What is your business for? Welcome to the Economy of Meaning

Curly: You know what the secret of life is?
Mitch: No, what?
Curly: This.
Mitch: Your finger?
Curly: One thing. Just one thing. You stick to that and everything else don’t mean shit.
Mitch: That’s great, but what’s the one thing?
Curly: That’s what you’ve got to figure out.

Now, I’m not normally one for finding deep philosophical meaning in movies or song lyrics but, reflecting on a lot of what’s been said on this and other blogs over recent weeks and months, these lines from an old comedy favourite – City Slickers – seem rather apt.

Whether it’s Mike Klein’s recent CommScrum post on The Age of Intent, Umair Haque’s rallying call for business to do “the meaningful stuff that matters most”, or responses from Mary Boone and Grant Young to my post on creating value through sustainability, one unifying thought comes through loud and clear…

Meaning matters like never before.

Umair’s take on this – the quest to create what he calls “thick value” – is illuminating. However, eminent philosopher and management guru, Charles Handy, probably says it best when he poses the fundamental question: whom and what is your business for?

(If you want to read his fabulous 2002 HBR article in full – and I strongly recommend that you do – you can find it here.)

In short, he makes the profound observation that most shareholders these days – though the theoretical owners of a company – are actually nothing more than investors (even gamblers), and that to turn their needs into a purpose (e.g. the “maximising shareholder returns” line, so often the core of companies’ mission statements) is to be guilty of confusing a necessary condition for a sufficient one.

“The purpose of a business,” he concludes, “is not to make a profit, full stop. It is to make a profit so that the business can do something more or better. That ‘something’ becomes the real justification for the business’ existence.”

He continues:

Deep down, the suspicions about capitalism are rooted in a feeling that its instruments, the corporations, are immoral in that they have no purpose other than themselves. To make this assumption may be to do many companies a great injustice, but they have let themselves down through their own rhetoric and behavior. It is salutary to ask about any organization, ‘If it did not exist, would we invent it?’ ‘Only if it could do something better or more useful than anyone else,’ would have to be the answer, and profit would be the means to that larger end.

Couldn’t agree more.

Of course, all this has been said many times before. But in the aftermath of the global financial crisis and other catastrophes, like the BP oil spill in the Mexican Gulf, this has a new resonance. The consequences of “thin value” – of profit decoupled from the people and resources impacted by its generation – have been exposed like never before in our lifetime.

It’s time for businesses to put the organisational “why?” – Curly’s one thing – ahead of the who, the what and the how. Why do you exist? What do you stand for? What higher purpose do you serve? Why should your people drag their arses out of bed in the morning to come and work for you? If your business ceased to exist tomorrow, why should anyone miss you?

If you can’t answer these questions – authentically, materially – then you could well find yourself regretting it. To quote from another much-loved movie: maybe not today, maybe not tomorrow, but soon…

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6 thoughts on “What is your business for? Welcome to the Economy of Meaning

  1. kevinkeohane

    Nice comments as always Mr Gray. Had a chat at the pub with one Niall Dunne a couple of nights ago and to him that “one thing” is Sustainability (in its broader sense).

    If you “get it” it’s hard to disagree.

    But a lot of people don’t “get it” and that is where the challenge – and of course the real opportunity – may well lie…

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  2. Geoff Barbaro

    Dan, thoughtful post as usual, but Charles Handy is wrong when he says the purpose of business “is to make a profit so that the business can do something more or better.”

    No, it is so that people can do something more and better, your customers and your own people and everyone else involved or interested in the business.

    Define the end game in terms of a higher purpose for people (which sounds grandiose, but doesn’t have to be), not a higher purpose for business.

    In essence, a business is an efficiency tool as much as it is anything, a way of gathering people together to achieve more, better!

    Cheers, geoff

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  3. Dan Gray Post author

    You’re dead right about defining purpose in terms of people, Geoff, and I like your notion of business as an efficiency tool – by which I take it you mean a vehicle for achieving something together that would be difficult for people to achieve as individuals (or words to that effect!).

    Call me a soppy idealist, but I actually think that’s precisely what Handy is driving at – i.e. that for “business”, one ought to be able to read a gathering of people linked by a shared purpose, values etc. and their desire to make a difference in addressing a particular problem/opportunity.

    Were fundamental business viability determined by the “meaningfulness” of that higher purpose (and the strength of people’s connection to/ownership of it), rather than what that they can get out of the “business” in purely transactional terms (e.g. investors short-selling for a quick buck), then we’d all be in a much better place.

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  4. Deborah Hinton

    Heh Dan. Another way to get at this that I sometimes use with my clients is to ask them to imagine what would change in the world if their institution didn’t exist.

    Can be a pretty powerful way to help them see how they have lost their focus and getting them started thinking about what they really want.

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  5. Deborah Hinton

    Just heard a really interesting interview with the author of “The Chocolate Wars”, Deborah Cadbury [yes, one of those Cadburys]. Worth a listen if you can get it outside Canada [interview is 1/2 way through 2nd hour http://bit.ly/cN25Xy%5D.

    By exploring the confection business, she discovered something she calls Quaker capitalism – mission, vision, values driven – in the truest sense of this. Quaker founders in the 1700s built businesses that became huge – Clarke’s shoes, Lloyd’s of London, Rowntree, Fry’s, Cadbury’s, Barclay. But they started from a community purpose and even in the early days had a strong philanthropic orientation. She contrasts this with shareholder capitalism and uses the recent Kraft acquisition as an example. Scratches beneath the surface of some of what we’re talking about here and the employer brand discussion you’ve reprised on Live Long and Prosper [http://linkd.in/d8tMM3]. Gee I think I may need to run out and get her book.

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    1. Dan Gray Post author

      Ta, Deb, great link. Of course, another name to add to that list would be the John Lewis Partnership – the subject of many a previous post of mine (e.g. here). Nodding to my “true north” post above, it’s possibly the best contemporary example (in the UK at least) of an organisation who’s brand value is well and truly built from the inside out.

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