Why ANY Business Should Prioritize Purpose Over Profit
We often get asked why companies should prioritize purpose over profit. The answer is pretty f*cking simple.
Because it's the right thing to do. That's why.
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Just added a comment to recent article covering Spotify that fits also nicely to the question: purpose over profit? For context, Spotify currently pays artists $0.0038 per stream, which as UMAW (The Union of Musicians and Allied Workers) notes, would necessitate over 700 streams for an artist to afford one cup of coffee.
Yes but why? Yours is a kind of tautological sentence and moreover, seems to be on the ethic stage.
How should I explain that in a, for example, private equity fund owned company saying just “it is the right thing to do”? If I might stress a bit the concept, you should be more epideictic and less apodictic
Leaders who recognise the criticality for society of business being purpose led must put profit and purpose on an equal footing. The evidence suggests that if run well purpose led businesses generate greater longer term shareholder value. Purpose will therefore spread faster and with deeper roots if not only is there an ethical polemic but also if it out-competes short term shareholder driven companies. If we want to change the world, not just virtue signal, then we must focus on delivering profit with purpose. As Dennis Bakke said “Profits are to business as breathing is to life. Breathing is essential to life, but is not the purpose for living. Similarly, profits are essential for the existence of the corporation, but they are not the reason for its existence”.
If we could tag one apocalyptic rider for adaptive organizations, it would be "traditional performance management." It is old-fashioned performance management that keeps us in a world of humans as resources, as command-and-control takers, with rigid top-down planning, and solid prevention of curious and exploratively-minded cooperation. Its logic is plan – do – check – act.