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Purpose is the New Profit

TypeThe Awakening of Business

by Iektje van Bolhuis, Austin, Texas

It might seem strange to write an article about enlightened society and business. In many ways the two seem to be contradictory. Indeed, many of the major problems we face in this dark age can be traced back to business. Yet, if we are going to create an enlightened society, including business in the equation is an absolute necessity. Business is an integral component of all of our lives. If our families and communities are the skeleton of society, the economy and business are the arteries and blood.

Just as creating enlightened society requires us to examine our own nature and recognize our basic goodness, so also must we examine the nature of business. For what is business but humanity’s attempt to care for each other and meet each other’s needs? In that sense business is also basically good. Business can become the vehicle and expression of enlightened society.

 

Heaven

The Sakyong writes in the Treatise on Enlightened Society:

A society founded on deep principles has the greatest potential for success. In an enlightened society, the acknowledgement and expression of basic goodness is the very basis for associating with others.” (p. 8)

Both the Sakyong and philosopher Charles Eisenstein describe a vision of what an economy based on the principle of basic goodness may look like. Eisenstein describes in his book Sacred Economics the principles of a gift economy. He explains how our current capitalist systems and institutions can evolve and transform to create an economic system based on generosity instead of greed. The Sakyong describes something similar in The Shambhala Principle, which he refers to as an economy of virtue:

When we each infuse society with our personal worthiness and richness, we see it flow in the form of ‘virtue economics’: The economy is the flow of virtue within society. … The economy will become a powerful display of virtue, and at the same time, it will foster virtue in the individual experience. That is how humanity’s inner treasure will become a richness that is shared by all.” (p. 166-167)

Author David Korten describes in his book The Great Turning a transformation of the top-down, globalized, strictly hierarchical oligarchy, which he refers to as “Empire,” to a more egalitarian, environmentally sustainable, locally oriented “Earth Community.”

Even in the business world there is talk of a “degrowth” or “steady state” economy and a move away from the notion that only a growing economy is a successful one. The depletion of natural resources and the Earth’s inability to continue to sustain humanity’s constant growth is becoming impossible to deny. We need to organize our economy in a different way to ensure the survival of life on our planet, and to allow everyone to live in peace, harmony, and abundance.

 

Earth

These visions of a more enlightened economic system are often very quickly dismissed as naïve utopian fantasies. It is often said that such ideals are simply not realistic and cannot work “in the real world.” The arguments against a more socially just, sustainable economic system are often rooted in assumptions about human nature and about the nature of business. These assumptions often go unquestioned. I now will discuss some of these assumptions, and whether they actually hold up to empirical scrutiny.

The first argument that is often used is that businesses in general, and corporations in particular, have a legal obligation to maximize profits, or “shareholder value” in the short term. It is said that corporations are only accountable to their shareholders. Therefore, corporations cannot work for environmental protection or solving major social problems. Dr. Lynn Stout, professor of corporate law at Cornell University argues, however, that this notion is false. She writes about this in her book The Shareholder Value Myth. She argues that not only does this idea have no legal basis; additionally, pursuing short-term profits has detrimental consequences for businesses and shareholders in the long-term.

The second argument that is often used, is that it is human nature to work only for one’s own self-interest and that people are only motivated by money. It is assumed that there is a linear relationship between money and happiness, and that therefore people are only interested in making more and more money. The relationship between money and happiness and money and motivation is a complicated one. Research in the fields of psychology, sociology, and economics suggests that money is related to motivation and happiness, but that there is a point of diminishing returns. People need enough financial resources to meet their basic needs for survival, and beyond that some level of comfort and freedom. When financial resources fall below this point, a lack of money is linked to lowered motivation and happiness. However, after this point is reached more money does not lead to greater happiness. Financial rewards and bonuses can actually undermine motivation. The greatest sources of intrinsic motivation are autonomy, mastery, and purpose. These three, and social connectedness are also among the greatest sources of happiness.

The third common argument is that business is by nature cutthroat and competitive. It is suggested that competition is necessary to make existing products and services better, to drive innovation, and to ensure that the “best and brightest float to the top.” However, upon closer examination it becomes clear that an overemphasis on competitiveness has the opposite effect. Instead of driving innovation competitiveness increases imitation. A competitive environment within the workplace is associated with a stressful work environment and disengaged employees. Such an environment does not invite dialogue but instead encourages people to keep a low profile. It pushes people into only looking out for their self-interests and it keeps them from sharing their ideas. It often fosters nasty office politics, bullying, and micromanagement. However, in a work environment that has a horizontal power structure and encourages collaboration, innovation and creativity flourish. Employees at such companies also report being more motivated and engaged.

 

Humanity

When one asks: “What is the purpose of business?” Often the immediate answer is: “Making money.” But does this answer really make sense? Of course, making money and making a profit is a necessary condition for business. After all, without profit a business cannot sustain itself. But is making a profit really the purpose of business? That would be like saying that the purpose of being alive is to breathe or eat. No matter what the actual product or service a business is selling, ultimately all business comes down to relationships. Businesses engage in all sorts of relationships: with customers, employees, the community in which the business operates, and with the environment.

The Sakyong defines society as a network of relationships and he points out that the key to enlightened society is within our relationships. This is the same for business. Because the essence of business is relationships, this is also the key to creating enlightened society in business. Instead of organizing business around the principle of short-term profit or shareholder value, business can organize itself around the principle of maximizing benefit within its relationships. Maximizing benefit then becomes the purpose of business.

There is an awakening happening within the business world in the form of a movement of people who are creating businesses that are socially just and environmentally sustainable. Out of Harvard Business School comes the idea of shared value and the notion that business is the key to solving major social and environmental problems. The CEO of Whole Foods wrote a book called Conscious Capitalism that talks about balancing the profit motive with the purpose motive, and caring for all stakeholders of a business, not just for shareholder value. Even large multinational corporations are now beginning to talk about their corporate social responsibility.

Perhaps the best example of joining heaven and earth is the B-Corporation (Benefit Corporation) movement. This is a network of businesses that is committed to the triple bottom line: community, environment, and finance. B-Corporations are examples of for-profit businesses that are committed to contributing to society in a positive way, by addressing social problems, protecting the environment, and treating their employees with kindness and dignity. It turns out that these businesses are more successful, stable, and prosperous—especially in the long-term—than businesses who are only focused on maximizing shareholder value in the short-term.

Elephant journal recently published a series of articles on creating enlightened society in business, with plenty of examples of businesses that are manifesting this emerging business paradigm. For more in-depth discussion of this topic, please see the links to these articles below.

If this paradigm shift in business can reach its full conclusion, it has the potential to transform many aspects of society: politics, education, the environment, and the lives of people all around the world. This could bring about the dawn of the New Golden Age.

May all beings benefit!

 

Is Business The Key To A Better World?

Relationship-Centered Business: A New Paradigm

Why The Profit-Centered Paradigm Doesn’t (Really) Work

How Money Makes Us Happy & Doesn’t

The Secret Recipe For Motivation

What’s Better Than Winning?

Do Corporations Have To Be Evil?

Business Summed Up In Two Words

Creating Enlightened Society In Business

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6 responses to “ Purpose is the New Profit ”
  1. Great article. More on this topic? Don’t miss out on this splendid RSA-animate: the empathic civilisation https://www.youtube.com/watch?v=l7AWnfFRc7g

  2. Nellie O'Reilly
    Dec 7, 2014
    Reply

    Enjoyed reading this article. As an elected official I am faced with considering and debating proposals for economic development that often times ignore the principles described above. Greed and the promise of jobs cloud our judgment. Governments are sometimes pressured to support developments that bring very little long term benefits simply because they create a few jobs. The broader question is guess would be how do we have an honest conversation about greed with those we represent when we live in a society where material possessions and status are idolized?

  3. This article is great for directing our attention and highlighting the questions we need to be asking in our business lives. I’d like to see more on how the boundaries of “self” interest get redefined, and what’s a healthy balance in economic boundaries.

  4. Shambhala is a business.

    Seriously, get a clue and stop pandering to the post-hippie Business Is Evil pretenders. Honesty is the best policy. Just be honest. Shambhala is a business.

  5. Thank you!

  6. Excellent article.


Sorry, comments for this entry are closed at this time.



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