Good business is about people. Really.

Published originally at https://discoveredbrand.com/blog/2018/8/1/good-business-about-people

In the mad rush for really big data—the more of it, the better—we may risk losing sight of the most valuable part of business--people. I love data as much as the next person, and use it whenever I can. But a set of data points does not a real person make. I don’t love the idea of being visualized as a set of data points on someone’s dashboard. It’s a safe bet that you don’t, either.

Does it make good business sense to treat all people well--employees, partners, customers, as well as shareholders? As it turns out, the idea that profit and purpose can and should go hand-in-hand was more the norm not so long ago, and it's becoming increasingly attractive to mainstream business leaders.

Business doesn’t get any more fundamental than good relationships between real people. Business owner to employee. Employee to customer. Business owner to partner or vendor. Employee to community. When a company prioritizes having positive impact on people, either directly or indirectly by creating impact on communities, the economy or the planet, good things happen. 

In 2015, Virgin CEO Richard Branson launched The B Team, an independent initiative to focus “… on how we can help people reach their highest potential and purpose – which will naturally have a positive impact on the bottom line.” This is not a fringe project-- member companies include Global 500 companies such as Tata Group, Unilever, DOW Chemical and more.

A great deal of data support the idea that the Golden Rule—that fundamental rule of playground politics that encourages treating others as you would have them treat you—makes even more sense in business. Ernst & Young cites these examples:

• Purpose-led companies outperformed the S&P 500 by 10 times between 1996 and 2014 (Raj Sisodia, Firms of Endearment and Havas, Meaningful Brands Index, 2013)
• 75% of companies with a clear sense of purpose are the new leaders in customer retention, with 75% retention rate (Edelman, The good purpose study, 2013)
• Purpose-led companies have employee engagement levels that are 1.4 times higher, and those employees are three times more likely to stay than employees whose companies are not purpose-driven (The Energy Project, What Is Your Quality of Life at Work, 2013)

Despite these compelling numbers, I am frequently met with a kind of amused skepticism when I talk about my focus on purpose-driven businesses.

Purpose, I am told, is the concern of non-profits. Perhaps, some concede, a few very large companies have embraced corporate social responsibility, because they have the resources to do so. Beyond that, however, there is the reality of real business.

But caring about people, communities and the planet isn’t just limited to companies that proudly wave the purpose flag. Does purpose in fact have a purpose in business? Yes, in fact, it does.

Steve Denning writes in Forbes recently that there is mainstream momentum away from the long-held belief that a company’s only true purpose is to maximize shareholder value. Interestingly, the idea that shareholder value is the only true purpose of a business didn't take hold until the 1980s. Prior to that, a more commonly held definition of company purpose was, according to Lynn Stout in The Shareholder Value Myth, “… to provide equity investors with solid returns, but also to build great products, to provide decent livelihoods for employees, and to contribute to the community and nation.”

Denning notes that a return to a more holistic view of business purpose is emerging. Leading economists and CEOs such as Paul Polman, Mark Benioff and even Jack Welch, once a great proponent of the shareholder value focus, are increasingly vocal in insisting that shareholder return is important, but that it is the result of taking care of customers and employees first.

So, do the right thing by the people that are at the core of your business and good performance follows.

On a personal level, when my family sought a new high school for our teenager this past year, we discovered a small and very unique school. What stood out was not a shiny STEM program or exciting extra-curricular options, but a relationship-based approach to education, aimed at reengaging students with learning. Purposefully small, the school operates on the principle that the best learning happens when kids develop good relationships with their teachers. In this school, there’s no hiding, no fading into the background. It’s a place where everyone does really know your name and care about who you are as a person. (Side-note: my teen is doing well there, showing signs of becoming that engaged life-long learner all parents hope to see).

This same high regard for real people is at the core of businesses that aim for profit and positive impact, whether they call themselves human-centered business, profit-for-purpose, for-profit purpose-driven, B-corp, triple-bottom-line or even a so-called old-fashioned business that aims to serve customers, employees and shareholders, in that order.

At the end of the day, it may not always be about who you know, but the value you place on getting to know and care about the people you do business with every day.

My personal goal is to work with passionate people, to help them realize the potential of their company’s purpose and to shine a light on the impact of doing good business and doing business well.

I invite you to share how you bring purpose into your business in the comments below.

If you'd like to learn more about how your purpose-driven brand story can drive more business growth, visit getyourbrandstory.com.