Kevin W. McCarthy

The Professor of On-Purpose

Business

Business Purpose – Noble or Not?

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Ask the average person why a business exists (purpose) and the typical response is, "To make money or a profit."  That is a truthful, but incomplete and narrow view based solely on the economist’s perspective.  Economics is but one science or discipline of study touching business and touched by business.  Unfortunately, this popular viewpoint often casts business in a negative manner – seeing the glass half empty.  In fact, business is so much more.

Business is also an institution of society and plays a specific role of service, continuity, scale, and sustainability.  It is through the profit motive that prices actually fall, not rise, and standards of products and services rise.  Business people seek competitive advantage most often on these two fronts.  Who wins?  It is the buyer in the marketplace who wins.

Business is also a free enterprise phenomenon so one must also see it in context of government.  Absent a free market economy supported by a government, the role of business is owned by the ruling power, be it communism or monarchy.   I’m proud to be a capitalist because I understand that capitalism and a free society are interdependent. 

Very simply, a business is an integration of economic, social, and political realities to name but three of the core disciplines at work.

As a huge advocate of the nobility and
creativity of business, let’s embrace a robust understanding of
business rather than a one dimensional economic view only.  The On-Purpose Business perspective says a business exists to serve in both a social and economic role within the context of a government freeing individual pursuits with a system of checks and balances.

Here is a rather heady discussion from a You Tube video on the "nobility of business"
from the World Economic Forum. It is nearly an hour long and has a rich panel discussion.  Enjoy! 

Please feel free to comment.

 

Business Strategy > Corporate Culture > Branding

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Let’s connect the dots today on three aspects of your business as mentioned in the title of this posting.  Over the years, I’ve been amazed at how compartmental I find these "functional areas" are in most businesses.  Let’s break the code on the "functional areas" and put it in terms of people.

  • Business Strategy is code for "Senior Management / Shareholders."
  • Corporate Culture is code for "People" inside the business or "Administration, Operations, and Sales."
  • Branding is code for "Customers" with experience with the company’s service and products. 

Senior Management is responsible for writing business strategy plus creating and supporting a corporate culture to execute the strategy.  In turn, the customer experience is a direct result of the output of the corporate culture.  Alignment of all three "functions" isn’t simply a matter of putting together gears in a wheel.  The physical stuff needs to happen for sure, but that’s the easy part in reality.

Business is all about the people.  The true challenge is getting the people aligned, communicating, similarly motivated, and prepared to perform their jobs with excellence.  Unfortunately, I’ve watched a "Fake it ’til you make it" approach of branding ourselves into the appearance of alignment.  Marketing is asked to fix a world of sins within the company by portraying the company as something it isn’t able to deliver.   This short-lived approach can actually produce results and fool the customers and team into believing they’re something they aren’t – successful.

Eventually, the hypocrisy emerges.  High integrity people realize the problem and attempt to fix it in their functional area of authority.  Unfortunately, the addiction to the quick fix has set in and so begins the battle between the long term thinkers and the short term performers. 

Who wins?  Nobody wins because the house is divided. 

Whose fault is it?  Senior management is ultimately to blame because they set the corporate culture in motion, they have the authority to fund and fix the necessary changes to bring integrity to the system.  This alignment pays dividends and makes the flywheel of success spin effortlessly and profitably.  If management hasn’t done their job then the entire system underperforms.

Sadly, the battle is most often won by the short term, numbers people, who milk every penny out of the system that steadily kills the golden goose. A subtle, but significant series of departure begins.   The people with true integrity battle within their functional area for doing right.  Dependency on short term cash flow builds to such a degree that the situations become so desperate that the "only option" is the short term fix.  In time, the people taking the high integrity approach depart frustrated because they’re unwilling to continually make and fail to keep promises to co-workers and customers.  As the people of low character "win," the company grows disreputable over time and falters.  Like rats on a ship who ate away at the very rigging that holds it together, the rats jump ship in droves to work their "magic" somewhere else.

So what’s the solution?

[Read more…] about Business Strategy > Corporate Culture > Branding

The Purpose of Business

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Ask the average person why a business exists and they will tell you "to make a profit."  Ask the typical business person about the purpose of a business organization and my non-scientific surveys at my speaking engagements tell me just over half the people in the room will say the same as the general public.  But are they right?

Yes and no, mostly no!  In the pure terms of the science of economics, yes, the purpose of business is to make a profit.  This narrow, limiting view of business is one dimensional and ignores the essential role business plays in society.  It is much like saying the reason teams play baseball is to obtain the highest score.  It is a truthful statement, but a woefully inadequate explanation.  It misses the larger context of relationships, play, exercise, learning, and self-understanding.  There is so much more to business than simply making a profit. 

Business is a political, social, economic entity essential to the progress of a society.  A society with a thriving business community is one of higher living standards across the population.  If a few are being enriched at the expense of others, then the living standards of the society are relatively diminished, e.g. see dictatorships and the communist system.   The great industrialist Henry Ford understood this as he paid the highest of wages in his day so Ford Motor Company workers could afford to drive what they built. 

The role of business in society is more than pure economics.  The profit motive enables the creation of wealth and the lowering of costs.  Any salesperson will tell you a lower price is a significant advantage to making the sale.  Business is actually in the business of lowering costs to society and raising the benefits and standards of living.  Business improves living conditions because goods and services become more affordable for more people.

For example, the computing power of my Apple MacBook Pro sitting on my lap as I type this puts at my fingertips more capacity than NASA had to launch the Apollo rockets that went to the moon and back.  Their cost was in the hundreds of millions of dollars and their equipment occupied rooms that were supported by massive cooling systems.  My laptop cost under $2,500 and weighs less than seven pounds and merely warms my thighs. 

Business lowers the costs of medicines, durable goods, technologies, arts, services, utilities, food, and so forth because businesses seek a pricing advantage over their competitors.  Businesses also provide jobs, places of lifelong learning, creative expression to ideas, and service to mankind.  The confluence of all these elements is riddled with risk and complexity.  It isn’t easy to succeed in business.  The failure rate of businesses is ample evidence.

For all the good business does, there are still a few bad apples (not the computers) that spoil it for the rest of us who are making a difference.  So what is the purpose of a business organization?  "To make a profit,"
is the naive, yet most popular response.  The correct answer: business
exists to serve.

Be On-Purpose!

Kevin

 

Profile: St. Lukes Cathedral Church, Orlando, FL

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Cathedral
Can a church be on-purpose? 

The Very Reverend Anthony P. Clark and I worked together to articulate the Purpose, Vision, Missions, and Values for this Downtown Orlando church. 

Purpose: Revealing Majesty

Vision: Shaping Living Stones

Missions:  Gather, Heal, Send, Renew

Attached is Pier Review, a publication by St. Luke’s Cathedral Church (pictured to the left). Beginning on page 2 is a more in-depth article by Dean Clark about being an on-purpose church.  You’ll also see that the cover article is about being on-purpose as well.

Yes, a church can be on-purpose.  The purpose statement for St. Luke’s requires a bit of historic perspective.  During the Dark Ages when many of the world’s great cathedrals will built the goal was for the common person to draw inspiration from the majesty of Christ.  These buildings were to be modest reflections of God’s glory despite their scale and beauty.  Here the average person could begin to get a sense of who God is.  While the physical presence provided a visual message and statement, it was truly the intent of the designers to stir the hearts of worshipers as to the overwhelming greatness of God and his love for them.  It seemed only natural then that Dean Clark seized upon such a powerful and meaningful articulation of a purpose statement like: Revealing Majesty. 

Please download and read the articles to learn more.

Download pr_june.pdf

Time Management: Myth or Missing Link

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Too much to do and not enough time to get it all done.  For most of us that means it
is time to turn to time management.  Courses and seminars in time
management, software packages, PDAs like the Palm, and good old
fashioned daily planners like a DayTImer, Franklin Covey Planner, or Day
Runner, all hold great promise to help you get your life on track.  And
they do!  Kinda.  Mostly.

Time management is a smokescreen masking an underlying
problem.  Sure time management systems allow you to manage events, set priorities, plan your day, and schedule your appointments.  But are you making progress in life or are you just moving around meetings and activities?  Have you just become more efficient at being ineffective?

Solve the underlying challenge of why you need time
management and your time management problems narrow significantly.  In the end, it isn’t the tools and technology or time management that make a difference.  It is you!

[Read more…] about Time Management: Myth or Missing Link

Profit-Making On-Purpose®

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I will be the keynote speaker at the Chamber’s event.  This event is open to the public. 

When: Friday, June 6, 2008, 8:00 AM to 9:30 AM
What: Seminole County (FL) Chamber of Commerce Small Business Breakfast
Topic: Profit-Making On-Purpose®