Prosperity is the new profit
First things first. Let’s stop portraying ‘profit’ as a dirty word. It’s ludicrous to hear people denounce companies by saying, “They’re just trying to make a profit.” Of course they are. They are a business. It’s how they survive and grow. And, hopefully, share that profit with everyone responsible for helping generate it.
Now I agree that there are times when profit can feel ill-gotten. For example, when people are in financial straits and we peddle title or payday loans. We can argue that they are valid financial tools, but for someone living paycheck to paycheck, it feels pretty predatory. There’s no defending this. But there’s also no defending the demonization of all profit. Besides, if we do, we cloak the real problem.
Profit and the problem
Ideally, a company operates well and generates a profit. It then uses that profit to reinvest to continue to advance. That reinvestment has the potential to benefit the company, the employees, and the community. It’s a good theory. One that has even been proven to work in the past. Yet somewhere along the way, things got out of whack. Economist William Lazonick gives us an insightful explanation in a Harvard Business Review article.
"From the end of World War II until the late 1970s, a retain-and-reinvest approach to resource allocation prevailed at major U.S. corporations. They retained earnings and reinvested them in increasing their capabilities, first and foremost in the employees who helped make firms more competitive. They provided workers with higher incomes and greater job security, thus contributing to equitable, stable economic growth—what I call “sustainable prosperity.
This pattern began to break down in the late 1970s, giving way to a downsize-and-distribute regime of reducing costs and then distributing the freed-up cash to financial interests, particularly shareholders. By favoring value extraction over value creation, this approach has contributed to employment instability and income inequality."
This could explain stagnant wage growth, lack of employee loyalty, and a whole litany of challenges facing the world of work. The most confounding thing about this is how shortsighted it is. If the average joe doesn’t participate in the spoils of this success, then he eventually pulls back his spending. We live in an economy that relies on the ability of us all to spend. If we don’t spend, then the companies suffer. And there’s even less of a chance for those organizations to share any profit. It’s a downward spiral. But if companies focus on prosperity, then everyone shares in the gains. Which mean people can spend and companies can do well. In contrast to the downward spiral, it creates a virtuous circle.
The point is that profit is not the problem. It’s what the organization chooses to do with that profit.
Giving profit a purpose
We need to switch out profit for prosperity.
Profit is an inward focus. Profit is something we generate by how we manage all the variables associated with our offering. It minimizes the role of your potential believers (outside the company) have in the equation. Oh, you may refer to them as “partners", but it really is not much more than them being a partner in helping you achieve your profit goals.
Prosperity, on the other hand, is how we all benefit together. It goes back to the old cliché, “A rising tide lifts all boats.” This is not a call to abandon capitalism. This is very much about the business doing well. But it is rooted in the idea that a business can do well by doing good.
Here’s what I mean. Your believers purchase from you to receive the goods and services and all the benefits, but there can be something more. There can be the feeling that they are contributing to the Big Audacious Meaning the brand has embraced. In purchasing, they become collaborators in helping work toward the real and meaningful impact the brand will have for everyone. In other words, the prosperity of us all.
The brand can become the catalyst for prosperity. And we all can become more than fans. We can become that special breed that invests both its dollars and its passion. We can become collaborators. Collaborators in creating prosperity for all of those around us.
Protecting ourselves from ourselves
A focus on prosperity begins with defining and pursuing our Big Audacious Meaning. A Big Audacious Meaning is built on a commitment to serving those around us to make a difference in a life, a community, or even the world. Our primary focus isn’t on ourselves. We are driven by the needs of those we serve. And we believe our profitability is tied to helping make a difference for those around us.
The reason this works is because it protects us from us. How many times have we seen or heard of organizations making questionable decisions because of a myopic, profit-at-all-costs focus. When we are pursuing a Big Audacious Meaning, we prime everyone to be making better decisions. Because we are all focused on prosperity as the desired outcome - not just profitability.
The power of prosperity
It would be easy to dismiss this as a naive notion. To characterize it as nothing more than wishful thinking. Except, there are organizations that have embraced prosperity. And you know what? They’re profitable. In fact, they outperform their peers. The examples range from Dove to Whole Foods.
I’m no economist. But I have been in the business world for more than three decades - and I’m a cofounder of a successful small business that was started before the turn of this century. This isn’t some altruistic opining from someone who has never been in the trenches. Or who has never had to make gut-wrenching decisions that business owners have to make.
I’ve seen first hand what you can do when you generate a profit. I’ve also seen what happens when you focus on prosperity. I’m here to tell you that generating prosperity is more powerful. It’s not a question of sacrificing profitability. So let’s quit using that as an excuse. Profit is a reliable outcome of organizations who are genuinely pursuing prosperity. Again, look at any of the progressive companies that are proving that.
But beyond profitability, a focus on prosperity delivers a host of other benefits that validate that it’s the future. It helps the entire organization make better decisions. It ignites the passion of everyone from our team members to our prospects and customers. It makes all our believers feel like they have a stake in the success of our efforts. And more.
This is the power of prosperity. And the power of its catalyst – a Big Audacious Meaning. It makes you successful by making all us successful.
Dan Salva is a co-founder of Will & Grail, with more than three decades of experience in brand marketing and developing and implementing go-to-market strategies. He can be reached at firstname.lastname@example.org.