After completing your MBA and acquiring experience in management in different companies, you decide to start your own business that is environmentally friendly and working towards creating positive social impact.
During the first 6-months, you focus on developing a value proposal (any product or service of your choice) synthesizing it into a Business Plan. After this period the operations of your company formally start. The next 3-years you work very hard and you put all your time and energy toward growing your business and you are successful. You take pride in what you have built, almost single-handedly. Your choices to take the high road in terms of the environment have sometimes worked against you, but you feel good about the work your company does, feeling that you are “doing well while doing good.”
However, during your 4th year, you become frustrated. You’re experiencing difficulties in winning bigger contracts because you just cannot compete with larger companies and this is hurting your company, your employees, and your reach. In order to increase your competitiveness and to guarantee your long-term sustainability, you decide to involve other organizations and individuals to gain financial support. Obviously, this means turning over the sole control that you have had in your company. Your investors become shareholders of your company with 75% of the shares, and they appoint you as CEO with the expectation of obtaining a level of profitability higher than 15% per year. If the company does not reach this figure, your shareholders will replace you (keeping you out of the general management of the company you started) and this will endanger its continuity. While your shareholders have come aboard fully agreeing with the company’s mission and vision, you are aware that some feel profitability is most important and that you may be asked to sacrifice ideals for money at some point. This is something you have not had to do prior to taking on shareholders.
As CEO of the company, your first order of business is outlining a strategic plan for the next 5-years. The approach that you need to take, to keep shareholders happy, is one that maximizes profitability. However, you firmly believe that your company should be environmentally friendly as well and promote a positive social impact. This other approach will create additional costs that put at risk the profitability required by the shareholders. How would you/could you proactively manage this dilemma?