- There is a myth that businesses are run basically about making profits. The truth is that businesses are run basically about adding value to customers and clients with an emphasis on ethics.
- When you look at entrepreneurs including Steve Jobs, Richard Branson, Bill Gates, Jeff Bezos, and Elon Musk, they started their businesses with fire in their bellies.
- They did not start businesses with the sole intention of making money. They wanted to impact and make a difference in society.
For them, passion is more important than profit, the purpose is more important than profit, and people are more important than profit. Steve Jobs was passionate about technology and founded Apple which changed the lives of the people globally.
A Global Shift in the Business Philosophy
“The idea that business is about maximizing profits for shareholders is outdated and doesn’t work very well, as the recent global financial crisis has taught us. The 21st Century is one of ‘Managing for Stakeholders.’” —R. Edward Freeman, Father of The Stakeholder Approach
Previously the business philosophy was ‘customers first and employees second.’ Currently, the business philosophy is ‘employees first and customers second.’ In my award-winning book, 21 Success Sutras for CEO, I implored the business leaders to adopt the philosophy of ‘employees first, customers second, and shareholders third.’
When employees are respected, they are motivated leading to improved productivity and performance. They add value to the customers and clients leading to improved organizational bottom lines. Satisfied customers and clients bring more business to the organizations leading to improved shareholders’ value. This philosophy works well especially in the post-coronavirus world and in the future world. Therefore, organizations must consider adopting this business philosophy.
The ‘4 Ps’: Passion, Purpose, People, and Profit
“The future of business is not really just being able to make a living for people, and make more money, and go public, and all those kinds of things. But it’s actually the possibility to make a difference in the world.” —Eileen Fisher, Founder, and CEO of Eileen Fisher
Keep purpose as an end-product and profit as a byproduct to excel as an ethical and inspiring entrepreneur. When you keep purpose over profit, you succeed in the long-term. When you keep profit over purpose, you succeed in the short-term but you are tempted to cut corners to survive in the business. With the changing times and technologies, it is ideal to shift the focus from profit to purpose and from profit to people. As individuals search for meaning, the organizations must search for meaning by emphasizing passion over profit, purpose over profit, and people over profit. To summarize, keep passion over profit, keep purpose over profit, and people over profit to excel as a successful entrepreneur and make a positive impact in society.
Explore the Business Philosophy of ‘4 Ps’
“Passion is like the electricity in the car, but purpose is the direction that the car is driving. You need the passion. You need to be passionate about purpose, otherwise, the car won’t get going. But you also need to know where you are going, and what you are trying to achieve.” —Debbie Haski-Leventhal, Professor of Management and CSR
Money is finite while human resources are infinite. Elon Musk’s global wealth ranking fluctuates every day based on his decisions and comments on Bitcoin. When businesses are run by passion, purpose, people, and profit in the pecking order, they achieve short-term productivity and long-term performance. It is ideal to follow 4Ps in the pecking order—passion, purpose, people, and profit to build a business world that is ethical, encouraging, and inspiring. To conclude, entrepreneurs must identify the biggest global challenges and explore solutions to resolve them with a business philosophy of ‘passion first, purpose second, people third and profit fourth’ to build a better world.
“Who are businesses really responsible to? Their customers? Shareholders? Employees? We would argue that it’s none of the above. Fundamentally, businesses are responsible for their resource base. Without a healthy environment, there are no shareholders, no employees, no customers, and no business.” —Yvon Chouinard, Founder of Patagonia
Written by Professor M.S. Rao, Ph.D
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