The Growing Business Credo: Purpose beyond Profit

Sometimes, in our quest to be successful and have impact, we may forget that titles and price tags are not the only qualifiers of success. Until we overcome the mindset that the road to success is measured by profit and titles, we will achieve very little in terms of making the world, the marketplace, society, or the environment a better place to live and work. I refer back to wisdom that has provided truth and results throughout the ages that we may need to remind ourselves of and reconsider.

Timeless scripture states: Let no one then seek his own good and advantage and profit, but rather each one of the other, let him seek the welfare of his neighbor.1

In fact, executives in many leading companies have come to the conclusion that impact and competitive advantage both come from being purpose driveQuotefancy-30117-3840x2160(1)n, with a purpose that goes beyond profit.

This quote from Richard Branson, founder of Virgin Group with the title of knight and a price tag of $5.2 billion, highlights the importance of purpose beyond profit for companies and individuals who want to thrive and to make their brands known.

Higher purpose activates and shapes corporate culture, stakeholder engagement, and the models of corporate leadership. Companies that are purposefully inspiring evoke trust and engagement and are even loved by employees, suppliers, customers, and stakeholders, through conscious capitalism.2 Nobody denies the importance of profitability for the survival of a company, however, thriving and leading an industry is not derived from profitability alone, it is indeed derived from companies with a higher purpose and a competitive mindset that goes beyond mere profitability.

While population ecologists in the business sciences have explored drivers of survival3, it is possible that drivers of thriving (and not merely surviving) may be quite counter intuitive. Shouldn’t a leading firm seek first its own good and competitive advantage and profitability? Can a firm actually thrive by putting the welfare of stakeholders, employees, and customers first?  Recent research into business ecosystems suggests that this is indeed the case! Firms need to work with all of their stakeholders to create system wide value, which sometimes even includes competitors4! Successful firms like Starbucks put employee benefits at the top of it strategic plan and Starbucks even states: “We are performance driven, through the lens of humanity.5

I would suggest that if we want to make the world, the marketplace, society, or the environment a better place to live and work perhaps the way to achieve this is not through narrowly pursuing a firm’s or individual’s good, competitive advantage, or profitability. If we want to make the world, the marketplace, society, or the environment a better place to live and work, this will be achieved through purposefully pursuing the welfare of one another (suppliers, customers, stakeholders, employees, and sometimes…even the welfare of competitors).

References

  1. https://www.bible.com/bible/8/1co.10.24
  2. http://www.consciouscapitalism.org/purpose
  3. Hannan, M. T., & Freeman, J. (1977). The population ecology of organizations. American journal of sociology, 929-964.
  4. Stolze, H.J., D.A. Mollenkopf, D.J. Flint (2016). “What is the Right Supply Chain for Your Shopper? Exploring the Shopper Service Ecosystem. Journal of Business Logistics. 1-13.
  5. http://www.starbucks.com/about-us/company-information/mission-statement

3 thoughts on “The Growing Business Credo: Purpose beyond Profit

  1. It’s the difference between “doing well to do good” or “doing good to do well.” See Drucker 1984 for a great discussion on “The New Corporate Social Responsibility” from 30 years ago.

    Liked by 1 person

    1. Diane, I totally agree!!! It’s not a new concept, so it’s reassuring that doing good is becoming more of a norm. As a self proclaimed social ecologist, Drucker has said all of this as well! I’d love to see “The New Corporate Social Responsibility” incorporated into more business curriculum and practice!

      Like

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