Putting purpose before profit can pay off in the long run
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Putting purpose before profit can pay off in the long run

Author: Ember Television | Posted on: 21 January 2021

 

purpose

 

What’s your why? You may have been asked this question as a business leader, and for good reason. An intention to do good in the world as well as making money can allow businesses to thrive in the long term. In fact, marketer Tom Poynter — writing for The Drum — predicts that overtly addressing issues of sustainability and social justice will be an essential branding task for companies who want to survive into the next decade:

“By 2030, we predict consumers will be on the front foot with their conscious credentials: information-hungry and downright demanding of brands … Companies that innovate then shout their story to the [conscious] masses are the ones who will win.”

This idea of conscious capitalism was created by author John Mackay. In his book Conscious Leadership, he defines the term and explores exactly what it takes to be a conscious leader.


Making a profit needn't be your sole purpose

One of the key messages in the book is that it is possible to make a profit while also doing good for your community and the environment. Despite organisations being described as either not-for-profit or for-profit, these endeavours can exist side-by-side for any business.

An example given is outdoor retailer REI, a financially successful business that also encourages people to reconnect with nature. One way that they do this is by giving all employees a paid holiday on Black Friday every year. Instead of working or sale shopping, they encourage their audience to spend the day in nature. By taking this stance on the most profitable day of the year for retailers, REI instead prioritises purpose.

The key to achieving this complement, according to the author, is conscious leadership towards an empowering ‘why’.


What is a conscious leader?

A conscious leader is the glue that holds everything together, according to the author. They must undergo personal transformation, lead with integrity, and live according to their values.

A conscious leader’s personal transformation begins with the recognition of their own personal why. For Mackay, this was the experience of walking through a Whole Foods to see the customers and staff happily conversing.

He realised that the store wasn’t just about selling food. It was actually about making people happy and helping them to live a healthy life eating nutritious food. From then on, this purpose guided all of his business decisions.

As well as identifying their purpose, a conscious leader must lead with integrity. Just like Ramón Mendiola, CEO of FIFCO, who decided that, in spite of the business’ overwhelming success, they could still be doing more.

He didn’t plan on making more money. Instead, he wanted to improve the way the company gave back to society. He worked with his team to increase the percentage of profits given to philanthropic causes from 1% to 8%.


The win-win-win scenario

The result of Mendiola’s work can be described as a win-win-win scenario, a concept that Mackay introduces in the book. He believes that in any business transaction it is possible to benefit both parties as well as the wider community.

He believes that it is vital to pursue this scenario if you wish to be a conscious leader. But how can you ensure that an outcome is win-win-win?

Here are some questions that Mackay advises you ask yourself each time you make a decision for your business.

  • Is anyone losing in this proposal?

  • Could anyone see themselves as having drawn the short straw?

If the answer to either of these is yes, working with your team to find a better solution. 


The role of your team in conscious capitalism

Of course, to be a conscious leader, you must be leading a team. So what is their role in conscious capitalism?

According to the author, your team plays a large role in it! Remember that the most successful entrepreneurs have brilliant teams behind them to help them deliver.

Therefore, building a workforce and a working culture that supports this vision is key. It begins with hiring talented individuals and investing in their professional development from the outset. Additionally, checking in regularly to resolve challenges and streamline processes will allow your team to work well together.

One example of good practice given in the book is Steve Hall, founder of driversselect. Hall’s hiring process requires that any entry-level applicants be interviewed for their potential to progress into more advanced roles. Following onboarding, he also invests in their development to ensure they can achieve those promotions. While his hiring process takes longer, his staff turnover rate has been dramatically reduced.

If each of these points is followed, Mackay writes, it is perfectly possible for any business to succeed. Long-term success depends on the win-win-win scenario of profits as well as wider societal benefits.

 


Author: Ember Television

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This post was by an Ember Television guest blogger. For more content from our regular writers, and other guest blogs, check out our blogs below. https://twitter.com/EmberTelevision https://www.linkedin.com/company/1581465
Putting purpose before profit can pay off in the long run

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