The purpose of profit

I wonder why businesses haven't figured out as yet that the worst measure of success for any business is the money they've made.

I wonder why many CEOs have not as yet figured out that unless your business has a purpose it isn't really a brand.

While I was at Lintas, I used to help Alyque Padamsee with a pet project of his. Creating Public Service TV Commercials. Once, he asked me to put a Lintas showreel together for a talk he was going to give on Public Service TV Commercials.

Quite cheekily, I put together a reel that featured Lifebuoy (health for the less privileged), Surf (for converting India to bucket washing, thus saving water), Kamasutra (prevention of AIDS), Hamara Bajaj (national integration), along with the several TVCs that Lintas already had in the genre of "public service" that had won Clios. We had a good laugh. The showreel was trotted out a "Prayer Meeting", one of a delightful set of rituals "God" had institutionalised at Lintas.

That was as far back as 1990.

Even then we knew brands have a purpose that's more important than profits.

What's taking us so long to put that obvious thought into practice? Why do businesses still put profit before purpose?

I guess they are blinded by the need to let people know that they are made of money. (Love this old Geico campaign!)

I was fortunate enough to have been asked by the SPJain Institute of Management and Research to build, operate and transfer to them a workshop for Creating NGO Brands. (NGO translates as not-for-profit, in India.)

The crux of that workshop was to help 'Not-for-profits' figure out their SMART Objective.

Sustainable. Measurable. Allowable cost. Reviewable. Timebound.

The participants readily agreed that they needed a "metric" of the good that they were doing. It was the surest way to get funding. The workshop helped them design such a metric and build it into their operating processes.

What I did not tell them was that is also the crux of the workshop I do for For Profit Brands.

A brand without a measurable purpose isn't a brand.

At best, it's a product or service with a logo.

Profits don't measure your success as a brand. The number of prosumers you have does.

Thanks to the growth of social media and the power it has given consumers, at least in the western world, corporations are realising that consumers don't quite worship businesses that exist just for the purpose of making profits.

The savvy consumer is already quite aware that many companies are resorting to "purposewashing". A little like the phenomenon that once swept the west. Greenwashing. Suddenly most companies claimed to be saving the world. While they still continued to worship at another kind of green altar.

"Purposewashing" has a new kind of avatar in India. It's called CSR. Or Corporate Social Responsibility. Companies that make a lot of money are legislated to spend 2% of their profits for social purposes.

Companies that set out with the sole purpose of making profits don't quite know what to do. The mandated CSR Committees debate endlessly as each board member peddles his or her pet charity.

Companies that have strong brands know exactly what to do.

Their brands started out with a social purpose in the first place. They are happy to spend 2% of their profits on their brand's purpose. They were already spending more than that just to be sustainably profitable.

Derrick Daye said it well, in this article. Modern brands cannot compromise their meaning.

In that article, he quotes Guy Kawasaki:

“The core, the essence of entrepreneurship is about making meaning…those companies that are fundamentally founded to change the world, to make the world a better place, to make meaning, are the companies that make a difference. They are the companies that succeed…if you make meaning, you will probably make money. But if you set out to make money, you will probably not make meaning and you won’t make money.”

That's why I am so enamoured of an idea that I first heard of from Ruma Biswas. She wants to support a movement she calls #Purpose4Profit.

Listen to this interview where she talks to Harsh Mariwala of Marico.

Do you know of other Indian CEOs who lead by purpose? I know there are some. Ruma shared with me a list of twelve that she wants to interview.

If there are more who you think should be on that list, (even if it is your own CEO), I'd like to tell Ruma about them. She would probably want to interview them, too.

Or feature them in a series of Roundtable discussions that she is planning, one every quarter.

If you are interested, you should find out more about the one she's organising this Oct 21, at The St. Regis in Mumbai.

I wish I could be there.

But no, I will be in Kolkata.

If you are in Mumbai, and you've read this far, you should be there.

And even if you are not in Mumbai, you can weigh in here. In the comments on this article.

What comes first? Profit or Purpose?

Perhaps I should ask, what should come first? Purpose or Profit?

I already know most companies put profit first. To their long term detriment.