Profits and Purpose

Profits and Purpose: It is in the founder’s interest to start the business knowing that we are all interrelated and interdependent. That is quite easy to recognize, but hard to act on. Accepted economic wisdom tells us it’s the job of a business to maximize profits. Politicians talk about the economy doing well, when many people struggle. They glory in output and GDP, but seldom in outcome and changing the world for the better for us and them.

The startup will actually perform more successfully, when not exclusively fixated on profits and growth. Goals balanced between profits and purpose will produce better results and a better world for all.

What? Surely that can’t be true! Of course it’s true, otherwise why do 64 ,per cent of people say that CEOs should take the lead on change rather than waiting for government to impose it. In the US, 54 per cent of people consider that it is easier for us to get brands to address social problems, than it is to persuade government to take action¹.

“While many job seekers focus on finding a position that offers financial stability and career advancement, an increasingly critical factor is the alignment between an employee’s personal values and the values of the organization they work for,” says Marian Evans writing on Small Business in Forbes. She lists the five benefits that employees get working for an organization that aligns with your personal values, by a focus on profits and purpose.

These benefits are ones that not only apply to the employee, but also to the employer, as a consequence:

1. enhanced job satisfaction;
2. improved mental and emotional well-being;
3. increased motivation and productivity;
4. stronger organizational commitment and loyalty;
5. personal and professional growth.

Doing the right thing brings business value, stressing the importance to bring Ethics, Equity and Empathy to the workplace. Mmmm.

Are You In Business for Profits and Purpose?                                                                                            

These are the kinds of reasons why your brand or company needs to make clear why it exists, as much, if not more than, what the product is. If the business is not living its purpose genuinely, consumers and buyers will get to know pretty quickly. Hollow claims by the company and its people will be spotted as window dressing, rather than a genuine culture of profits and purpose. 

Profits and purpose are both needed for survival and success, especially with the degree of greed, hatred and self-deception that are so prevalent. If you are intent to startup with purpose, then you have to be sure that you have the right understanding of what’s going on in society, exercise right thought about the contribution the firm can make to a better world. Be sure to say the right thing about why you are doing what you’re doing, and how the brand you sell fits your purpose.

That is not enough, though. Your actions in the light of all that reflection have to be right. Everything about the employment you offer has to be right. The company has to put in the right amount of effort to ensure that words and action coincide. Everyone in the business has be mindful about what’s happening and apply the right level of concentration to make sure that all the commitment to doing the right things impels the venture to flourish.⁴ Words like respect, fairness, honesty, and compassion will be inherent in the way the business operates.

All of the people in the new venture that espouse profits and purpose have to behave ethically and exercise wisdom about all that they do—to the best of their ability. You can see some of the ways that you can put this into practice at Purpose and Profit Framework, Purpose Driven Startup Coherence, Successful Startup Behaviors Match Purpose, or at Beneficial Values.

Values Not Lived are Value-less

Perhaps it would be better if companies did not publish their missions and values statements, if they are poor at living them. Arrogance hides credibility.

For example, Volkswagen doesn’t have a formal mission statement, but its goal is “to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.” VW’s vision statement is “to make this world a mobile, sustainable place with access to all the citizens.” In April 2017, a US federal judge ordered Volkswagen to pay a $2.8 billion criminal fine for “rigging diesel-powered vehicles to cheat on government emissions tests”. No wonder the CEO resigned.

Similarly, United Airlines used to say, “Every day, we help unite the world by connecting people to the moments that matter most. This shared purpose drives us to be the best airline for our employees, customers and everyone we serve.” And then they lost $800 million in quoted equity value in one day, after they had forcibly ejected a passenger from a flight. A few years later, the “New Spirit of United” statement says, “We Fly Friendly. Warm and welcoming is who we are.” I wonder why?

Corporate misdeeds such as these and many others are cautionary tales for entrepreneurs. You might think that new ventures with no outside shareholders would avoid being caught out. They generally do not hit the headlines when they transgress but they do suffer ignominy through business failure as a consequence of loss of customer confidence. Not have a commitment to both profits and purpose may lead to difficulties in recruiting good staff, attract negative feedback on public comment websites, being penalized for unethical behavior—and by not being invited to bid for public contracts…

Startups should watch the big boys and avoid misbehaving, or better still, aim to have a deep-rooted commitment to and a practice achieving both profits and purpose.

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