism. Our business leaders -- pressured by Wall Street's bias for immediate gratification and the hazards of global competition -- seem to have decided that salvation can best be achieved by ever-more intense devotion to The Company. This strategy is clearly at odds with the stakeholder view of business on which MCCR was founded. Basic to that view is the conviction that there can be no long-term profitability for any company whose home town has become a social cancer ward. It is time for Twin Cities business leaders to heed the noise in the streets -- the wake-up call of our declining social health -- and once again invest their time and talents in the problems burgeoning outside their corporate walls.

Concurring Opinions

"We decry that our cities aren't working anymore. The reason is that CEOs aren't working anymore. ...I hope [MCCR] can convince business leaders to get back into the trenches. Otherwise, I'm not very optimistic for the future of our city."

From Jack McHugh of Minnesota Valley Bancshares

"Our cities, schools, government and social service agencies need Minnesota's talented business leadership to once again emerge and become personally involved in the understanding and solving of the major community problems we all face."

From Richard Schoenke of Firstar Corporation in the October Executive Summary

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