Dirty secret: I’ve never been outside the USA. Until today.
I’m traveling to Canada to visit Chad’s family. It’s actually quite exciting, and I hear British Columbia is rather beautiful. I’m armed with my fancy *electronic* passport and my carry-on.
Here’s hoping my steward(ess) doesn’t bail on me pre-flight.
The sole purpose of a business is not to make money.
Hopefully I just struck a couple old CFOs dead with that statement. Enjoy the Fourth Circle*!
Notice that I said sole purpose – in truth, business never has one sole purpose, but many purposes. It’s the unfortunate reality that most business owners focus solely on profit. I’ve worked in small businesses before, and it’s usually the same line: sales and marketing are the darling departments, with the product development house a close second, and other departments and functions regarded like an appendix: they’re part of the structure, but no one really knows what they do, and people believe they’d be better off without it (*ahem* HR).
My point is thus, and to be fair, it isn’t anything new: profits are a means to an end. To exactly what end, however, is where I disagree with so many. Good business, in my opinion, is predicated not only profit, but employees and social responsibility. Think about it: we treat businesses like real people. They have legal rights and responsibilities, can defend itself in court, and so on. So why does the maxim “business is business” continue, when the stark reality is “business is people”?
Taking this metaphor a bit further, like any person a business can do a lot of bad to itself and still manage to function. A business with a C-Suite at the helm that’s concerned blindly on the balance sheet is like the fat person eating McDonald’s everyday: unhealthy, counter-productive, and ultimately, it’ll kill you. You need a balanced diet. And let’s think a bit further on this. We read countless articles on how we must give back to others, to our communities, and that through giving we get back more. And yet, so many businesses do not do this, usually in the holy name of the “bottom line” (piecemeal be upon it).
I firmly believe that a good business is built on three things: profit, reinvestment in employees, and reinvestment in the community. Profit’s a no-brainer: have a solid product and appropriate strategies to sell it. Then re-invest that profit into your employees. No, I’m not talking about expanding the marketing department to drive the sales engine; that’s reinvestment in the organization. Reinvesting in employees is giving your staff the opportunity to develop, either by providing training for new skills, wellness programs – anything that will increase employee engagement and trust. Reinvesting in the organization is ultimately a part of reinvesting in your employees, because you’re increasing the amount of organizational resources available to your employees.
Social responsibility, or reinvesting in the community, is the business giving back to the community in which it resides. A lot of companies have charities they donate to, and I advocate that the charities and causes be local to the business. Being an active philanthropist as a business helps build community trust, and when the community trusts your business, the community will in turn invest in the business by purchasing those services and products.
The key to building a business isn’t just in the product and the price it’s sold for. A good business knows its greatest assets are its employees, and its best supporters are the community around it.
* The Fourth Circle is a reference to Dante’s Inferno, where the greedy were consigned to their punishment.
