Financial Ratios - Outdated to measure SUCCESS

ROI, ROCE, EPS, PE, EBIDTA  all these words have assumed so much importance in business world that what it takes to achieve is completely ignored. Cost of achieving better and better these figures is so huge that it consumes humanity , environment , ethics and every other things. 

Capitalist society we are in has attached extreme importance to the figures/ratios stated above. All our business actions are only measured on these parameters.  There is no measurement of corrupt practices indulged , environment polluted , stress generated among people working for the organisation , customers fooled , under-served and even cheated to achieve these ratios. 

Single minded focus on financial ratios is killing the ethical and human factors in business. Growth at all cost is doing harm to the society and benefits handful of shareholders. We are talking about sustainable business practices  keeping environment in focus however what about sustainability of ethical norms human sustainability ?  

We have seen in the movie Guru , one company takes on the Govt rules by breaking and indulging in unethical practices. Who has authorised them?  What if every company start doing that? Just for personal gain ethical standards have been broken and justified for business & share holders wealth creation. We live by quoting that as an illustrious example. It is nothing but collapse of value system and unethical conduct for personal gain of a few. 

Just focus on financial success is the cause of all these nonsense prevailing in business world these days. There are a few companies like Zappos.com which make DELIVERING HAPPINESS as their business mission and not only financial ratios. We need more and more of such companies and rest assured in times to come these are the kind of companies which will be valued more than just financial ratio focused companies. Non manipulative and socially sustainable measures will be in demand, 

Any one of the Indian companies dare to do things differently ? 

Capitalist Trap we are all in !!

During last week I had two conversations about the PEOPLE in organisations.

One of the new recruits of public sector bank told me that before joining public sector bank he was with the largest private sector bank.  On my asking why did he left  ? he responded  - It was highly stressed organisation. From Peon to CEO all are living in high stress.

Work culture in Public sector is relaxed in  a way. They employ more people , less efficient and these are less ROCE enterprises.

Same day I had an occasion to meet someone very senior in public sector general insurance company. Officer told me – yes we want to make change and want to make organisation customer centric but you know we are public sector company and people mindset is a major issue.

Job is mostly secured, union support, high employment ratio, pay scale is relatively less but work culture is also relaxed,  mostly corruption on higher scale, listed but suffers low PE.

Private sector companies less job security, high pay scale, high work related stress, low employment ratio so higher work pressure , corruption , hmm, well little less,  listed entities so huge performance pressure.

Companies in both sectors are competing with each other.

Inefficiency, low ROCE vs highly efficient and high ROCE , low pressure vs high pressure, high employment vs lean employment.

Which one is better ?

Do we want more efficiency , better ROCE and therefore high stress and pain or we want more employment, less stress &  therefore  more happiness ?

What do we really need ? In the name of privatization and capitalism,  humanity is lost somewhere.

My vote is for the man who switched to public sector job leaving highly paid private sector job.  People in public sector can be trained for efficiency  , attitude and customer centricity  but we cant train and convince capitalist for lesser ROCE for better happiness at large.

For sustainability of humanity private sector MUST learn and take some clue from public sector.

What do you think? Are we in a big trap of a few capitalists ?