The Good Entrepreneur Newsletter is written by Nick Kennedy and is an extension of his executive coaching program, where he shares lessons from over 10,000 hours of coaching leaders as well as his personal experience in founding, growing, and selling businesses.

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Over the past year, many large companies — Target, Ford, Coca-Cola, Amazon, Goldman Sachs — have walked back their stated commitments to diversity, equity, and inclusion. Some did it quietly, scrubbing language from SEC filings. Others did it loudly, announcing the dismantling of entire departments.

The media has been framing this as a values story.

I think it's a story about authenticity.

Here's what I keep noticing in my coaching practice: the leaders who are most rattled right now — the ones calling me anxious about optics and positioning and "which way the wind is blowing" — are almost never the ones who built their culture around a genuine North Star.

They're the ones who built it around metrics.

They measured toward DEI because investors cared. They measured toward ESG because it was fashionable. They posted the commitments because the PR team said it would help with recruiting.

And now they're removing them for the same reason.

That's not a reversal of values. That's evidence that there were never values to begin with. Only KPIs parading around in value’s clothing.

Jim Collins wrote about this in Built to Last — still one of the most rigorous studies of what separates enduring companies from also-rans. His test for whether something is a true core value is brutally simple: would you hold it even if it became a competitive disadvantage?

That's the question none of these companies seemed to ask.

Because the answer would have been no. And that no would have told them everything — that what they had wasn't a value. It was a position. And positions change like the weather.

This is the difference between ethics and morals. The word ethics derives from the Greek word ethos, which literally meant "a stall," or a hiding place. Morals derive from the word mores, which means "always changing." Unfortunately, in much of life today, we are guided by moral determinations. Or in corporate speak, positions.

Target is the sharpest case study. The company publicly committed to spending $2 billion with Black-owned businesses as part of its post-2020 inclusion strategy. In January 2025, under political pressure, it walked it back. The financial damage was immediate and sustained — roughly $12 billion in losses directly tied to the backlash, and a market cap that fell from $129 billion in 2021 to around $41 billion by late 2025.

The irony is that Target tried to reduce controversy by abandoning its position. Instead, it proved that it never had one, and both sides of the debate ponced.

Consumers who believed in the commitments left. And the critics who wanted them gone never rewarded the retreat. Abandoning stated values doesn't neutralize controversy — it simply shifts which constituencies are alienated.

You can shortcut the sequence. But you can't shortcut the result.

Most leadership teams want to jump straight to metrics. Revenue targets, growth percentages, and KPIs for every department. I keep pulling them back to the same question: what are you measuring toward?

You can't set a meaningful target without a destination. And the destination isn't a number — it's a statement of who you are and why you exist.

The companies that lose their soul don't do it on purpose. They do it one unexamined decision at a time. Each choice feels reasonable in isolation. But without a North Star to run it through, you accumulate a thousand small compromises that add up to a company — and a leader — you no longer recognize.

Define the purpose first. Not as a statement for the website. As a decision for questions that do not yet exist.

Every operational decision either reinforces the North Star or erodes it.

There is no neutral.

The question I'm sitting with this week:

If holding my stated values became a competitive disadvantage, would I hold them anyway? And if the honest answer is no, what does that tell me about whether I actually believe them?

Talk soon,