Tuesday, May 30, 2017

Profits Only? Business Purpose-for-others (telos) and need for a third indicator of Success.

profits purpose-for-all people
Many companies today focus on profits as if that is the key indicator of the corporation's success. Profits are important--it shows that the company is a viable company, the leadership is competent, the business is stable and sustainable, and so forth. This is necessary to attract capital to gain more investors and for further and future growth of the company. But profits alone do not demonstrate the complete picture when we're talking about the "health" of the company today and for the future.  

A secondary indicator these days is around social impact and environmental responsibility of the business. Investors want to know, for example, the footprint and impact of the company on the environment and society as a whole.  Chris Houston in his Ebook "For Goodness' Sake: Business for telos" discusses the importance of the purpose of the business.   Houston clarifies that "society is not asking for the business case for purpose.  What society is in fact demanding to see is the purpose case for business." (39)  Houston argues that "we need businesses that relentlessly deliver on a telos to serve others." (43) Telos being: 

A Greek word meaning "intended end." Applied by Aristotle to humans, telos implies a life of virtue, lived for the good of others. Telos has an inherent benevolence and a predisposition towards the common good. It is most precisely defined as a purpose-for-others. Every telos is a purpose, but only the rare purpose is a telos. (44)

For the business to formulate and live out its telos "involves the reformulation or clarification of the very identity of the organization and its primary reason to exist." (45) Customers want to know that you care about society and them as a customer. Yes, positive social impact is indeed important and serving others (its purpose-for-others) is of utmost importance.  It's important that everyone in the company understands and owns the purpose (telos) of the business and brand.  

I want to propose a third indicator of importance that can better the long-term success of a company that demonstrates the true "health" of the business and it relates to its people.  Houston does touch on it, but I want to call it out more explicitly.

Over the past years, employee engagement sits around 30% engaged, with the remaining 70% disengaged or actively sabotaging the company (20%?). That's 3 out of 10 employees that are actually engaged in their work.  (Cf. Gallup)

A company can be making money and even have a compelling purpose; however, if a company's employees are not engaged in their work--is it truly a viable company?  My challenge to today's business leaders is to publicly publish your quarterly/annual earnings with your employee engagement survey results. Yes, show your profits and let the world see how engaged your employees are.  I have a feeling that doing so probably scares leadership more than how much money they not making.  I believe transparency and openness will build greater trust with your employees, customers, as well as investors--real investors.   It demonstrates publicly what you value as a leader, how you are making a difference in the lives of the people that work in your company, how you are investing and caring for your employees, and what you're doing to make your company the best place to work. More, it shows that you can be trusted, you are accountable as a leader inside and outside the company, you are willing to listen, and you're not afraid to admit failure. Measuring and disclosing the company's employee engagement helps leaders understand whether employees are in fact aligned and living out the business purpose-telos, be transparent with the challenges, and work towards creating a plan for how to resolve those challenges.  Furthermore, doing so will demonstrate character, vulnerability and humility--again, trust and whether you can be trusted as a brand and business will be a key competitive differentiator in today and future markets.  

When businesses focus solely on profits (and sadly, many companies still do), a company will unfortunately rot from the inside.  A company that focuses solely on profits will become irrelevant and also loose the customer's interest. To regain momentum towards a more healthy business will be a insurmountable task at that point.  I hope leaders have the courage to be different-different where both profits, purpose and people are top priorities and focus.   Essentially, investors and customers want to know about your product as well as its profits, its telos, and the people behind the brand.  When you focus on these three factors, profits will come and continue come--I believe it. More importantly, employees will be more engaged (and with more joy) and passionate with what they do because you genuinely care about them as persons--they will champion the company and work to delight customers. Moreover, when profits, purpose and people are valued and aligned, people in and outside the company will want to invest in your company. 

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