The True and Only Purpose of Business
Last September 24th, the CEO of Fair Trade Outsourcing, Mike Dershowitz, and the CEO of Whole Foods Market, John Mackey, had a great discussion revolving around values-driven leadership and social entrepreneurship. These topics were central to Mackey’s new book, Conscious Leadership: Elevating Humanity Through Business.
The event was part of the Philadelphia Chamber of Commerce’s Defining Innovation Series which explores the critical intersections of creativity, business, and the skills needed to innovate in a rapidly changing world.
The discussion itself opened with a timely question. Mike asked John: “In the midst of this crisis, most businesses are focused on their own survival. So, shouldn’t they be focused on that instead of worrying about all of their stakeholders?”
John replied: “If you’re trying to survive, you’d be moving down Maslow’s hierarchy of needs. That tends to preoccupy people.” However, he clarified the best answer isn’t either. It should be together. Profits AND purpose, not profits OR purpose. Survival AND stakeholders, not survival OR stakeholders.
The second question referred to chapters 2 and 3 of “Conscious Leadership,” where John discussed some universal values. These values — “words about humanity,” as Mike put it — include love, generosity, gratitude, appreciation, care, compassion, forgiveness, integrity, truth telling, honor, authenticity, courage, and trustworthiness. Mike asked: “Why do we need all these to be a successful leader?”
In “Conscious Leadership,” John repeatedly says, “Lead with love, always act with integrity.” For him, love and integrity are skills more than emotions. Because they are complex, they have to be broken down into their smaller components. For love, we have generosity, gratitude, appreciation, caring, compassion, and forgiveness, which are the attributes of love. And for integrity, its attributes includes truthfulness, honor, authenticity, courage, and trustworthiness.
It’s easier to grapple with becoming a conscious leader when you focus on those two leadership skills, which is leading with love and always acting with integrity. That makes it more manageable. It can be overwhelming, but you can work on each of those attributes until you become pretty good at it.
The discussion segued into what’s happening on the world stage, particularly the Business Roundtable’s change of heart. On August 19, 2019, the association of the chief executive officers of nearly 200 of America’s most prominent companies announced a new corporate purpose. The new statement acknowledged that business could do more to help the average person.
In connection with that and many other events of similar nature, Mike asked John if the change in purpose among business leaders made him feel like we’re making progress or that people were starting to realize that capitalism needed to change or was changing. John replied with certainty, “We are making progress, there’s no question about it.”
However, his biggest concern was that it’s all being misunderstood. Many people remain stuck in the old mindset, which looks at the purpose of business through a binary lens. They think it’s just a bunch of greedy bastards running around, taking more than their fair share of the pie. With the new purpose now practiced by an influential group of business leaders, it’s as if they’re trying to change the narrative into making business people good and less greedy.
This is what someone with a zero-sum mentality would think about business people. If someone is gaining, then someone else is losing. If someone is getting rich, somebody else is getting poor. It’s very good and evil, light versus darkness. Very binary, very polarized.
It’s quite inaccurate, however, and so far from reality. Most businesses are not playing a win-lose game. They’re playing a win-win-win game.
They’re creating value all the time. They’re creating value not just for their investors. They’re creating value for their customers; otherwise, they don’t make profits. They can’t create value for their customers if they’re not also creating value for their employees. They have to work with suppliers in order to have the products and services to sell. So, they’re creating value for those suppliers.
When businesses, whether they are philanthropic or for-profit, are taxed, they’re also creating value for the government. And so, business essentially plays for a win-win-win solution rather than try to overcome challenges in a win-lose scenario. And the value that business creates benefits not only their consumers, employees, and suppliers, but also other sectors of society.
This is the core message that John Mackey wants to spread through his books, his company, and his interviews and speakerships: “All of the stakeholders are interdependent. We can develop strategies that help ALL stakeholders to win. It’s about creating value for all of them. We have to stop thinking in terms of trade-offs.”