Why Your Business’s Purpose Should Be More Than Making Money

Most companies are focused squarely on the extrinsic motivation of making a profit to expand their operations and satisfy their shareholders. Today, however, we are witnessing a shift toward a more intrinsic motivation for both companies and their employees. Once united merely by their commitment to providing value for their companies and their customers, they are now united in being of value to society.

The shift toward business models that embrace social responsibility raises questions about how financially sustainable it is to dedicate resources and employee energy to doing good in the world. Some may argue that such efforts are best left to individuals, not businesses. 

But more and more, consumers expect the businesses they buy from to benefit society and the planet. Businesses are finding that embracing this model has many advantages, including financial ones.  

The history of social responsibility in business

Henry Ford famously said, “A business that makes nothing but money is a poor business.” Staunch in his belief in paying workers a respectable wage and in hiring women, people of color, and individuals with disabilities for high-paying jobs when doing so was not an accepted practice, he virtually created the American middle class. We can safely say that he succeeded in embodying his statement. Edwin Francis Gay, a contemporary of Ford’s and the first dean of Harvard Business School, expressed the same view, claiming that the purpose of business was to “make a decent profit, decently.” 

At the dawn of the 20th century, this was a unique belief for a business leader to hold. Most owners of large companies at the time—and for decades afterward—had views more aligned with that of economist Milton Friedman: “The business of business is business.” By this, he meant that anything beyond making a profit was… none of their business. 

“We have gotten used to treating one another as a means to our vested interests, thereby plaguing the very essential humanitarian value of mutual ethics, respect, love, and compassion. Profit too becomes a mirage of answers that illusions us into believing that our depravity of worth will be fulfilled by it. In a world that is increasingly being gripped by existentialist dilemmas, we must, as a human race, strive to rethink our individual and collective ends, and find one another’s way back into those ends.”

— Urvashi Singh Khimsar 

In the 21st century, however, a significant shift has occurred in the way companies view their role in society. To the extent that focusing solely on making money is now seen as bad for business. Because today’s customers tend to show greater loyalty to companies that do good in society. So, the most qualified and promising employees are flocking to work for those same businesses. Companies are waking up to the value of doing more. 

In 2013, India became the first country in the world to require corporate social responsibility. The following year, the European Union began demanding that companies produce annual reports on their social and environmental impacts. Although the United States imposes no such requirements, its businesses are eager and willing to be transparent about their contributions to sustainability and a stable society. 

In 2019, 181 CEOs of some of the world’s wealthiest companies, including Apple, Amazon, and Citigroup, signed a document declaring their intention to work for the benefit not just of shareholders, but also of customers, employees, and the society that is the source of their prosperity.

How to approach social responsibility in business

The stress created by the recent COVID-19 pandemic has brought into even sharper focus companies’ need to view themselves as participants in society. Hastening what was already a tidal wave of socially oriented change. Increasingly, businesses today realize that the key to longevity and long-term profitability lies in making humanity and purpose central tenets of their operations.

Begin with leadership

Studies have proven that a company’s success at generating profit depends largely on the energy and engagement of its employees. So obsessing over revenue rather than investing in a happy and productive work culture is actually a false economy. Leaders who want to increase employee engagement must understand that they themselves set the tone for their company’s energy. 

One study that surveyed 520 businesses in 17 countries found that employees are relatively less open to making sacrifices for their firm when their CEO’s sole focus is maximizing profits. Conversely, employees who feel that their work has a deeper purpose are happy to give 100% of their effort to the company and its customers. 

Despite the culture-building efforts involved, leaders who frame profit as an outcome rather than a goal see simultaneous increases in revenue and employee satisfaction—a win-win scenario that leads to a better quality of life for everyone.

A shared passion for social good boosts profitability

A good example of this kind of purpose-fueled outcome involves American Standard. A manufacturer of toilets and other plumbing-related products, which launched the campaign Flush for Good in partnership with the Bill & Melinda Gates Foundation in 2013. The campaign’s mission was to stop the spread of disease and thereby save lives in the developing world by donating sanitation equipment every time a Champion brand toilet was sold.

For a company that produces an arguably humble product, the impact the initiative subsequently had on its employees and the world’s poor was dramatic. American Standard ultimately increased its earnings fourfold while simultaneously reviving its previously floundering employee engagement levels and optimism. 

When the initiative was first announced in an all-hands meeting, employees gave the company’s CEO a standing ovation. That kind of purpose makes good companies great—and great to work for.

Your company’s product or service might not be capable of changing the world in quite the same way that American Standard’s did. However, having a team that is united by a commitment to doing the right thing can engender a fulfilling “culture of purpose.” This enriches the employee experience, the customer experience, and the company’s bottom line, all at once, even if the shared goal is simply making customers’ lives a little better every day. 

Today’s customer is socially conscious and expects respect

One thing to keep in mind is that your company’s contribution to social good can align with profitability. Customers are passionate about supporting companies that have a clearly communicated social mission. 

A number of studies support the notion that today’s consumers are willing to pay prices that are 50% higher—if not more—for sustainable goods. In addition, a vast majority of millennial consumers are willing to prioritize brands that are associated with a social or environmental cause. 

Complementing that trend is the fact that customers—again, millennials in particular—are raising the bar for the quality of service and care they expect from the businesses they patronize. People know intuitively when they are being treated as mere revenue targets, and today’s consumers are emphatic about being treated like human beings. 

An abundance of statistics proves that companies that put their customers first are more successful than others. One of the most significant findings is that businesses that offer a superior customer experience earn 5.7 times more than those that do not. This is yet more proof that focusing on profit is, strangely, not profitable. Customers are your business’s lifeline, and disregarding their needs and feelings could cause them to disappear into thin air, taking your profits with them.

Corporate social responsibility is important for your company’s future

All evidence indicates that by creating an enduring social legacy that employees can rally around, companies benefit on all fronts. Retaining the most talented and motivated workforce, earning customer loyalty, strengthening the communities in which they operate, and of course, generating revenue. So how will your organization do some good?

If your business doesn’t already have a designated cause, an excellent idea is to involve your employees in the search for one. To invest your team in deciding what your company should stand for, set up task forces to identify where your efforts are most needed. Ending poverty? Fighting racism? Protecting the environment? 

The issue or cause your organization is best positioned to support largely depends on the kind of product or service you offer and/or on the community you serve or operate within.

Companies can create many types of programs to give their employees a shared sense of purpose and the fulfillment that comes from doing good. Philanthropic programs such as annual donation drives, volunteer initiatives, and even product donations are all useful methods to create cultures of purpose, happiness, and belonging. 

Develop a framework for social responsibility

To make doing good the norm, a business’s leadership must give its workforce a framework for participating in social and environmental initiatives and should consistently celebrate its employees’ achievements. The result will be a much stronger organization in the long run.