These Simple Business Lessons From 'Casablanca' Could Save The American Economy

Ilsa Lund

One mistake many companies make is emphasising short-term profit at the expense of long-term value.

In squeezing every dollar out of a business today, the companies often reduce much greater value they could have created tomorrow.

By focusing only “shareholder value,” they also often neglect other constituencies–namely, customers, employees, and communities.

The best companies create value for all of these constituencies, not just shareholders.

They make a reasonable profit, not a “maximized” one.

And they continually sacrifice short-term profit opportunities in the service of long-term investments and other values, some of which have nothing to do with money.

I was reminded of this recently when I rewatched “Casablanca,” the 1942 Warner Brothers movie starring Humphrey Bogart and Ingrid Bergman.

It’s mostly a love story and war story, of course. But there are plenty of business lessons in there, too.

The trend of maximizing profits at the expense of other values is part of what’s wrong with the American economy these days.

So it’s worth highlighting the business lessons of Rick’s Cafe Americain.

He's not kidding.

Rick's is jammed.

It's so popular, in fact, that it's more than just a fixture in the community.

It is the community.

Rick's is successful in very large part because of its excellent and loyal staff. For example, there's Sascha at the bar...

Carl on the floor...

And, of course, Sam at the piano.

Later, we'll see why Rick's staff are so loyal and why they do their jobs so well. But first we meet Rick himself.

He's in the casino, playing chess with himself.

The first thing he does is authorise a payment (told you this was a business story!).

Then a bigshot German banker knocks on the door and wants to come in and gamble. The bouncer looks over at Rick.

Rick shakes his head.

The bigshot German banker gets agitated. Rick goes to the door and rejects him personally. He doesn't want this particular customer's money. (The movie was made in the middle of World War 2, don't forget).

Outside, in the main dining room, Sam's playing to a packed house.

Rick says Rick's is not for sale. At any price. For Rick, business is not just about the money.

Ferrari tells Rick he should get into that business, because it's Casablanca's leading commodity.

Ferrari gives up.

And goes back to swatting flies at his own restaurant, the decidedly less successful Blue Parrot.

Back at Rick's, Sascha the bartender tells Rick a German gave him a check and asks if the check is all right.

As Rick walks to the safe to get the money, Renault tells him that they are about to arrest one of his customers. Renault chose the cafe for the arrest, he says, because everyone would be there to see it. Again, Rick's is so successful that it's the heart of the community.

Annina tells Rick that she has no money to buy a visa. Rick is unmoved. Then Annina tells Rick that Captain Renault will give her the visa if she has sex with him. That's all Rick needs to hear.

Annina's husband Jan is in the casino, trying to win the money at roulette. But he's losing everything.

Jan tries 22.

It's a good bet!

Watching nearby, Carl is thrilled. He knows Annina's story. And he knows what Rick is doing.

Jan wins four huge stacks of chips. Rick tells him to leave them on 22.

It's another good bet.

Rick tells Jan to cash in his chips.

Carl is overjoyed.

He rushes to the bar to tell Sascha.

Once again, for Rick, it's not just about making money. It's about creating value. It's about using Rick's as a force for good. And this makes employees like Carl care much more about their work than if it were just a financial transaction.

Later that evening, the real trouble starts. The Nazi contingent in the cafe, led by the story's villain, Major Strasser, begin to sing a German anthem.

The freedom fighter Victor Lazlo and Rick hear the singing and emerge from Rick's office.

Nervous, the band members glance over at Rick. The Nazis have taken over France, after all.

Rick nods his assent.

The Nazis briefly try to outsing them. But in a moment, their song is drowned out.

Strasser is humiliated and furious. He orders Captain Renault to shut the cafe down.

Captain Renault blows his whistle and orders everyone out. This cafe is closed!

Rick confronts Renault: How can you shut me down? On what grounds?

Well, running an place like Rick's is an expensive proposition, especially when you have all those employees and there's no cash coming in. So it's time for a money meeting with Carl.

So, it's the moment of truth. Will Rick furlough all his employees until he persuades Captain Renault to reopen the cafe? Will he frantically cut costs to save his money?

So those are the business lessons of Rick's Cafe: Great companies sacrifice short-term profits to take care of their employees and do the right thing. In so doing, they build long-term value that is often worth more than money.

What can a 70-year old story about a cafe in North Africa teach us about how to fix today's American economy? A lot.

The profit margins of big American companies have hit an all-time high.

And the wages these companies pay their employees--the human beings who make them successful--have hit an all-time low.

As 'Casablanca' makes clear, truly successful businesses are about much more than money.

They're about people.

And community.

And doing the right thing.

American business, in other words, could use a little less Ferrari and a little more Rick.

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