Bose Corporation, a Boston area iconic company that has for decades manufactured top-of-the-line audio delivery systems, is a private entity whose stockholders do not seem to care about the value of their stock.  That is because there is no market for it and the controlling stockholder, MIT, seemingly is neither allowed to vote nor participate in management; and, it cannot sell its shares.

Thus sayeth the (fairly new) CEO, Lila Snyder, in remarks last Friday at Neptune Advisors’ ongoing and engaging  lecture series entitled C-Level Community. (I have no specific knowledge as to the corporate structure at Bose and the foregoing is my take-away from Ms. Snyder’s remarks.)

Is there a link between lack of shareholder pressure and the luxury to carefully and slowly engineer the absolutely best possible products?  It was asserted that lack of shareholder pressure on stock price or earnings does allow Bose products, wherever installed and whatever the form of the device, to cater to the highest standards of lovers of music.  Sound quality at Bose is evaluated in musical terms, far more demanding than clear transmission of human voices. This standard and the lack of stockholder pressure allowed Bose scientists to pursue “beautiful ideas.”

That said, over the last few years Bose had a series of layoffs of its inventive scientists.  Why did that happen?  The explanation, if I infer correctly, was that the company had previously aimed at perfect product performance, without regard for whether there was robust public demand for a given product.  Today, the product approach is to expose the scientists to the folks who evaluate what the broader public wants–all the time keeping the standard that products must produce music-quality sound.

While not clear to me that the story line is fully consistent– if you really were after perfect sound as your goal then why do you care that you only sell $5,000,000 of a gizmo and not $25,000,000– the result is pretty clear.  Smart people who are running companies want to make money whether public shareholders demand it or not.  And the new CEO, articulate and frankly quite impressive, came to Bose via McKinsey and a series of high-level positions which trained her to care about making money. And indeed, you cannot run an enterprise perpetually and lose money, as you simply go out of existence.

I apologize to Bose if I am too cynical to be completely in tune with the music that was played.  I have Bose equipment and it is indeed superb.  I will no doubt buy more of it in my lifetime.  I just don’t quite know how to process the offered take-away near the end of the session: as my notes have it, “values endure but culture is a living organism, it must evolve with strategy that addresses the market.”

Bottom line: I suggest that Bose today is operated substantially like any company that cares about the value of its shares of stock; what was in the past is in the past.