3 Brilliant Business Lessons From Obama’s State Of The Union Address

By David Mizne

No matter your political affiliation (and I will not be endorsing any particular party or politician in this post), you have to admit that the president gave a great speech on Tuesday night.

What really piqued my interest were several key points about the state of American Business today, and trends that will continue in the coming years. Below I will share 3 lessons that we can learn from the observations he shared.


Of course those take-aways mattered little for the next day fact-checkers, who bashed many of the president’s claims. Can we excuse Mr. Obama for providing statistics and facts that were questionable? After all, 100% honesty and candor is not something we come to expect from our elected officials.

He probably had several goals in mind for the speech, other than sharing hard data: In an election year, it helps to make voters feel good about the incumbent party. This was also one of his last opportunities to establish his legacy. Most importantly, Obama’s rhetoric was meant to inspire Americans to become politically active, less fearful, and more productive in life and at work.

Business Lessons for the New Economy

1) Communicate with Your Employees

What the president said about the state of business in this country during his SOTU was part of an overarching ideal. He clearly believes in listening to employees in order to empower them to do their best work:

In this new economy, workers, startups and small businesses need more of a voice and not less. The rules should work for them.

This comes as no surprise, since in 2015 the White House addressed a growing problem in business by making employee engagement a priority. Priority goals across federal agencies included one on “People and Culture”. Encouraging innovation was meant to unlock the full potential of the workforce, and create a culture of excellence and engagement:

Specifically, we will focus on employee engagement (measured by employee views about their leaders, supervisors, and work experience), as multiple evaluations have demonstrated a strong correlation between employee engagement and an organization’s productivity.

Mangers that listen and respond to the challenges their employees face can learn a tremendous amount about their businesses, including the best ways to make them more successful.

2) American Quality and Pride

Obama also alluded to companies having less loyalty to their communities, which creates more uncertainty for employees. Companies in a global economy can relocate anywhere to respond to tough competition. Sure public companies have a responsibility to stay profitable, but what happened to patriotism and caring about the people in the towns and cities where products used to be manufactured?

Many companies leave this country to be closer to their overseas customers or to avoid paying high taxes. Some do this via a technique called an inversion. A large American company purchases a smaller foreign one. That smaller company then becomes the headquarters on paper, and the company is taxed according to the rules of the foreign country.

Legislation is continuously being written to discourage such behaviors, and businesses will have to abide by those laws and also crunch numbers to see what is most profitable. Some companies are returning home to America, not necessarily out of a sense of patriotism and community, but because it’s good for business.

This Inc. article  demonstrates 6 examples of companies who decided to “reshore” for a variety of business reasons including improvements in domestic innovation and efficiency.  Peerless Industries for example, returned to America due to rising Chinese labor costs. Intertech Plastics reshored because their potential customers demanded US suppliers.

The “Made in the USA” label is a patriotic gesture that influences some consumers, and it is also a symbol of quality compared with cheap Chinese goods. The chairman of Buck (the knife manufacturer) famously explained why those four little words prompted their reshoring: “Hunters are rednecks, and they don’t like anything with that C word on it”.

3) Put People First 

The final and most powerful business lesson involves reforming our system to put stakeholders before shareholders:

This year I plan to lift up the many businesses who’ve figured out that doing right by their workers or their customers or communities ends up being good for their shareholders, and I want to spread those best practices across America.

Last year, Marc Benioff (Salesforce) joined the ranks of thought leaders Peter Drucker and John Mackey (Whole Foods), when he decried the business theory that optimizes for shareholder value. Benioff said that, “the business of business isn’t just about creating profits for shareholders — it’s also about improving the state of the world and driving stakeholder value.”

Indeed shareholder primacy is a dark path, one that puts employees, customers, and citizens at risk. That ideology tends to be socially irresponsible, in terms of damage to the environment and creating wealth inequality.

Shareholder primacy is also bad for business in the long-term. When people are taken care of, they are motivated to do a better job. They are more innovative and are willing to stay at a company longer. In the age of yelp, when customer service can make or break a company, any manager will tell you that happy employees make for happy customers.

The movement to re-humanize the workplace has often been featured on this blog. Companies can become more profitable by leading employees, not by taking advantage of them. While the bottom line is the lens through which most businesses view their day to day, it seems like some of our leaders are finally helping to refocus that vision on a far greater prize – making the world a better place.

Image Credit: Donkey Hotey


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