By Jim Clemmer
"An organization without human commitment is like a person without a soul: Skeleton, flesh, and blood may be able to consume and to excrete, but there is no life force." — Henry Mintzberg, management professor and author
If the main reason for a company's existence is profit, it is often not very profitable. When a company is fixated with the bottomline, there's a good chance it won't survive. The dollar sign isn't a cause. It doesn't stir the soul. Operating margins and return on investment don't excite and inspire. As an ultimate objective on its own, the pursuit of profits is hollow and unsatisfying. It is one-dimensional, without depth. It comes from, and leads to, the naked selfishness of "what's in it for me."
Few people today want to buy from, work for, or partner with, a company that's only out for itself. For example, I can't imagine sitting down with my team, producing a set of elaborate architectural drawings for a huge, luxurious dream home, and saying, "If you all work really hard, someday this will be mine."
In his book The Hungry Spirit: Beyond Capitalism – A Quest for Purpose in the Modern World, Charles Handy writes, "The late David Packard, co-founder and inspiration of Hewlett Packard, one of the world's most respected international businesses, put it this way, shortly before he died: 'Why are we here? I think many people assume, wrongly, that a company exists solely to make money. Money is an important part of a company's existence, if the company is any good. But a result is not a cause. We have to go deeper and find the real reason for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company, so that they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society, a phrase which sounds trite but is fundamental'."
Writing in Fortune magazine, Geoffrey Colvin notes, "One trend in business is that employees, especially young employees, want a sense of purpose in their work. We all want a sense of purpose in our lives, but in the past we didn't demand it from our jobs. Now workers increasingly do. They want to know that what they do at work is good and right in some large sense."
Of course, if a company isn't profitable and financially strong, it won't exist long enough to serve any other purpose. That's the paradox to be managed: Companies that exist only to produce a profit don't last long, while companies that don't pay attention to profits can't exist to fulfill their long-term purpose. I call this the Profit Paradox. The key is to find the right middle ground, because pursuing profits without a higher purpose, or pursuing a purpose without profit, are equally fatal strategies.
Studies of the role and impact of values or ethics on corporate performance show that profits follow from worthy and useful purposes. Fulfilling the purpose comes first, and then the profits follow. Profits are a reward. The size of our reward depends on the value of the service we've given others. Developing a purpose that's aimed at serving others adds a richer sense of meaning to our lives. It taps into the deep craving we all have to make a difference. We need to feel that the world was in some way a little bit better off for the brief time we passed through it.