The truth about purpose

I’ve been seeing increasing grumpiness coming from the internet lately about purpose—usually in the form of a straw man or red herring.

Some common objections and misconceptions

• Purpose is a new (and odd) fad
• Purpose is something you can declare without having to take meaningful and difficult steps to live it
• It’s just aspirational (someone has got to tell me why people think it’s ok to use “aspirational” as a pejorative)
• Purpose is about altruism—and therefore not relevant to commercial enterprises
• It’s only real if done with purity and perfection
• Purpose by itself won’t solve all your problems
• It’s called work for a reason!

To be fair, the corporate world gives people many reasons to be skeptical or grumpy about purpose. Many companies seem to approach it as nothing more than an advertising or PR campaign. (Hint: they’re wrong.)

And yeah, purpose is becoming a buzzword.

And it can feel quite good to skewer the latest fad.

But still, the idea that work should be meaningful, rewarding, and connected to our personal values holds a lot of promise for the world. Yes, companies and their ad/PR agencies are often getting it wrong—perhaps willfully. Yes, there are many cynical attempts to appropriate the concept of purpose for mere reputational gains.

But let’s not let a desire to be the most clever snarky “thought leader” on LinkedIn get in the way of progress. Purpose and values are far too important. This is not a moment for smug self-righteousness; it’s a moment for us to bring more clarity, more reason, and more aspiration (yeah, I said it!) to help those that aren’t quite getting it right yet.

So here is my first attempt to set straight some of what I think folks have gotten wrong about purpose. This doesn’t address all of the myths and misconceptions I’ve seen lately about purpose. But it’s a start.

I’ve been thinking about the default belief people hold about the purpose of a company. For most people, that seems to be something akin to Milton Friedman’s nearly 50 year-old doctrine that the purpose of a company is to generate profits—and explicitly not to engage in social causes beyond staying “within the rules of the game”.

Leaving aside the nuances of Friedman’s argument, which are worthy of a considered debate, I think we might find here the grounds for a response to the skeptics.

1/ Purpose is not an odd fad.

It is quite an old and mundane idea. It simply answers the question “what is the primary responsibility of our organization?” Friedman’s answer was “to make money”. Many people believe our responsibility goes beyond that.

The desire for meaning in our lives is not new. And if it feels new in the domain of work, then so be it. It’s a sign of progress. Many wonderful things we have in our lives today were new at some point. Like freedom, penicillin, and salted caramel.

I would argue that people have always wanted to find meaning in their work but that unfortunate conditions of human history got in the way. The desire for purpose seems to me a timeless quality of human nature. But if you experience it as something new, fine. Think of it like you think of penicillin—a wonderful invention, a testament to human ingenuity, and a way to make our lives much much better.

2/ A business cannot exist simply to make money.

The argument that a business exists only to make money essentially assumes that the owners of the business are indifferent with respect to how they make money so long as they remain on the right side of law and ethics. This is a dubious argument at best; I’d put the burden of proof on those advocating this position versus those advocating that a business ought to have some higher purpose.

Also, this profit-only argument fails to provide an account of the choice to enter or remain in a particular industry or profession. But that is a critical choice everyone makes—even if they don’t experience it as a choice. When faced with the claim that Company X exists to make money, I ask “why are you choosing to make money in this particular industry, profession, or company?” Not everyone has an answer to that question, but the absence of a considered answer is not a valid argument against the value of purpose.

Let’s consider what Friedman wrote:

“In a free-enterprise, private-property sys­tem, a corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose for exam­ple, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.”

[Let’s just take a moment to enjoy that word “eleemosynary”. I had to look it up too. Delightful isn’t it?]

All of this begs the question: What are the desires of a company’s owners? I doubt very much that most people’s professional ambition starts and stops with making money. Nearly everyone I talk to wants their work to make a positive contribution to the world. Many don’t exactly see how that’s possible, but most people want it. And I doubt that most shareholders would say they don’t care at all what impact their investments make on the world so long as they make a good return.

The problem with the purpose equals profit argument isn’t that profit is unimportant. The problem is that this tells only part of the story—those of us who care about purpose and values want companies to tell the entire story. (And then live it.)

3/ Any purpose – even a profit-centric purpose – is only as good as the actions taken to make it real.

Even within the prevailing paradigm that corporate purpose is entirely about maximizing shareholder value, companies often fail to fully live their purpose. They make smart investments that don’t pan out; they make obviously stupid investments; they take actions that don’t seem to have a direct or indirect link to financial value creation; they make pronouncements or forecasts that are just empty promises.

Simply put, people aren’t perfect and so the organizations they create aren’t perfect.

Holding pro-social purpose to a higher standard is unfair. Those that hold this double standard should be asked to explain why, not the other way around.

4/ People are people. Yes, even at work.

Friedman separates people into their capacity as executives working in service of the company’s owners (agent) and their capacity as people in their own right (principal). In this view the shareholders of a company, insofar as they are shareholders, want nothing more than profit maximization, whilst as individuals they may then want to use those profits to advance their perceived social responsibilities.

This bisection of a human being into work-self and personal-self is, in my view, a dangerous falsehood. Dangerous for employers who need to hire young people—who are increasingly demanding that they be able to bring their whole self to work. (Hint: I’m nearly 50 years old and I want this too!) And dangerous for the emotional and spiritual wellbeing of anyone who represses who they truly are at work under the misguided belief that what they do or don’t do at work has no bearing on their character as a human being.

It has long seemed to me that this conception of humanity is an unfortunate by-product of the industrial era. I’m quite sure it is not a law of nature that we must forever obey.

When we work at or invest in a company, we do so not as some mythical creature called “employee” or “investor”. There is no such thing as an employee or investor. We work and invest as human beings. You do not get to be evil or indifferent and hide behind the label “employee” or “investor” as if those personas are not you.

Many of the arguments against purpose seem to imagine the business world as a parallel universe to the world in which we live our lives. Consider statements like “it’s not personal, it’s just business”.

Frankly, it’s absurd that people who denigrate purpose as some hippie-dippie concept are perfectly willing to conjure up an imaginary world called the “business world” and play a strangely childish game of make believe: that what happens in the “business world” can be totally separate from what happens in the other world—the one where our families and friends live, where we have values we care about, where we have civic responsibilities that we pride ourselves in fulfilling.

Here’s some hard truth folks: We get one world.

Doing business in a way that doesn’t reflect your personal values, that doesn’t honor human dignity and elevate humanity, that doesn’t leave our world better than you found it, out of a sense that you’ll make up for what you do or don’t do in the “business world” with what you do in the real world, is crazy. It’s every bit as crazy as trying to justify being an asshole to someone by saying “it’s not personal, it’s just business.”

And they say purpose is some weirdo new-age idea!

People who work at or own a company (i.e., shareholders) have an obligation to define a purpose that resonates with them as human beings. One world. One life. Live it well.

This is my very elegant segue to a conclusion

I’m not mystified by the skeptics and detractors of organizations defining some sort of higher purpose. I recognize this is a change. (Actually, that’s the whole point.) And people often have a tendency to resist change.

But I find it unfortunate that so many people take a profit-only view of company purpose as axiomatic. Unfortunate because it flies in the face of the profound human yearning to make a positive difference and to leave the world a better place for the generation that follows.

It is for this reason that I am inspired by those doing the work to make work more human, more meaningful, more sustainable, and more joyous.

Let’s encourage more of this. Purpose matters too much to be abused by the cynical or dismissed by the smug.

Happy new year!