From my earliest days as a business leader, I understood that a business had to have a clear, unified purpose in order to be successful. It was drilled into me – in school, by business thought leaders, by my Boards of Directors, that the ultimate purpose of a business had to be profit. I believed it. No – I accepted and embraced it. At my last business, we articulated our purpose as “to make more money now and in the future.”
I was wrong.
It always felt a little hollow, to be working for profit above all else. Yet it also made sense. After all, why have a business that doesn’t make a profit? But had I stopped to think deeply about it, I would have realized much sooner that profit and a higher purpose are not mutually exclusive.
The first real challenge to my profit-purpose-assumption came when I started my current company. As I began the strategy process, I started from the top down. “The ultimate purpose of this business is to make more money now and in the future.” But it didn’t sit right with me. Without partners to negotiate with or a Board of Directors to appease, I kept recoiling at the idea of being primarily focused on “making more money now and in the future.”
So I threw that purpose out and began to list the reasons I was opening this business. Some were very personal, such as the freedom to always put my family first, the desire to put into action business concepts that I have long pondered but which met with resistance, and working within an ethical framework from which I never felt pressure to deviate.
Other reasons were more philanthropic. I wanted to create a very human, uplifting and creative employment experience. I wanted to further refine the practice of collaborative management. I wanted to pay a meaningful wage for meaningful work. I wanted to serve a specific community of customers with services they needed, and I wanted to see that community become increasingly successful.
What I realized is that a business must have a bigger purpose than profit. That instead, the purpose of profit was to serve the higher purpose of the business. It was like I had been wearing my slacks inside-out for 20 years. Suddenly, with the pockets and buttons on the outside, they felt better. Everything fit better.
Does this make me a granola-eating-Birkenstock-wearing-naïve-excuse-for-a-business-owner? Well, I am some of those things, but I don’t believe I’m naïve. What I am is more motivated. More motivated to have my business produce a profit so I can remain committed to our higher purpose, which is:
To create a fulfilling, enriching, and life-balanced work experience for my employees and myself while making significant contributions to the success and well-being of small business owners and entrepreneurs.
Eight years later, this purpose continues to serve my company well. When we have discussions about wage increases, we discuss them in terms of creating the profit to support them. When we discuss creating new services or products for our customers, we talk about them in terms of the profit we must generate with them to make them widely available. Over and over again, profit serves purpose.
More importantly, the stakeholders in this company understand that this company exists for them and for the customers to whom they have become committed. If the purpose was merely profit, how could they possibly feel as committed, even if a portion of that profit was set aside for them?
I’m sure there are people for whom money as a purpose is very exciting. But I suspect that far more people are motivated by the things that money can do, can create, can cause. Now that I understand that profit is the means to an end, and not the end in itself, I will never look at business purpose the same way again.
What’s your business purpose?