Profit, or purpose? Why money can no longer be business's only goal
Throughout history, businesses have overwhelmingly focused on profit. And some paid little attention to how they did it. But in today’s interconnected society – where preserving the planet we live on is an increasingly pressing issue – making money can no longer be the only goal. Marion Debruyne, Dean of Vlerick Business School, explains how businesses can strike a balance between profit and purpose.
Society wants businesses to be a force for good. And unlike previous generations, they’re able to go online and directly see the impact that organisations have. This means that businesses can be held to account like never before. Smoke and mirrors tactics are out. Honesty and transparency are in.
So today’s organisations have to think beyond protecting their shareholders’ financial interests. They now have to consider all stakeholders they have an impact on. To be able to do this effectively, leaders must ask themselves – what’s our purpose? What role do we play in society? What can we contribute? And how do we make all of this central to our strategy?
Europe is leading the way
These are important questions for businesses worldwide to answer. And European businesses in particular are leading the way in being purpose driven.
A major driver behind this is the EU. It’s determined to strike the balance between profit and purpose – and persuade the businesses that operate within its borders to do so too. In 2020, the EU launched the European Green Deal – which aims to make Europe the first carbon-neutral continent by 2050. It includes a number of policies that push organisations to think about how they tackle the challenges facing society.
Consumers are making their voices heard too
Clearly, the EU isn’t afraid to take on companies that aren’t striking the right balance between profit and purpose. But there are other factors affecting the shift to purpose-focused business too – including consumer behaviour. Increasingly, consumers are making purchasing decisions that reflect their values. And now more than ever before, they have information about a company’s ethics at their fingertips.
So how can organisations get the balance right?
A business can’t survive without profits – and clearly, CEOs keep a close eye on company performance. But this should be combined with a strong purpose and a desire to make a positive contribution to society.
And this takes work. Sustainability needs to be embedded throughout an organisation and at the heart of its strategy. And of course, everyone who works in the organisation needs to live and breathe its purpose in all that they do. It’s not enough to shout about your purpose in your marketing activities. It needs to be reinforced in the way you work. Because in the information age, a company that is talking the talk, but not walking the walk, will soon be found out.
Building skills, changing mindsets
Becoming a purpose-driven organisation often requires a shift in approach and activities. And it almost always relies on the organisation’s people developing new skills and gaining new knowledge.
At Vlerick, we want to empower ambitious professionals to become the next generation of European business leaders. And we want them to have the knowledge, skills and mindset to make a positive impact on their organisation – and our world as a whole.
The European Executive MBA at Vlerick, a management programme that puts sustainable business practices in the spotlight, is a highly flexible, hands-on learning journey that takes participants to some of Europe’s most innovative and purpose-driven cities and companies. It helps them develop the skills and mindset they need to help their organisation strike the balance between profit and purpose. If you’d like to learn more about Vlerick’s European Executive MBA, take a look at the website, or get in touch for more information.