Most businesses have a deep and abiding love affair with profit. They measure it, report on it, build strategies to maximize it and make decisions about hiring, firing, launching and staunching with profit as their guidepost.
Profit is critical, of course, but it's overrated as the true measure of business success. Stay with me here and open your mind to the role purpose can play in guiding strategy.
When asked what drives business decisions, people cite growth targets, greed, wealth and the personal ambitions of business leaders. None of these things make us feel particularly good about business, which explains why trust in business remains pretty low.
While profit is a necessary ingredient for business success, four-in-five respondents in a recent survey want to see that profit combined with a higher purpose, according to the 2015 Edelman Global Trust Barometer. (Note: Edelman is my employer.) These individuals share a desire for business to play a role in improving people's lives and making the world a better place. This is a wish for business, but a significant performance gap exists against these measures of success. Only a mere 24 percent of the global public believes business is driven by an ambition to make the world a better place.
Companies today spend too much time talking internally about profit and externally about products. Consumers, however, aren't motivated by what a company produces. We expect companies to make good stuff and deliver good service. What also matters is that companies treat their employees well. They work to protect the environment. They employ ethical business practices and they're transparent about what they do and how they do it.
But even more important than how a company operates is why it exists in the first place. When asked that question, far too many business people answer by reverting to familiar business speak, such as "to deliver returns to our shareowners" or "to sell more (insert specific stuff)."
This dog no longer hunts. People expect companies to possess a purpose beyond profits. And it is this purpose, when articulated and placed at the center of a brand experience that builds trust and establishes connections that keep a business relevant.
Look at it another way. For decades, marketers have focused on satisfying two critical basic needs with their brand propositions. The first is a basic need for rationality and the second is an emotional need. I contend that a third is evolving: a societal need.
When a brand or company demonstrates that it is improving lives and impacting society positively, purchase intent increases as does a willingness to defend the brand and a desire to share information about it. It's a brand-building trifecta.
This is why campaigns like IBM's Smarter Planet (making institutions more productive, efficient and responsive) and Chipotle's Food with Integrity (serving the best sustainably raised food) resonate. It's also why noteworthy decisions to stop selling tobacco products (CVS) and raise minimum hourly pay (GAP) provide a trust and reputational halo for those companies.
There's another less publicly focused but equally important initiative as well -- employee engagement. Take HP's decision to center its turnaround on its employees and showcase how its technologies make a difference to people around the world. This focus on building a purpose-based culture with employees at the center proves to be a powerful tool for recruitment -- and a measurable way to improve employee satisfaction, loyalty and, even, productivity.
So, when speaking about profits, take a moment to talk also about purpose.