"Profit is not a legitimate purpose of a business. The legitimate purpose of a business is to provide a product or service that people need and do it so well that it is profitable." - James Rouse.
James Rouse (quoted above), was the founder of The Rouse Company, a property development group that revolutionised shopping centre development and urban planning in the U.S. He was also a vocal advocate for the purpose-driven business.
Rouse's push for purpose-driven business was built around the belief that profit is a validation of the deep purpose a business is seeking to see fulfilled in their chosen market and the wider-world.
Unfortunately, many executives, principles of firms and start-up founders fall into a trap (it's ok, we all do it from time to time). Where a chasm is formed between purpose and the outcomes (and the measurement of those outcomes) that determines the profitability of the business.
Whether intentionally or not, we fall into a default setting (both as individuals and as a business) seeking measurement of our success based on profit and a bank-balance, rather than the purpose we live for and it leaves us trapped...
In the 2010 sequel, Wall Street - Money Never Sleeps. Jacob Moore (Shia LeBoeuf), asks his adversary, Bretton what his number is to walk away, where he would be truly satisfied. His response was "more".
"Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has, the more of it one wants." - Benjamin Franklin.
Deep down this notion of always wanting "more" is embedded in how business is run. Whether it be needing to outperform financial year-on-year guidance, meet key performance metrics, which drive the profitability of a small to medium enterprises (and bonuses to an employee), or hit higher and higher milestones to appease investors in a start-up before they invest more to accelerate growth.
This desire is at the heart of how business operates, and we are always needing to hit another target, meet the next milestone, we always left needing "more".
This approach is what deeply affects the solace of many business owners, partners/principles of firms, start-up founders and even career warriors, as it is this hunger for appeasing the beast that pulls us away from living out the purpose for ourselves and our businesses to make our "dent in the universe".
"The brands that will thrive in the coming years are the ones that have a purpose beyond profit." - Richard Branson.
The truth is culture speaks to the narrative that we can only attain purpose and freedom by breaking free of the rat-race, something we are told is only possibly with enough financial freedom. So whether you’re a business or an individual, I can guarantee your default thinking will often pull you into seeking profit first as the precursor to purpose.
We're led to believe that by just needing that next investment to succeed or hit that next milestone, or that next bonus we may just discover our purpose, but it has the opposite effect we actually lose greater sight of the purpose we are seeking.
So while we can’t find our purpose through profit, I argue we can profit heavily when we can live out our purpose that transcends our community, business and life.
This post is for those who lie awake at night, who feel stuck, who know there’s a gap between where you are and where you want to be. You may have just had a streak of successes, or you're struggling with clarity of direction, you might be someone with a thriving business, or a principal of a firm or a start-up with the “hockey-stick” like growth chart. But you know there is a need to adapt your business-model to bridge the chasm between your purpose and the profitability of your business.
So how do you do it? You need to firstly, start with yourself and then your business.
It doesn’t matter what facet of business you play within, your actions within your role as a leader is an extension of you personally. So if you cannot manage yourself and stand firm in the purpose you feel you are running the race for, then what good will you be in having impact in your business and your team’s life?
"The purpose of life is to discover your gift. The work of life is to develop it. The Meaning of life is to give it away." - David Viscott
Just like on a plane, you must put your oxygen mask on first, before you help others...
Well, business is no different.
So here are my 2 tips to do so:
Don’t be Authentic with yourself, be Truthful.
Culture has deeply screwed our understanding of authenticity. People typically define authenticity as being utterly transparent with one’s deepest wants and desires and an openness about the determination to achieve them.
This is a flawed thinking, as it diverts our attention away from confronting who we are. The original intention of authenticity comes from being truthful with yourself in a way that acknowledges and encounters pain that we may have buried. It’s really about recognising who we are deep down and growing through areas that are uncomfortable.
"If you trade your authenticity for safety, you may experience the following: anxiety, depression, eating disorders, addiction, rage, blame, resentment, and inexplicable grief." - Brene Brown
It is by growing through the pain, acknowledging the deep challenges that we commonly choose to bury that we need to confront. That deep introspection supports our own personal development in a way that the bastardised version of authenticity diverts our attention away from.
This development is critical for all entrepreneurial leaders, as we are constantly confronting challenges, which we need to have resilience and confidence in who we are. Otherwise, at the first sign of a challenge, our insecurities take over and impact our ability to continue to bring our purpose into reality.
Life Hack #1
Give yourself space to become more aware of your own thinking and reasoning. Your actions are a result of your thinking, which deep down are a representation of why you do what you do. So having awareness of your purpose will support your actions that help bridge this gap.
These questions will get you on your way:
- Write out a vision for your life, what purpose and impact will you have?
- What's the greater narrative you want your life to live within?
- Does it confront your challenges you’ve faced personally and grow you or do you still choose to divert your attention away from it?
- What human or world need does your personal purpose address and seek to solve?
- Does your present thinking and reasoning align to your purpose? Or is it in conflict? Remember actions, thinking and reasoning can change, but the precursor to that change starts with a shift in thinking towards your new found (or re-kindled vision and purpose).
Our desire for Freedom, Stole our Freedom.
French Marketing Guru, Clotaire Rapaille was employed by Chrysler to sell Wrangler Jeeps to the market. Through countless consumer interviews Rapaille discovered that everyone wants a vehicle that reflects their desire for freedom.
The advertisement was made and it cast the Jeep as a modern day horse, representing the consumers desire for freedom and mobility.
This belief and our hunger for freedom is seen everywhere today, especially in our low-commitment culture, where social commitments are now non-binding depending on our wants and desires. We choose individuality and autonomy over social cohesion, yet, freedom like this binds us. As our freedom of choice becomes paralysing (by having too much choice), impacting our ability to (with clarity) rightly choose what to do.
The age old saying that money buys happiness, is flawed, it buys opportunity, but that’s flawed too, as that freedom of opportunity leads us to paralysis, as we become inundated with choice.
"A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power." - Brian Tracy
Opportunity at the expense of purpose is paralysing and we look for the next income producing milestone, we get distracted with extensive options or we seek reinforcement for our self-worth via out bank-balance that we forgo the effort to bridge the gap to purpose for the tangible measurement-trap of profit.
Life Hack #2
Once you have clarity of vision & the world need you would like to see solved within your purpose, consider a decision-matrix that filters your actions and opportunities. Then leverage the process called “First Principle Thinking”. By doing so, you will always consider your actions in the context of the greater narrative and purpose you live your life within. This will stop you from taking on too much, being overwhelmed by opportunity and becoming paralysed.
These are 2 starting strategies that will help you gain clarity around the greater narrative to live your life within. Ultimately, you need solace as a business leader, you need to withstand the onslaught of struggle that life throws at you and make that difference in the world.
You’ll know deep down if this area needs work.
Purpose is critical to engaging and retaining the best people. Done with the right approach it creates a deep and shared understanding, driving a sense of intrinsic reward beyond the superficial motivations of reaching a profit target and receiving income/bonuses.
It is this emotional bond and engagement that supports a business achieving a sustainable competitive advantage both as a branding point of differentiation, but also enhancing your teams productivity in a sustainable way shifting your company from good to great.
But how do you instil a greater narrative within your business? Here are 2 ways to short-circuit your experience and support that purpose-driven growth in your business.
Recognise your Ego to support the shift from the Ego to the Eco.
I can’t take credit for that para-phrased title. Otto Scharmer’s Theory U (an approach I have advocated for and advised on over the last 10 years, after studying it in 2008) lives and breathes this catch-phrase.
And he isn’t wrong, organisations must recognise that their longevity and sustained growth lies in their ability to look beyond themselves (as a business), develop deep stakeholder awareness and reach into their community and develop positive impact, as well as, delivering exponential profit.
"Society and Business must move from the ego-system to eco-system economics. This requires that we shift from the ego-system silos to the eco-system awareness that considers others and includes the whole." - Otto Scharmer
However, before we can truly identify what impact we can have. There is a need to define/create the purpose of the organisation, as it creates the focus that drives what area of the eco-system to have impact in.
Many of the books, authored (or co-authored by Scharmer) Presencing, Theory U and even earlier, The Fifth Discipline (written by an associate of Scharmer, Peter Senge) speaks to the eco-system and recognising your place in it (and how to effect change for greater business growth as well as deeper impact in the community). However, what I discovered is that many readers/students of this thinking, often over-look the chapters where it calls for us, as business leaders, to start from within.
That’s no surprise, as we commonly choose to not give weight & time to strategic, introspective-systems thinking that allows for us to notice/confront how our lack of purpose is negatively affecting our business growth, our staff engagement and ourselves.
Business Hack #1
Develop an organisational purpose built around an idea, empowering your team to support the creating of what this idea looks like. Ensure that this idea transcends beyond the product or service race but one that speaks to the heart of your organisation’s “why”, one that builds a culture of purpose, before profit.
Think of a law-firm, for example. If you consider the notion of purpose for a law firm, what is it? What matters most to them? Surely, the answer isn’t just “money” or “6minute billing periods”?
If it is and you are a principle of a law firm, with key decision-making influence, I’d encourage you to re-evaluate your purpose.
And what you can do is bring together all the executives and genuinely giving time and energy to determining a purpose and thus brand that ensures confidence that your firm can maintain distinctive and continuing relevance within your industry.
"Good business leaders create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion." - Jack Welch
So what’s your business's purpose? Can you deep down say your business has clarity around this area? If not, put this right at the top of your next board meeting as an agenda item and then book a strategic planning and/or executive retreat to get everyone clear on what your purpose is.
Remember the “fish rots from the head”, so if your leadership isn’t clear on purpose, your employees won’t have that clarity and will model incongruent actions and profit will continue to prevail (as the default-mode) over bridging the gap, and allowing for your purpose to be the core-driver, which delivers greater profit for your business.
Innovate Your Business & Management Model to Solve a Social Need.
Ok, so we’ve addressed yourself, your purpose, your business & the leaders within your business. Now, consider your business management structure & the processes themselves. One of the keys to bridging that gap between your purpose and profit comes from springing your business out of the measurement-trap (where reliance on figures and quantification becomes the be-all and end-all in a micro-sense).
Let’s continue on the theme of the law-firm. After you’ve ascertained your purpose, you are on the path to implementing ways to encourage your staff to shift from an old model of thinking and doing to the new.
Ask yourself, what themes of social focus have come about from developing a clear and transcending purpose? Perhaps you discovered that mental health was a major concern within the workplace, due to the previous toxic cultural days of old? As such, not only do you choose to want to deliver social outcomes that curb that problem in the workplace, but also within society itself…
"Explore this next great frontier where the boundaries between work and higher-purpose are merging into one, where doing good really is good for business." - Richard Branson
As such, you choose to ditch timesheets. The idea of “6minute billing periods” were an old corporate and very-non-human way of managing your staff. They are an obvious profit-driven style of process, which conflicted with your shift towards the purpose driven one.
Or perhaps you’re a start-up or you have a project you are beginning from scratch? Right now you have the luxury of a clean-slate with a fresh idea.
Everything you do now going forward is a new habit and process that is implemented will be modelled time and time again (as the way it “should” be done), it’s important to acknowledge the power of that.
So imagine that if at the heart of everything you implemented right now you could build deep purpose around? As a leader, your actions speak so much louder than words and if you drive an intentionality around purpose-driven processes, which have the outcome to build sustainable and profitable outcomes….watch out. Your staff and consumer/client engagement will exponentially grow and so too will your business’s bottom-line.
Tom's Shoes, Warby Parker, ArtLifting & Marque Lawyers are 4 of many companies globally who are living and breathing this approach today.
Business Hack #2
Real leverage in purpose-driven business process comes from what you measure and quantify and how you recognise how that plays within your business system. Imagine if your measurement-systems could deeply consider the actions by your purpose and how they improve your profit, vs simply measuring the transactions and their margins? In this setting you would be linking the performance metrics of the company and your team to the purpose-led strategy. Always having confidence that your purpose is being lived out within your business.
The most successful way to do this is to map out your purpose and the social need you're solving in the context of the 3 performance levels of your business:
The Organisational Level - Has your purpose been articulated and communicated in a clear manner? And does the purpose have clear outputs linked to performance expected? Has your business structure been designed in a manner that reflects your purpose?
The Process Level - Are the actions for the key processes linked to the consumer/organisational requirements? How does your purpose shape the designing of your business processing to both achieving profit and social outcomes?
The Job/Performance Level - Are the job outputs and expectations linked and aligned to the purpose and social outcomes? Which are in turn linked to the consumer requirements to deliver profit? Has the culture and job environment been designed in a way that reflects this purpose?
These are all part of an extensive list of variables that need to be considered when you seriously consider how to bridge the gap between your purpose (the social impact of your purpose) and profit. You will know as you run through those initial questions whether you need to make changes that put purpose back in the driving seat of your business.
In all honesty I could write for hours on this and maybe one day there will be a book...but for the time being, as leaders, if you haven't already please consider your purpose and its impact in the context of both your personal life and how congruent it is to the business which you operate or work within.
It doesn't matter what stage in the business lifecycle you are at, you will know whether there is a chasm between your purpose and the profit (or forecasted profit - in the case of early-stage businesses).
Your sanity, your fulfilment won't be found in profit and if you're someone who believes just one more deal will get you the financial freedom to discover your purpose or help your business have space and time to truly engage with that process of discovery. I promise you, it won't, you will always want more...
“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” - Mark Twain
There is no such thing as free time for these things, you have to intentionally make the time.
The tide is turning, you can no longer afford to let this chasm between profit and purpose remain. Real fulfilment, proper consumer engagement (with the rise of the conscious consumer) and sustained profit comes from living out your life and business in the context of a greater narrative. One that through your purpose-driven profits allows for you to amplify your impact beyond your organisation and into the local and global community, making the world a better place.
Go well and cheers,
Coaching | Strategy | Growth Ventures
Bridging the Gap Between Profit & Purpose