Purpose or Profit, That is the Question:
It is my belief that having meaningful purpose is the driver for right behavior and for sustainable business success. I am fortunate to have founded 2Swell, a company with a mission that matters; the “why” is what motivates us; but let me first tell you “what” we do.
2Swell is a business advisory services company that helps entrepreneurs improve their market strategies, brand positioning, human talent, sales & marketing tactics and processes. Our goal is to make them better and grow their organization. What drives us, is their success.
Do you remember the first time you were faced with an ethical dilemma, needing to decide between “right or wrong”? For me it was very fundamental and happened on the playground a long time ago. In summary, it came down to learning the “Golden Rule” widely known as the need to “treat others the way, you like to be treated.” It is a simple rule we all know and remember. For me that early memory was the beginning of developing integrity.
The Golden Rule seems simple. Then we start setting goals; first in school with grades and then in business. Many of us are accomplished by business standards and started our professional career with passion, ideals and missions greater than ourselves. However, along the way, I have found that the Golden Rule is not always as clear-cut as it is on the playground. In addition, our original, more intrinsic passions that fueled our success tend to seep into the background as we attempt to climb the business ladder.
We become driven by success within enterprises that are run to make a profit. Success is mostly measured by numbers and along the way, what is right may not always be aligned to what is deemed successful. We perform the best we can and although never forgetting, nor ignoring our ethics, we are in fact working in the service of making money.
Recent news demonstrates how serving “making money” can lead to disaster. The CEO at Volkswagen, Martin Winterkorn, set out to beat Toyota in sales. This year, after and 8-year effort, they succeeded. One should note that VW did not announce they were going to beat Toyota in quality, but in sales!
General Motors had similar challenges around their ignition switches. During those times their publicly stated mission was defined as: “our stock-holders will receive a sustained superior return on their investment.” After Mary Barra took over as CEO at GM, their message changed and their investor website now states “Our purpose begins with a few simple but very powerful words, we are here to earn customers for life.”
Lets imagine two car companies; one that says it will drive shareholders value by selling great cars and another that says it is dedicated to satisfying clients for life. Which one do you think is most likely to increase long-term sustainable shareholders value consistently?
There are many good examples. Take LinkedIn. It has a purpose to "connect to opportunity" and they aim to align all their strategies and activities to this mission. It is driving behavior and influences success: growing from 500 employees in 2010 to about 10,000 today. During Q3 they announced another record quarter of 32% growth.
InterContinental Hotel Group is another example. IHG aligns everyone to its goal of operating "great hotels guests love,” and this noble purpose carries through in all other places. This is what they tell employees: “We promise to give your room to grow. This means we’ll invest in you, no matter what region, function or role you are in.” It is about purpose. Their consistent message tells their people that: "we want you to be loved." The right behavior is promoted, rewarded and performance follows.
Here is the thing about ethics and values. As leaders we can train and tell people what to do and not to do, but if the narrative is solely about making money consistently, behavior of our precious human capital will support profit as the priority. Alternatively, if our goals are clearly aligned to serving a noble purpose directed at your customers, community and our team members, the right behavior and performance will result as well.
So what about 2Swell? In 2008, after a relatively long and successful career in hi-tech, I was surprised by some meaningful personal and professional headwind. It allowed me to realize that I had lost some passion and purpose. When presented with the opportunity to lead getAbstract, Inc. into its next growth phase, I was immediately excited. Not only did the business have significant opportunity for all involved, it already had very a meaningful goal as well; a perfect combination. getAbstract’s noble purpose is to help professionals make more informed decisions, turning them into more successful professionals, while helping their companies succeed, all while democratizing business knowledge across the world. As a result the company helps over 1,000 companies elevate the quality of their human talent and have grown nearly three-fold over 5 years. After this successful adventure, we founded 2Swell, and now we get to help many companies like getabstract unlock their potential and leverage their noble purpose a key catalyst.
While at getAbstract I got to “hang” with some pretty impressive authors and thought leaders who teach us how to apply their thinking. One of my favorite authors is Lisa McLeod, an expert on the topic of Noble Purpose. She explains how companies with a Noble Purpose outperform the market by 350%. She also highlights getAbstract in her book, Selling with Noble Purpose, as a company that follows some of her practices.
Here is some practical advice from the both of us on how to bring Noble Purpose into your business to drive growth and keep ethics in line:
- Know what your noble purpose is. Understand how you and your business make a meaningful difference in the lives of your customers. Then make sure your team knows it as well. Remember, noble purpose is not about charity; it’s about customer impact.
- Evaluate your airtime. Be aware of what you “talk” about with those around you. How often do you ask about revenue numbers versus client value? I recently listened to DaVita’s quarterly earnings call and the CEO started by talking about how they have helped their patients that quarter: a very powerful and public example by its leader.
- Understand and articulate your "back-story". Your team and clients wants to know that you are passionate about the business and its mission. They want to understand why it matters to you and that it is authentic.
So, what is the definition of an ethical organization? I think it is when people do the right thing even when nobody is watching. They do this when their actions are aligned to a Noble Purpose; work they are proud of doing.
For doubters who are reading this, let me say this: it is true that no amount of purpose makes up for bad management or lack of strategy and execution. However, very often "What got you here won’t get you there.” a quote by another amazing author, Marshall Goldsmith. Just think about Volkswagen. What got them 8 years of impressive growth will not get them the same growth in the 9th year.