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Purpose and Profit - Finding meaning in capitalism

I attended my regional CIPD AGM last night and I was privileged to hear Shakil Butt speak on the subject of purpose.  It was a broadly ranging presentation in which Shakil drew on his own experience to encourage us to seek purpose within our professional lives and gave us some suggestions towards helping others to do the same.

In the questions that followed, I challenged Shakil - who spent most of his HR career in the third sector - on how one can find meaningful purpose in an organization whose true purpose was to make money and I took it up with him again, afterwards.  And, great as his experience and perspective was, I don't feel that it was a question he had been forced to confront, professionally, before.

But for those of us working in the FMCG world, away from social enterprises, charities and the public sector, we have to confront the reality that our companies' true purpose, however else they might colour it, is the pursuit of profit.  Within the law and within the ethical and moral parameters the company has placed upon itself, the compass of capitalism points due money.  How, then, can we provide Purpose to our employees, ourselves and, indeed, our company?

It bears thought, first, to ask ourselves why purpose is important: not just to profit-making enterprises, but to any organization.  The value of a corporate purpose is that it's something people can rally around, get excited about and act as a guiding light such that, when in doubt, they can follow the purpose.  Which sounds lovely, but what we really mean by this, in any sector, is that we want something that will make our employees turn up in the morning, work hard, do their best and not try to screw us over.  Whatever noble trappings you place upon it, purpose is a tool for productivity.  Without a purpose, we are hamsters in a wheel, running like mad and going exactly nowhere.  But and enterprise with a purpose has a dual advantage, beause not only do you get the effect of this motivating binding principle; you also are actually doing the thing that moves you towards your purpose.

I recently visited a neighbouring business and was very impressed with the many certificates on the wall of the Reception area (no doubt, the whole point of them being there), but among them I spotted a mission statement.  And I was struck by several things about it.  It was quite wordy.  It was rather vague.  But, most striking of all, it made no reference to making money.

There seems to be an idea that a profit-making business can't say outright that its point is to make money.  I saw this idea in Shakil's presentation and his answers to my questions.  I encountered the same resistance, not long ago, when I spoke to my Board about setting out our own business plan.  "We can't" they complained to my suggestion, "just come out and have 'making profit' as our purpose!"

Yes, I argued, we can.  If we do it right.

If a profit-making organization pretends its purpose isn't to make money, it is lying to itself, its employees and its customers.  And the lie is obvious to anyone with half a brain.

But, at the same time, if a profit-making organization pretends that it has no other values or objectives other than making money, it is also - more often than not - lying to itself.  Any organization that chooses to operate publicly and within the confines of the law by definition, isn't prepared to do anything for money.  Because otherwise it would be a criminal organization.  It pre-assumes that there are legal limits on its actions.  And most organizations, consciously or unconsciously, have values more restrictive than mere law that they operate within.  It helps to articulate these, of course.

What that means is that there is good profit and bad profit.  How you define that will vary from company to company, but here's the thing: your employees want their company to make good profit.  Your employees like to see their company do well.  They like to know they belong to something growing and successful and profitable, even if the actual outputs of the company do little to increase the overall wellbeing of humanity at large.  Good income comes from selling products and/or services that people want, at a price that's fair.  Good expenditure comes from paying competitive salaries and giving good benefits to dedicated workers who feel valued and recognized for their contributions.  If your good income is greater than your good expenditure, then you're making good profits.

Capitalism isn't inherently bad.  It is bad when the regulatory framework and actions of its participants lead it to exploit its resources: when it sells bad products at inflated prices and underpays its under-appreciated and unrecognized workers.  Those are bad profits.  It is bad when it allows itself to damage the environment, manipulate politics and do harm to others.

The vast majority of humans - the ones who aren't psychopaths, and even some of those - don't want to see companies go bust or people lose their jobs or communities fall apart.  Profit is the cohesive element that pulls these things together, and good profit is the strongest glue.

So if you're working in a profit-making organization, dedicated to making profit, don't feel that your employment lacks purpose.  Profit - good profit - is a noble purpose, regardless of whether you're actively engaged in work to make the world better or not.

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  • Hi Robey

    I'm very glad you posted this.

    This is something I have thought about a lot, having worked in the private sector - 10+ of those years in the FTse 100 - and the 3rd sector, and within the 3rd sector I have experience of working in a charity but also in social enterprises and B Corps. I'm at work and can't come back with anything particularly meaningful now but I will try and make time later.

    In the meantime, I hope other people will chip in.

    Purposeful work is something we will all have views on on whether we are just starting out or are looking back over long careers.

    In fact, have I read that millennials are more likely than previous generations to look for meaning in their work?
  • Excellent post Robey!

    During my working life in major multinationals (Costain, Total, Eurotunnel, SUEZ....) I have  renconciled my thoughts by rephrasing the question into "meaning for whom?".

    Investors and shareholders are clearly interested primarily in a return on their investment - after all, that is why they have bought part of the company and expect to receive their share of the profits in the form of dividends. I say primarily, because the decision to invest often goes beyond a simple question of short-term returns. Many organisations are in business models where returns are 5-10 years down the line - a power station takes 10 years to break even, and I won't even talk about the Channel Tunnel....... Nonetheless people and investment funds choose to invest in these areas, despite them not being a "guaranteed fast buck". Sure, having a balanced portfolio helps to even out risks, but many investors today (and senior managers) have a genuine belief in their areas of operation, and are prepared to take business risks to bring something to their end customers. 

    Senior Managers often have a remarkably strong commitment to the development of the sector in which they work. For instance  was tremendously proud to work with Eurotunnel from start-up to the end of the century, and am convinced that the business ethic was "we are there to make money in this particular area in which we strongly believe" Over the last 20 years I've been proud to have worked in a company that, outside of "Western Europe" dedicated its investments to "bringing the essentials of life" (safe water, a clean environment, and electricity for schools, hospitals etc) in countries where these basic facilities were either absent or seriously under-developed. 

    Ultimately, I agree with your concept of good or bad profit that you raise. It's entirely legitimate for private enterprise to invest with a view to make money, and what is then important is how it goes about doing it. Having said that, there are some sectors that work with painfully narrow margins but are faced with customers that are not prepared to pay more for the service, with an indirect consequence of poor wages and conditions for those who work in these companies. This is the hardest part of the equation for me - paying more puts you out of business, and every employee ends up out off work through "good intentions"

  • Very good post, Robey.

    I have worked in the private sector all my working life (a long time!!) and I have always taken the view that every single employee is either in post to make profit, or is serving someone who is making profit.

    My Chairman, a man I admire greatly, once said to me "Bob, some money isn't worth having". Sums up the ethos of a good capitalist for me.
  • A very thoughtful post Robey
    From the day I gave up scaffolding I've enjoyed working and always felt I had a meaningful purpose - to help the organisation achieve its goals. And i got paid.
  • I don't know if there is such a thing as " post of the year " award that runs alongside the caption competitions...if there is, this post has to be a prime contender.
  • Really interesting post. Coming from the 'other side' (someone who has worked most of her life in the third sector), the mission/vision/values are clearly things that the organisations I've worked for have spent a lot of time pondering, and so have I. The excellent TED talk by Simon Sinek (Start With Why) and his book (a much longer way of saying the same thing) are good at showing how it's not just organisations that have a charitable aim or focus can have an overarching mission to do something that the business can get behind. Making the best drill bits must help workers the world over to make high quality homes or create safe working environments as well as making shareholders happy. The mission to make the most drill bits in the world isn't something that would inspire your team, but the context of quality, safety and of the ultimate outcome might.

    The other reflection I'd have is that goals around money are as relevant to charities as they are to businesses. We all have staff to pay, and payrises and pensions that can't happen if we don't get that money in. I'd say that the third sector are more reticent than they should be about being clear on that score too - that a good organisational structure, and motivated and happy workforce, depend upon people that have living wages, security and opportunities to progress - all of which costs money. In fundraising in my last organisation, that was almost a message that had to be hidden - the 'oncosts' of work being almost impossible to fundraise for directly, because who wants to donate money to a charity that's going to pay for the back office team: with a few notable trust exceptions, most donors want to give to projects or front line work that they see as making the real difference.
  • Hi Robey
    Thank you for this post.
    You are absolutely right about good and bad profits.
    I’d like to add that the essence boils down to ethical business practices and keeping to the line of Ethics helps create that sense of meaningful purpose to our professional interests.
    Cheers
    Reena