Almost everything you have ever been taught about business leadership has changed. The ridiculous belief that the primary purpose of business is to make money has become a catastrophic mindset.
Ironically, it’s not only catastrophic for the planet but also for business success. That’s because profit-centric leadership actually kills creativity, innovation and employee effort.
Think about it…all the companies we admire are up to more than making money. Don’t get me wrong, making money is essential to having a thriving business. But making money is a means to a greater end of doing things that improve the quality of life for customers, employees and our communities. And the only people who don’t understand that are the idiot dinosaurs that run Wall Street and the world financial markets.
Recently I led a panel discussion for the Agents of Change conference. The panelists were senior executives from three companies. Omada Health, Imperfect Produce, and Active Networks. The conference which was organized by one of my all-time favorite CEOs, Kristin Carroll, and was focused on creating innovative ways of vastly improving public health. All three of these companies are either public or investor-owned. They have harnessed the disciplines of capitalism and the financial rewards that go with it to come up with disruptively innovative solutions to serious public health problems. People used to call these kinds of businesses social enterprise. But that is an obsolete way of thinking.
Even the term social enterprise engenders an image of well-intended 20-something’s experimenting with soft business ideas trying to make a little money by doing a little good.
But that’s not what this new generation of innovative, life–improving businesses is about.
Solving the biggest problems of our age is our greatest economic opportunity.
These problems stimulate game changing innovation. And the disciplines of capitalism create sources of funding that enable these companies to scale up and do more good for more people.
Let’s start with Kristin. She is CEO of Rescue. The are a fast growing for-profit marketing agency that makes money by using the science of behavior change to motivate youth to quit smoking or eating junk food by making healthy habits cool. It’s kind of magical. They work with street teams, create gnarly websites and “fake/ironic brands’’ to create social energy for healthy choices. It works and the deal is this…it is fun to go to work each morning at Rescue.
Omada Health uses the science of human behavioral change to help diabetics make lifestyle and diet changes necessary to reverse the disease. They combine live expert coaches, with education, training and incentives to get measurable results that are saving lives. Big companies and health plans gladly pay for the their proven solution. They raised $48 million in venture funding a few months ago.
Imperfect Produce improves the diets of subscribers and the undernourished by buying nutritiously perfect but visibly ugly fruits and vegetables at 50% off from the growers and then sells them for a tidy profit. Their business model ensures that the nearly 40% of imperfect produce does not go to waste, but rather elevates the public health of the communities they are serving. They have both a retail business and a grant-based revenue stream to bring delicious but unfortunate looking produce to the poor. They even teach the ‘burger & fries eating population’ how to prepare and cook real food. Will it work? It already is. After launching eight months ago they have built a trickle of cash into a rising river of profits. (That’s more than you can say for Twitter!)
Active Networks is a technology company that generates about $500 million in revenue by helping people get active. They do this by having a turnkey solution for anyone who wants to create a 5K run, a tennis tournament, a surf contest, start of biking club, youth soccer league or any other “active” event that requires registration, collecting money and many other organizational needs. The founder of Active discovered that one reason that prevented people from organizing sports and exercise related activities and leagues was simply the tedium of all the “back room” work that needs to be done when you organize people. Active Networks makes it easy to have fun and get healthy. That’s their mission.
I don’t call companies like these social enterprises. Rather, they are Purpose-Driven companies. They make money on purpose!
I know, that sounds a little cute but it’s more than that. When Stephen Covey and I started the Covey Leadership Center there was no demand for leadership training mixed with personal development. But our purpose was to help people live and work so that their lives were meaningful, successful and enjoyable. Our purpose is what drove our prosperity.
Purpose-driven enterprise is no longer the exception. Just last week I helped a CEO make the business case to his 400 top leaders for full-on strategic focus and rebranding of his global enterprise to be purpose driven. What is impressive is that he is sincere, smart, and totally committed to drive growth by turning human values into value. The announcement was a huge success. It is what everybody wants to be a part of and it is driven by an overwhelming megatrend toward communitarian values. Consider this…
Women, Millennial’s and Minorities are changing everything. The rising power of women both in terms of economic decision-making and business and institutional leadership is changing business decision making and the locus of economic power.
The rapid rise of women in government and nonprofit leadership is accelerating momentum in the elevation of women in every size of business. (see: Broad Influence, Jay Newton–Small) For the first time in history more new businesses are being formed by women than men. Large financial institutions, such as Goldman Sachs, have created investment divisions focused on financing women-led enterprises. This is not a fad. Forty percent of the students at the top 12 MBA schools are women. The rising influence of women in leadership is being accompanied by a mass influx of millennial’s into the workforce. According to research from University of North Carolina, millennial’s will make up 46% of the US workforce within four years. Additionally, there is a rising tide of ethnic minorities who, in the coming decades, will likely become ethnic majorities. Research shows that women, millennial’s and ethnic minorities all share stronger community values and concerns than the traditional individualism so prominent among baby boomers.
This new mindset that embraces cognitive diversity and a shared responsibility to build prosperous and sustainable communities will have big impacts on what businesses need to do to be successful. Neither the marketplace nor the workplace will ever be the same.
As for me, I am pretty much out of my mind with joy. I’ve been waiting for decades for business leaders who were SMART enough to see the economic value in solving problems that really matter to people.
As I have said to many students who were just starting their career…“To do something truly great for humanity you don’t need to take a vow of poverty but simply a vow of purpose.”
So how about you? Are you investing your brains and energy into meaningful work? If not, what enterprise do you most admire? What would it take for you to take your talent to the next level?
What would it take to put a thoughtful plan together so you can work with the people you want to work with, doing work that brings you joy and meaning?
And please remember this doesn’t have to be earth shattering. Brent, a young purpose-driven surfer entrepreneur has a tiny surf shop about five minutes from my home. The main way he makes money is running surf camps for kids. In surf lingo they are called ‘groms.’ Of course he teaches these 5 to 10 year olds how to surf. And he does so much more. He intentionally teaches them, courage, self-discipline, good manners, supporting others, optimism and determination. He is really running a character camp. Some of his kids have gone on to be professionally sponsored surfers. High-performance and high character really does go together.
The old mindset is dying. It will not work in a world of 7½ billion people. The new mindset is already taking over and it’s great. Join the future!