This is the third contribution in this series of short conversation pieces. In the first article, we spoke about the necessity to focus on individual or personal purpose as the point of departure when we think about rebuilding our business. In the second article, we focused on the market and customers. As shown in the diagram, the logic is simply that if I can connect my personal and life purpose to a market or customer need my chances of building a sustainable and successful business is that much greater.
To think about the impact of my business beyond the profit I wish to make, it may be useful to begin by exploring who all of my key stakeholders might be. The question to all of these stakeholders is the same, namely what specific impact or benefit do they wish to obtain from my business. Some or all of the following may be relevant also to your business:
- Your immediate family may want financial security, as well as sufficient quality time with you;
- Your employees will want decent wages, safe working conditions, job security and to be treated with dignity and respect;
- Your customers will want predictable and reliable quality and service at a price-point that their business can afford;
- Your providers will want you to pay them for products or services delivered, and to be a secure and predictable partner to them;
- The communities you are part of will want you to respect their space and time;
- The government will expect of you to adhere to all legal and compliance requirements; and
- As a good citizen you will also need to be conscious about the impact of your business on the natural eco-system.
This list is not meant to be complete, and is simply a thinking guideline to consider how our business, however small or large it may be, simply has to serve the interests of a range of stakeholders who are not as concerned about my profits as I may be. This is the bit about business that asks of us to make some significant choices or trade-offs. I may need to reduce my personal profit expectation to ensure that my employees earn a decent living wage. I may need to incur additional cost to make sure my operations do not cause harm to the environment. I may need to employ and accountant to make sure that I remain tax compliant. All of these will simply mean that my personal profit or financial gain will be reduced.
Can this be avoided? In most businesses the answer is no, especially not if you consider it important to also conduct yourself in an ethical and responsible manner.
A possible exception to this may be so-called lifestyle businesses.
These are usually very small one person or family businesses that have no expectation of growth or long-term sustainability. Their only purpose is to fund the living expenses of an individual or family, and when that person or family leave the business nothing of it remains. Is it OK to have such a lifestyle business? Of course it is, as long as one then also accepts that the business will not be sustainable beyond the entrepreneur or family.
For all other businesses, the issue of sustainability is not really an option, as the business is not only that of the owner, but is an important part of the lives of employees, customers, providers and even communities. Once we accept this simple reality, it is abundantly clear that we have no choice but to think and act in a manner that extends beyond simply making profit. If this is so obvious, why do we see so much evidence of enterprises for example destroying the environment, or transgressing safety regulations? It is in simple terms the unbridled chasing of profit, mostly based on personal greed, that allows people to justify such actions so as to maximise profit.
As a businessperson, this is your choice. Do I have a lifestyle business or a business beyond myself? If it is a business beyond myself, am I willing to accept that I may have less personal wealth in order to build something sustainable, not only for myself but also for a range of stakeholders? Someone once said “our children do not inherit the world from us, but we borrow it from them”. Please go back to the first conversation about personal purpose, and reflect again on the questions posed there. In the next article, we will explore how we think about the economic engine of our business to ensure sustainability. Again, I commit to being available to act as a “thinking partner” to you. My contact details can be obtained from The Overberg Business & Lifestyle Magazine who will connect us. There will be no fees for such conversations, and whilst I may not be able to give you quick answers, sometimes it helps to just have someone to bounce our ideas off.