Much has been written about ‘purpose beyond profits’ in a business, and why it works. Businesses prosper when they have a purpose.
Torben Rick said there were good reasons not to use profits as the primary business purpose.
Rick is an experienced senior executive at a strategic and operational level, with a track record in developing, driving and managing business improvement and development, change management and turn-around.
Among the reasons are:
PROFIT is an output and a symptom of success, not the cause;
PROFIT is temporary and can be wiped out in an instant;
IN tough times, profit can be hard to come by;
YOU need more purpose than profit to make it through;
PROFIT doesn’t motivate the salaried staff who make success happen;
CUSTOMERS don’t appreciate being seen just for their revenue; and,
CONSUMERS focus on values and contribution to society when choosing who to do business with.
Rick said profit might motivate senior executives, but it rarely did for those on the front line, unless they were shareholders.
“What motivates employees is feeling connected to a brand promise.
“Connecting people to a purpose is an important way of helping them feel good about the company.
“Why? Because there is a high correlation between the way employees feel about the company and the way customers do.”
Therefore, for a company to reach its purpose goal, it needs to plant that purpose into its strategy and operations.
A “purpose” is a powerful and effective tool because “it engages in a way that matters to a wide range of people across an organisation.
“And, it is neither dry, nor administrative”.
A purpose is universal in its appeal and it is relevant to the business.
It makes good sense that “businesses with a strong sense of purpose” are more successful.
Creating products or providing services that add value makes the world a better place.
Assoc Prof Dr Saunah Zainon
Deputy director of research, Industrial Linkages and Alumni, Johor UiTM