Commentary - Making money is NOT a purpose. It is an outcome.
By Mitch Fine
For the first time in the history of life on our planet, a species has the ability to collectively choose whether we will succeed and thrive, or create our own destruction. A new way of thinking and behaving will be necessary for humanity to learn to live in harmony with the Earth and with each other. Rather than scrapping the dominant systems that comprise our societies, we offer the possibility that by combining the best parts of them, humans can create a truly sustainable way of living.
Corporations are the dominant institution of our time. They have evolved to pervade nearly every aspect of our lives. But a basic, philosophical distinction that should govern corporations has been overlooked. And that distinction is this:
Making money is NOT a purpose. It is an outcome.
Most corporations fail because they confuse this outcome with their purpose. Others invent a purpose that is not authentic and does not inspire stakeholders to adapt and innovate in order to deal with our most pressing global issues. A small but growing number of corporations do get it right though. And by focusing on a purpose that is not about making money, these organizations not only make a significant difference in issues of sustainability, but also are far more profitable than their contemporaries.
Not coincidentally, John Mackey, the Founder of Whole Foods Market, has spoken eloquently of this paradox by comparing a corporation whose purpose is to make money, with a person, whose purpose is to “be happy”. Mackey explains that the pursuit of happiness as a purpose for one’s life generally creates the opposite outcome. Happiness as an end in itself is essentially narcissism, which is not a trait that generates much happiness. Instead, for most people, happiness is the outcome of a life that is based on meaningful relationships with others, or a powerful sense of vision and purpose that results in the pursuit of meaningful goals and action.
Whole Foods Market is a strong example of this phenomenon. In 1985, Whole Foods Market created its "Declaration of Interdependence", which emphasizes a stakeholder philosophy. Walter Robb, Whole Foods Market co-President, details the company's core values: "The deepest core of Whole Foods, the heartbeat, if you will, is this mission, this stakeholder philosophy: customers first, then team members, balanced with what’s good for other stakeholders, such as shareholders, vendors, the community, and the environment. If I put our mission in simple terms, it would be, No. 1, to change the way the world eats, and No. 2, to create a workplace based on love and respect. We believe business should meet the needs of all the stakeholders, as opposed to operating it for shareholders."
CEO John Mackey describes how the stakeholder philosophy combines with capitalism: "We've always been unique in that we have a stakeholder philosophy, and it continues to guide us," Mackey says. "The beauty, in my opinion, of capitalism is that it has a harmony of interests. All these stakeholders are important. It is important that the owners and workers cooperate together to provide value for the customer. That's what all business is about, and I'd say that's a beautiful thing." When the company was founded, its purpose was not to make money but to focus on serving the needs of its customers in a unique and meaningful way, while consistently treating employees better than any of their competition, and serving the needs of the community and the environment. In sticking with this purpose, Whole Foods has provided shareholders with best-in-class performance. Indeed, there is no other company in the sector, and very few in the world, that have provided investment returns of 2,500% over the past two decades.
Whole Foods Market is not a perfect company and they are not necessarily the epitome' of Progressive Capitalism. But at a core level, the company has gotten its priorities right and the results are clear. If we are to solve the problems that we are faced with and create a world where we live in harmony with nature and with each other, corporations are going to have to "get it" about their purpose.
The Progressive Capitalist is a educational and advocacy website dedicated to the proposition that a sustainable future is only possible if we can combine "Doing the profitable thing" with "Doing the right thing". The Progressive Capitalist Facebook Page