Profit or Purpose, can we have Both? – the world after Milton Friedman

meaning of lifeThis is how Milton Friedman started his article in The New York Times Magazine, on September 13, 1970. “When I hear businessmen speak eloquently about the “social responsibilities of business in a free-enterprise system,” … The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. … Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.” These thoughts have been shaping corporate America and the rest of the world and have been an influential force in how management education is approached around the world. We all know, where did this kind of thinking got us. The assumption that companies can exist in a vacuum and their actions do not effect the rest of the system we live in, is just wrongThe idea that the leaders and managers should look after the profits only and someone else will take care of the social responsibilities is naïve, to say the least. The financial crisis was a moment of possible wake-up but it was quickly subdued and corporations went back to their original practices as the the business sector (and the governments) visibly failed to take any strong (legislative) actions to prevent another crisis from arising.

Once, I was working with the top management team of a multinational company and we were discussing their drivers, why they were working. One of the top executives whose entire management team was also there, admitted to be doing the job for the money only. The workshop’s declared goal was to work on the Vision and Mission of the company and this team… Everybody froze as it was hardly an inspiration for the others and no authentic work was possible from this point on. Somebody else said he did not have “such a purpose or reason” and quickly asked “Is that a problem?”. For long years now, I have been teaching people what I deeply believe myself that living without purpose, is like flying a plane blindfolded which typically ends badly.

Does the business sector have a conscience, are business players interested in what is going to happen to the world, our environment and communities? Although we like to talk about the economy and the market as abstract concepts, in reality it is the leaders and people in the companies, not the economy that have some kind of orientation or conscience. The world was reminded by a psychologist, Viktor Frankl, back in 1945 that one cannot live a healthy life without finding meaning for life but once people find it, they can survive even the worst sufferings like the Holocaust. Based on my experience as a manager and psychologist, I have long believed this to be true for the economy as well. Nevertheless, it had almost been 60 years before research clearly declared that purpose-oriented employees, companies and entrepreneurs perform and thrive better. 

Based on a survey published last November in the USA by Imperative, employees can be easily classified into two categories. There are employees for whom work is only about money and personal status and they are non-purpose oriented. And there are employees who also see work as a way to empower others, create value and find personal fulfilment, in other words they are purpose-oriented. This is a principal motivational style, attitude, independent from the level of one’s position. It is strongly affected by the family. Though I do not view this orientation as something unchangeable, I was very happy to see such proof for my own experience at organizational development. Purpose-oriented employees perform much better contributing to better prospects to become leaders, to remain with the company for a long time, to have better relations with their colleagues all of which drive higher engagement.

The Next-Generation Entrepreneur is the man of the future. A recent study finds that 70% of the employees around the world look very carefully at the environmental and social impacts of a business before choosing to work for that company. Also, 58% of Generation Y employees would agree to work for a salary lower by 15% if the company’s values were in harmony with theirs. And by 2025, Generation Y employees will contribute 75% of the world’s total workforce. Research also proves the the Next Generation Entrepreneurs look for a combination of purpose and clear identity. These entrepreneurs define themselves as explorers, catalysts, networkers and co-creators reflecting the importance of change and creativity. They are purpose-oriented; this drives their enthusiasm and high energy. Interestingly, they have a lot in common with Generation Y in this respect; value orientation is typical for both of these groups.

A number of well-known businessmen have shared their thoughts about this. Richard Branson said: “Taking on massive, seemingly impossible challenges while wanting to live a full life…” Elon Musk thinks “we should aspire to increase the scope and scale of human consciousness in order to better understand what questions to ask and to achieve greater collective enlightenment”.

With Robert B. Dilts, we have been working on a methodology to allow leaders and entrepreneurs to find their own identity and purpose, meaning in life and subsequently to develop a set of successful habits helping them in key areas. We want to provide a methodology that is easy to understand, practical and accessible for an increasingly broad audience, including young people who are just now starting their careers and thinking about starting their own business.

It is simple. If you poison one part of a system, that will certainly hit back hurting you or your children. Knowing all this, why would you do it?

If you are interested in exploring your Purpose, or your organizational Purpose with your team to get to the next level in leadership, please get in touch with me at mickeyafeher@gmail.com.

If you are interested in reading Robert B. Dilts’s book on Next Generation Entrepreneurs go to:

http://www.amazon.com/Success-Factor-Modeling-Volume-Entrepreneurs/dp/0996200401

The article is based on an edited version of an interview with Mickey published by economic magazine Figyelo by Gergely Bruckner.

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