Surprise! This is actually a post about corporate generosity which is not a simple topic. The existential question is whether you can be generous to everyone: suppliers, customers, staff, senior leadership, owners, the planet…the list is a long one and I think it’s impossible to be generous to all of those groups. The tradeoffs are difficult and complicated.
In my opinion, companies have over-vectored toward being generous to two groups: senior leaders (who can earn a shockingly large amount of money) and owners. Whilst most of us are not in the senior leader group, almost all of us are in the ower group. Penions – whether state, union, company, or personal – are invested in companies. It is 100% in the interests of anyone who has a pension to see that pension grow, and that means that almost everyone has a vested interest in seeing companies err on the side of generosity to owners. This generosity comes at a cost, examples include: poor customer service (how long have you hung on the phone during a recent call to a customer service call centre?) low wages and poor working conditions for many employees, and agreements that are disadvantageous to suppliers, if they can get away with it.
Whilst I could wax lyrical on this theme for many more paragraphs, the actual point of this post is to point out something wonderful. Monmouth Coffee has stopped giving away disposable cups. Customers’ options are to have a coffee in (drinking out of a china cup) or buying one of their reusable cups and, well, using and reusing it. There is no doubt this decision carries risks:
- Revenue loss: Some would-be customers will walk to the closest alternative to get coffee out of a disposable cup (and in London there are always many, within a few steps) rather than buying a reusable cup. I have seen this happen.
- Margin reduction: The company needs to employ more people at the busy times to wash dishes. More people means more complexity and that means more risk and higher costs throughout the entire system.
- Higher one off costs/capital tied up in assets: The decision required the business to invest in china cups and saucers, as well as reusable cups, which have now become non liquid assets in which capital is tied up.
This may have been a simple option to consider but it could not have been an easy decision because it is one that comes with risks and because the implementation of it is complex. It is a decision that prioritises the health of the planet over the wealth of the owners. It may or may not engender customer loyaly in the long term, and it is likely to reduce the returns to the owners at least in the short term. To that, it is an incredibly generous decision on the part of the owners and one, I would like to say, I appreciate and respect. Thank you.