1: In 1962, Milton Friedman famously wrote, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits…”
Was Milton right? Do businesses exist to maximize profits?
I think the more interesting question is: What is the best way to maximize profits? And, over what time period?
Because maximizing profits in the short-term is very different from maximizing profits in the long-term. Which is where so many organizations get into trouble. Consistently making decisions which maximize short-term profits often cripples long-term profitability.
2: Which is why purpose is so important. Purpose is our reason for being. Purpose asks: What difference do we make? Or, even better: Above and beyond making money, what difference do we make?
Yes, we must make money. Of course. What happens to organizations that don’t make a profit? They go out of business! Of course.
It’s the same in our personal lives. We need to make money. To pay the rent or our mortgage. Electric bills. Gas bills. Water bills. A cell phone bill. A cable bill. Insurance. Our education. Our kid’s education. We need to put food on the table. We want to go on vacation. And, save for our retirement. Of course, we must make money.
It’s the same thing for any organization. There are bills to pay. And people to hire. We need to invest in innovation and growth. We must make money.
And, as leaders, we are wise to go deeper. We are wise to tap into a deeper sense of purpose and meaning. It’s not “either / or.” It’s “both / and.” We exist to make money and to make a meaningful contribution in the world.
When we articulate our purpose, we energize our people. We ask better questions. We find new ways to make a contribution. We take actions to increase long-term profitability.
Purpose answers the “Why” question. “Every single company and organization on the planet knows WHAT they do,” writes Simon Sinek in Start with Why: How Great Leaders Inspire Everyone to Take Action. “Some companies and people know HOW they do WHAT they do.” Yet, very few know WHY they do what they do. “By WHY I mean what is your purpose, cause or belief? WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care?”
3: At PCI, we are crystal clear on our purpose: We inspire dreams and transform lives.
One insightful way to find purpose is to look at the people and the markets we serve. At PCI, we serve the university, association, and high school markets. These organizations inspire dreams and transform lives. The work we do strengthens their ability to do this, providing the WHY behind the WHAT.
More next week!
Reflection: What is the meaning in my work? Who do we serve? What difference do I make?
Action: Journal about my answers to the questions above.