Best Practices

Should Businesses Put Purpose Before Profit?

There is a growing movement that says businesses—and in particular major corporations and unicorns—should be taking their social responsibility more seriously. They should be supporting employees and communities, protecting the environment, and fueling the local economy. In fact, the argument is that these should be the biggest priorities for businesses—ahead of profit. This idea doesn’t sit well with everyone. “Without profit, the company dies! People starve!” But the discussion is about putting purpose before profit—not in place of it. So the first natural question is: what should a company’s “purpose” be? And the crucial follow-up: can a business really thrive and grow without a profit-first mentality? What about the effects on employees, customers, shareholders, investors, and the broader economy? We believe that businesses can thrive, making healthy profits while also putting their social purpose first. Let’s look at how. How did “profit-first” become the status quo? There is a somewhat famous quote which perfectly summarizes the mindset of business owners in the 1960s and 1970s eras. Made by the CEO of an large textiles company and published by Forbes, it goes: “The objective of our company is to increase the intrinsic value of our common stock. We are not in business to grow bigger for the sake of size, not to become more diversified, not to make the most or best of anything, not to provide jobs, have the most modern plants, the happiest customers, lead in new product development, or to achieve any other status which has no relation […]