Adam Lowry, Alinsky, Be Evil, Big Kahuna Burger, Corporation Tax, Cultural, Duh!, Economic, Environmental, Firms of Endearment, Inc magazine, Infectious Feelgood, Kevin O"Leary, Natural Capital, Passion, purpose, Resilience Strategies, Rules For Radicals, Social, Social Responsibility, Tax Evasion
Headline: Go ahead. Be Evil.
Sub head: Do you need a social mission? Hell, no. Profit is the mission
How weird. If Inc’s leader piece in its March issue is anything to go by one might think that the jury is still out in business-land about whether profit is the only fundamental Purpose or Mission you need.
I’m thinking that perhaps they were just looking for a headline. And for that you need the polarities. A publisher’s master-class in the application of Alinsky’s Rules For Radicals perhaps. Remove the grey. Black or White. or nothing. Set Kevin O’Leary’s profit purpose against Adam Lowry’s social purpose; light blue touch-paper and see what happens. O’Leary’s blue collar good fella folksy says it the way it is ‘honesty’ versus Lowry’s campus cool, organic jaw-lined post-grad Karmic intensity.
Celebrity Purpose Smack-down. Hoo-haa.
Sadly, post reading, it all felt a little disappointing. I was expecting something incendiary. Perhaps I missed the point. To be fair I thought we’d got beyond this a while back.
Purpose is about founding and rooting a business in something beyond the balance sheet and the share price – creating a north star for it that reaches beyond the pure objective of profit. Its not about Profit OR Purpose. Double Duh! Its simply about developing a healthy and respectful relationship between the two.
Purpose is about developing resilience in a business both in social, cultural and environmental terms as well as economic ones.
Purpose is about passion, determination and belief at work in a company for good – the infectious feel-good of making shit happen both individually and collectively – and the nurturing of a centre of gravity that enables a company to absorb turbulence and short term impacts.
Purpose (social or otherwise) can have a simple premise – for example – to want to build a thriving profitable and resilient business able to relentlessly reinvest in stimulating and securing increasing and sustainable growth to create wealth, jobs and ever-improving communities is an admirable purpose.
The lever word in this is resilient. And resilience comes from not overdrawing or pillaging the sources of capital a business needs and demands to be profitable.
A company’s Social, Cultural and Environmental Capital accounts need to be as healthy as the Economic ones.
A balanced book should show the positive impact column of the business in credit even after you’ve accounted for everything in the negatives impacts column . And Purposeful businesses seem to be far better in achieving this balance.
This is nothing to do with setting up a charitable book on the business. If water depletion or obesity are negative externalities of your chosen business then you need to account for and invest in mitigating them – reductions, off sets, replenishment and prevention programmes become critical and central to your profitability accounting processes. To ignore them is to foster vulnerabilities and turbulence in the fabric of the company and in its ability to thrive.
Any ‘shareholder’ who compels or lobbies a company to ignore the business case for Purpose and the behaviours and actions pursuing it demands is in effect trying to short the company. Between lengthening a business’s odds through the relentless and passionate application of Purpose or shortening them by sustaining a myopic obsession with Pure profit, I know which one I find more ‘evil’.
Why Mr. O’Leary thinks that purposeful companies are missing the point of a business – to be profitable – I am not certain.
A quick rummage in Firms Of Endearment’s most recent stats show that companies driven by purpose and passion outperform the S&P 500 by 14 times over 15 years.
To be clear, I think we’re getting there but still have a way to go. I am certainly not advocating that every company featured on Firms of Endearment’s list of big purpose Kahuna Burgers is some scion of the Gods of Good.
A number of multi-nationals who like to be seen a Purpose driven with a clear sense of the power of Stakeholder over Shareholder modelling still seem to find a way of rationalizing very shifty profit accounting to evade stonking levels of Tax. A number of them sit on Firm’s of Endearments list of the great and the good.
How do they reconcile Endearment with almost criminal levels of tax evasion I am unsure.
Perhaps they’re a little tied up with other things at the moment.
Perhaps they just don’t agree with the simple theory that if your business’s performance, competitive advantage and increasing profitability is rooted in the quality and wellbeing of the indigenous workforce you employ, you should invest in the fiscal infrastructure of the society that creates that workforce – keeps them healthy, safe, secure and living in a stable thriving society. It’s called Corporation Tax.
Or perhaps it’s just that they are too busy passionately pursuing the intelligent, enlightened and relentless re-direction of profits for the purpose of executive redistribution.
or perhaps they’re just Evil!
(cue high fives, whoop de dooping and general chest bump, you d’Man-ing.)