At London Business School, we often try to explain the purpose of our existence by showing pictures of our students who are working on environmental issues in rural India or improving sanitation in a township in South Africa. We also always highlight the wonderful work of our Professor of Economics, Elias Papaioannou, on clearing landmines in Mozambique and the equally wonderful research by our marketing professor Rajesh Chandy on entrepreneurship in developing countries. And rightly so. These are admirable projects about issues that have a very direct and positive influence on the world.
Companies Don’t Always Need a Purpose Beyond Profit
Companies also struggle to explain the greater purpose of their existence. They are told by business magazines, management surveys, and gurus that what motivates employees is a higher sense of purpose in their work. Often, however, it seems to leave people feel somewhat cynical rather than motivated. Perhaps organizations shouldn’t be shy about stating profit as its explicit and ultimate purpose. In fact, in addition to helping us earn a living, profit may be the best way to do good in the world. Purpose does not have to come from some artificial appeal to a higher order societal goal – rousing speeches by company leaders about their company’s grand purpose seem to have no effect at all. Business is a worthy purpose and economic wealth is an excellent way to do good in the world. It is up to business leaders (and business schools) to help people grasp the social power of profit.