All businesses struggle with finding good employees, operating efficiently, and turning a profit. But Bank of America Chair and Chief Executive Officer Brian Moynihan firmly believes a successful business must go beyond those basics to do right by a broad range of stakeholders including society at large.
He calls it the “genius of the AND,” a concept first articulated by business writer Jim Collins in the 1990s in his book “Good to Great.” Instead of facing the “Tyranny of the OR,” as in a binary choice between profits or purpose, or growth or environment stewardship, Moynihan says. “The idea is you need to deliver both. When you try to do one thing or the other, it’s not as good as if you do both.”
Elaborating on the idea in a recent interview, Moynihan champions the concept of “responsible growth,” which translates into a set of operating principles that addresses the needs of customers, employees, shareholders, and the broader society without making debilitating tradeoffs. As he puts it in his frequent pronouncements on the subject, the four principles of responsible growth are “Win in the market, no excuses;” “Grow with a customer-focused strategy;” “Grow with the right risk principles;” and “Grow in a responsible manner.”
“The ‘genius of the AND’ is we’ve both got to create money and do it the right way,” he said. “You’ve got to make money and serve those constituencies. Responsible growth is how we talk about it.”
Winning in the Marketplace, Meeting Client Needs
Bank of America has excelled at the first concept of winning in the marketplace. Through 2022, BofA achieved eight consecutive years of at least $15 billion in net income. Few other companies have been so successful so consistently.
Then, too, growing with a customer focus means constantly upgrading services to meet client needs. BofA in 2022 added three million active digital banking users, saw 11.6 billion digital logins, and grew digital sales 22%, representing nearly 50% of overall consumer sales.
Creating an Environment that Attracts Employees
Creating a good working environment for teammates is another part of responsible growth. In 2022, BofA increased its U.S. minimum hourly wage to $22 on the way to $25 an hour by 2025. That translates into full-time employees making at least $46,000 with benefits including health care, tuition reimbursement, a new sabbatical program for long-term employees, and increased childcare benefits. At a time when many companies struggle to find good workers, BofA added 10,000 new employees last year.
Achieving Results at Scale Through Capitalism
Lest anyone think that Moynihan advocates a vaguely socialist viewpoint, he offers a ringing endorsement of capitalism.
“Capitalism is the only system that can solve the problems that the world needs,” he said in the interview. “If you think about the tasks the world needs to accomplish, whether it’s the environmental transition done right, whether it’s opportunity for people to get the American dream, whether it’s initiatives like the supply change maintenance that avoids issues of child labor, capitalism is the only thing that can solve these things because it’s a system that perpetuates itself ” through profits.
He continues, “Charity is wonderful, but it doesn’t provide enough money.” Government efforts, too, are often stymied by budget deficits and ideological shifts. Only companies around the world, if aligned to focus on the necessary changes, can produce profits to achieve results at scale.
As Moynihan said in his annual letter to shareholders, “If we want to be successful at what society wants, we should all cheer capitalism on.”