“Everything in moderation” is one of those sayings that always pops up when someone shares a story of excess – drinking too much on a night out, eating too much over the weekend, skipping the gym last week, working too much etc. This is because we all know that in order to lead a long and balanced life we need to do things in moderation otherwise everything becomes misaligned and out of shape. Why then do we forget this notion in business?
You see time and again businesses and the employees within them pursuing ever larger and continuous growth, but in a world with finite resources surely this constant growth cannot be sustainable? And herein lies the problem with the current capitalistic approach to business, which is to grow profit at all costs. In order to keep profits rising they exploit more of the earth’s resources, increase the productivity of their workforce by making them do more for less and constantly keep squeezing all other resources to extract every last drop of profit. This continues until ‘BANG!’, the system implodes on itself as it cannot be sustained. This can be because all the resources have been used up, employees have rebelled as they have gone past the point of breaking, which in its mildest form is to go on strike and a more extreme form is to have violent protests or simply because the current system forces people to innovate and create a new system that is sustainable (creative destruction). This is why very few companies that were huge successes in the past exist today in the same form as they keep squeezing resources for short-term profits until the inevitable happens. The only ones that do remain are those that have had significant state intervention to prop them up e.g. the American car industry.
What we all need to do is change the root behaviours and systems that are fuelling this destructive cycle. As consumers, employees and business leaders we have the ability to make concerted changes to solve this problem. My answer is to adopt Profit With A Purpose as the core business model. Here businesses make decisions based on the 3 P’s of Profit With A Purpose: Profit, People and the Planet, ensuring the choices they make consider all three and do not achieve one at the detriment of another. Here the pursuit of profit over anything else is removed as a core business behaviour, opting instead to use some of the profits gained to invest into the local community, education programmes, employee well being and innovating to reduce the impact on the environment. With this approach resources are supplemented, expanded or enriched through the act of business instead of being diminished, making it a much more sustainable approach to business and long-term success.
Profit With A Purpose is a mindset change for business leaders and allows business to be the engine of any modern and well functioning society. It is all about bringing this sense of moderation to business just as we should in our lives in general. Through businesses changing their mindset and opting to redistribute their accumulated wealth (profit) rather than seeking to continually grow it, they can start to invest in projects that would benefit society as a whole giving the business a renewed sense of purpose than just making money. Ironically this approach will make more profit in the longer term as it is a more sustained growth but over a longer period of time rather than the short cycles of boom and bust business favour today.
To give you an example of where some of this thinking is being adopted is Google X, a special projects arm of Google. Here Google is using some of its profits made in its core search business to fund ‘moonshot’ projects i.e. projects that are so way off and far fetched they seem impossible, such as the autonomous car and contact lenses that can monitor your health, which after many failed attempts are starting to show signs of fruition. Paypal’s co-founder Elon Musk also demonstrates a level of moderation in his approach to business yet is still hugely successful. He used funds and influence gained from building up Paypal to start up Tesla that has revolutionised not only the electric car market but electricity generation and storage. He has also set up Space X to make space travel accessible to the masses as well as putting his support and financial backing into a new rail infrastructure project to build a train network that travels at 500mph, which in the past would have been a project only considered by governments. All of his new ventures have and will have a tremendous impact on society as a whole but are great examples of where these businesses have sacrificed maximising their short-term profit margins to invest is solving much larger societal problems that will pay back significantly in the long-term, not only financially but socially and environmentally too.
I implore any business leaders and employees reading this to see what you can do to achieve moderation within your business practices as well as your life in general. Ask yourself what small changes could you make so that your business is making Profit with a Purpose?