Your Beliefs About the Purpose of Business Are Limiting Your Ability to Make Money!

In this week’s episode of The Jasper Blueprint, I unpack what I call The Two Camps Trap. For so many business leaders there is?a subconscious belief driving how they run their businesses that is limiting their ability to make money.??

If you’re keen to jump straight into the episode, you’ll find the video below or scroll to the bottom of the page and you’ll see the audio version.?

Reflective Exercise:?

To help you reflect on your own beliefs about the purpose of business I responded to a question that Sascha Janzen asked: "What are specific ideas, steps, questions that help to move from a profit only to a ‘do good AND make money’ mindset and reality?”?

The best place to go to answer this question is a deeper exploration of what I call The Two Camps Trap.??

Our unconscious beliefs about the purpose of business are limiting our ability to create businesses which deliver on both sides of the equation Sascha mentions.??

Seeing business as a one-dimensional vehicle for profit-maximisation, with any kind of contribution or “giving back” as being external to our businesses – the work of government, charities, or social enterprises – robs both of their power.?

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If you think about The Two Camps Trap as having an External Camp, and an Internal Camp. The External Camp is where you see the role of business being focused on profit maximisation.??

You don't ask questions or look for aspects around contribution or making a difference in the world positively or negatively through the core business activities. Instead, you simply see doing good and contribution as being external to your business.??

Your sense of doing good may be enabled by the business, when you do well, you're able to donate a percentage of profit, or when you have capacity, you're able to give pro bono time or allow staff to volunteer. Contribution is enabled by the business but when you look at that business model canvas, they're still sitting outside the business.??

The aspect that I want you to have in your minds moving forward is shifting into what I call the Internal Camp. Where you start to bring the questions and the thinking about the flow on impacts of your decisions on how you spend money, how you treat people, who you buy from in your supply chains. ?

These become the lenses that you're bringing to your business to ensure that you ask the questions and see those ticks of good not just sitting outside the business model, but inside each of the nine boxes of your business model canvas.?

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Comparing The Two Different Approaches?

Practical Examples: Bottled Water Company??

External Camp?

Let’s start with looking at a bottled water company that takes the External Camp approach to their business. ?

Aaron is a well-meaning, well-educated man. No question Aaron’s intentions were good but his External Camp approach to business set in motion a confusing tension between what he espoused as his mission, and the very foundations of the business he built. Let me give you a bit of background on his business.?

With a powerful desire to make a difference to an issue he cared about he went about building a business that could “give back.” For him, the thing that pulled at his heart strings and captured his imagination, was his desire for people everywhere to have access to clean water – an honourable and basic human right, without question. ?

What happened next is where the dissonance kicks in.??

Aaron lived in a country with clean drinking water and no need for people to be purchasing bottled water, yet because in his mind he was focused on how he would contribute using the profits of a business (External Camp) rather than thinking about the impacts of the core business and operations of the business he was building, he founded a bottled water company with the intention of donating 100% of the profits made.??

If we were to peer into his External Camp brain, here is the thinking we would see captured on his business model canvas:?

If you look at Aaron’s business model canvas above, you’ll see that his thinking around the “in-house” components (Key Resources and Key Activities) is extremely focused on PR and marketing. ?

Given that he has what I call a Prescribed Philanthropy model - by buying from him he is choosing where to funnel your philanthropic donation to a charity – this makes sense. For Aaron’s business to get traction and keep customers buying everything relies on perception, a shared identity of “helping,” and delivering a “feel good factor.”??

When you look at the way he has presented the “outsourced” element (Key Partners) you will notice he relies entirely on charity partners to deliver impact and the “feel good factor” but then claims full attribution for his company and its customers for the achievement of any positive impacts generated through his partners.??

The model also depends on free labour (volunteers, interns, and Brand Ambassadors) and pro bono services (legal and accounting). It needs this free labour in the backend because Aaron’s internal dissonance around the purpose of business has left him ill-equipped to effectively build his business or figure out how to merge money and meaning.??

Aaron’s business model is incredibly simplistic and ignores the realities of what it really takes to deliver its products to customers, or account for the damage it is doing in the process.

Even with 100% of profits being donated, Aaron is not even scratching the surface of the damage his business is inflicting on people and the planet.?

Remember, how you make money matters. Not just what you do with it!?

Aaron was ignoring two fundamental things that limited him every step of the way; both in his ability to grow his business and in his ability to make a bigger impact in the world on the issue he cared about.??

By framing his contribution, and the meaning of his work, as sitting outside his business he ignored the massive damage he was doing in the choices he was making.??

First up he chose one of the worst possible products to have as his main revenue driver – bottled water. Secondly, he didn’t examine the options open to him to at least be more conscious in the materials, packaging, or production of his bottled water.??

Instead, he just tried to make the business stack up enough to make as much profit as he could to then give away as much as possible through donations… But let’s back up a little and unpack what that really meant for him in his business.??

The European Commission has determined that over 80% of the environmental impact of products is determined at the DESIGN stage. That’s an immensely powerful position for someone like Aaron to be in when running a product-based business.??

Imagine if Aaron had taken that responsibility seriously and embraced the opportunity to build something extraordinary, rather than only seeing the business to generate profits to donate to a cause while ignoring the actual damage being done in the generation of those profits.??

Rather than change every element of how Aaron ran his business, let’s assume he still chose to have bottled water as his main product, how could he have designed his business model in a way that shifted him over to the Internal Camp???

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Internal Camp?

To get a glimpse of how Aaron could have built a completely different business model if he questioned his beliefs about the purpose of business and shifted to an Internal Camp approach let’s look at Jay’s bottled water business which manufactures a paper-based container for the water.??

In stark contrast to Aaron’s simplistic approach, in Jay’s business model we see a layered approach to how they run the business and make a difference in the world.?

Remember that in the Internal Camp the purpose of business is centred around value creation. Knowing the value you bring. Understanding the value your customers want. Capturing value in return. Jay’s business model demonstrates their understanding of this. They know how to deliver results and drive revenue.??

First up, Jay’s positioning is upfront with customers about the fact that bottled water is a non-essential luxury item in their country. Jay encourages their customers to use refillable bottles wherever possible.??

But Jay is not a purist. They are pragmatic and know that while people should rely less on highly disposable products like this, convenience water is a market worth tens of billions of dollars, with billions of plastic water bottles being shipped every year. It is not a product line that is going away any time soon.?

To approach this market opportunity from the Internal Camp Jay thoughtfully designs, builds, and operates their business creating a genuinely better alternative. This starts by looking at how their highly disposable product is produced, packaged, and transported.?

When we look at Jay’s business model canvas above, we see that their thinking around the “in-house” components (Key Resources and Key Activities) highlight the importance of storytelling, PR and marketing, research and development (R&D), and brand to make growth and giving mutually reinforcing.?

When you look at the way they have presented the “outsourced” element (Key Partners) you will notice they think about suppliers and raw materials as primary considerations while also committing to support related experts in areas of water and restoration through tree planting.?

Jay’s approach means they landed on a model that demonstrates genuine innovation in the backend of their business. By operating from the Internal Camp Jay was able to identify ways to improve environmental and social impacts in ways that simultaneously reduced costs and simplified logistics.??

Jay’s model isn’t about forcing the owner and customers that to produce a better outcome the only answer is to pay more. Instead, Jay’s beliefs about the purpose of business and the way that they grappled with and took responsibility for the decisions they had control over allowed them to build a better business.??

Jay’s paper-based container addresses significant issues around recyclability and lifecycle of the waste by switching from plastic to paper. Far beyond these obvious improvements though what Jay did next opened options Aaron could only dream of!?

Decisions made in Jay’s company lead to designing flat-packed boxes and a network of regional filling plants. This resulted in massive efficiencies, cost reductions, and reduced environmental damage.?

For each truck of Aaron’s bottled water, Jay could deliver 26 truck loads! Jay sent flat-packed cartons to their network of regional filling plants and only once they were within the region for delivery and sale were the cartons filled with water.?

Can you see the difference in both what you build and the results you can generate all based on whether you operate from the External or Internal Camp?

Drive to Action

As we wrap up, I want to leave you with some questions to help drive you to action. I want you to ask yourself whether you are in the External or Internal Camp currently in how you run your business.??

• Jot down the first things that come to your mind when you think about how your business makes a positive difference in the world.??
• Go through that list and highlight the ideas which relate to decisions you’re making INSIDE your core business activities.??
• What do you notice when you look at your list now?? - Do you have a mix of internal and external forms of contribution or is it sitting heavily in one “camp”?? - How do you feel about what you observe on the back of this exercise?? - Are there changes you would like to see??

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I hope the examples I’ve shared and the questions I’ve posed have got you thinking. You can merge money and meaning in a way that strengthens the financial stability of your business and brings more meaning and purpose through running a business you can be proud of. ?

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As always you can listen to the latest episode right here on LinkedIn. Please leave a comment or connect with me over on LinkedIn to share any insights or questions.?