John Mackey & Raj Sisodia: The Purpose of Business

Great companies have great purposes at their core. Into which of these categories does your company fit in?

Published: May 14, 2012 06:39:52 AM IST
Updated: May 11, 2012 04:37:42 PM IST
John Mackey & Raj Sisodia: The Purpose of Business

John Mackey & Raj Sisodia
The Men:
Mackey, founder of Whole Foods, is a college dropout; fan of Ayn Rand and Milton Friedman; vegan, yoga practitioner; made eating organic and natural cool. Sisodia, professor of marketing, Bentley University, infused the academic rigour to Mackey’s ideas on conscious capitalism. The two say that great purposes in business take precedence over all else.

The Oeuvre: An avid blogger, Mackey has been vocal about ideas close to his heart—libertarianism, conscious capitalism and organic food. Sisodia has co-authored several books like The Rule of Three: Surviving and Thriving in Competitive Markets. The duo is writing a book Conscious Capitalism.

X-Factor: Idealism meets pragmatism. The Message: A heroic company takes risks, perseveres in the face of enormous odds, and maintains and deepens its human qualities while doing so.

The Hypothesis
Just as certain humans set great purposes for themselves and eventually achieve greatness, the best companies in the world have great purposes too. They could choose to be good, true, beautiful or heroic.

So What?
You’ve got to figure out what you want your business to be. It could have one, or all of these purposes. Businesses that choose to be good are often found offering exemplary services that make the lives of their customers better. Those that choose truth, seek to improve the quality of people’s lives. For companies that seek to deliver beauty, they pursue perfection that it may eventually delight their customers. And finally, there are the heroic ones that aspire to change the world completely. To do that though, they have to demonstrate unusual moral courage and intent.

Business is no different than any other human endeavour. The same ideals that animate art, science, education, and politics can and should also animate business

There is no “right” purpose for every business. Each business must strive to fulfill the purpose that is within its own collective DNA. There are as many potential purposes as there are enterprises or organisations. Just as certain humans set great purposes for themselves and eventually achieve greatness, we believe that the best companies in the world have great purposes too.

Great purposes are more transcendent than others. They are highly energising and inspiring for all stakeholders. While great purposes have unique expressions at each business, we find it helpful to group them into a set of well-known and timeless categories. Business is no different than any other human endeavour. The same enduring ideals that animate art, science, education, and politics can and should also animate business. These were articulated by Plato as the transcendental ideals of the Good, the True and the Beautiful. Humankind has been seeking to create, discover, and express these transcendent ideals for thousands of years. To these, we have added “The Heroic” to complete a framework of higher ideals that we find most great businesses seek to express.

We define this purpose as “businesses or enterprises that are motivated by service and care of others.” Authentic service is based on genuine empathy with the needs and desires of others. Genuine empathy leads to the development, growth, and expression of love, care and compassion. Great businesses dedicated to The Good raise the emotional intelligence of their organisations so they nourish and encourage love, care, and compassion towards customers, team members, and the larger community.

While any category of business can be motivated by the deeper purpose of service to others, we find that service businesses that rely heavily on the goodwill of their customers are most likely to devote themselves wholeheartedly to this purpose. An excellent example is The Container Store, a US retail chain that sells a broad range of products and services to help customers better organise every aspect of their lives. The company uses the tagline “Get Organised, Be Happy.” Other companies that exemplify this great purpose include, Nordstrom, Jet Blue, Wegmans, Starbucks, Marico and Trader Joe’s.

The second great transcendent purpose that animates great businesses is “The True,” which we define as the “excitement of discovery and the pursuit of knowledge.” Think about how exciting it is to discover and learn something that no one has ever known before, something that advances humankind’s collective knowledge. This improves the quality of human life, lowers the cost of our lifestyles, and enables us to live healthier and more fulfilling lives.

This great purpose is at the core of some of the most creative and dynamic companies in the world today. Google is an excellent example of a company with this kind of purpose, expressed early on in the company’s history as “to organise the world’s information and make it universally accessible and useful.” This purpose statement is clear and simple yet profound. It makes clear why the company exists and how it creates value. It also provides company leaders with a great deal of strategic direction. Google started out simply indexing the web and allowing for fast searches of textual information. Over time, it expanded into books, audio information, video content, still images, personal picture collections, maps (recently adding indoor maps for shopping malls and airports), the skies, the ocean floor, medical records, your own desktop, company websites and so on, all the while remaining true to that original statement of purpose. Google makes virtually the entire knowledge of the world available to us whenever and wherever we want it. Intel, Genentech, Amgen and Medtronic are all examples of great companies motivated by the “excitement of discovery and the pursuit of knowledge.”

The third great transcendent purpose that we find at the core of great businesses is “The Beautiful,” which can best be expressed in business through “the search for beauty, excellence, and the quest for perfection.” While we more commonly experience “The Beautiful” through the work of creative artists, it can also be expressed through certain companies that have adopted this powerful purpose to pursue perfection in their chosen endeavour.

A great example is Apple, a company with a single-minded focus on creating “insanely great technology” that has made our lives better. The company creates products that customers love and have a strong relationship with. The beauty in these products is not just the value they create for us—it’s also in the simplicity and fun of the interactions we have with them. Companies like Bose, Four Seasons and BMW are other businesses that are motivated by excellence to create beautiful things and approach perfection.

The fourth type of purpose is “The Heroic,” describing businesses that aspire to change the world for the better. Of course, companies that pursue the Good, the True, and the Beautiful also change the world for the better. But Heroic companies often manifest unusual moral courage and specific intent in doing so; this is why we see this as a distinct category of purpose.

A heroic company takes risks, perseveres in the face of enormous odds, and maintains and deepens its human qualities while doing so, all in service of changing the world for the better in some tangible way. One of the best examples of a truly heroic enterprise is the Grameen Bank in Bangladesh begun by Muhammad Yunus. His heroic vision was to help end poverty and transform the world. Yunus likes to say, “Someday poverty will be something that’s only seen in museums.” Yunus’s heroic dedication to ending poverty in Bangladesh and throughout the world resulted in his winning the 2006 Nobel Peace Prize.

Great companies have great purposes. If your company aspires to true greatness, ask yourself how it can embody one or all of these great purposes. If it succeeds in doing so, it becomes a priceless gift to the world.

This article draws upon Mackey and Sisodia’s forthcoming book Conscious Capitalism: Liberating the Heroic Spirit of Business

Reading list
1. Ethics and Excellence — Robert C Solomon
2. Managing for Stakeholders — R Edward Freeman
3. Firms of Endearment: How World Class Companies Profit from Passion and Purpose” — Rajendra Sisodia, David Wolfe and Jagdish Sheth
4. Purpose: The Starting Point of Great Companies — Nikos Mourkogiannis
5. It’s Not What You Sell, It’s What You Stand For: Why Every Extraordinary Business Is Driven by Purpose — Roy M Spence Jr and Haley Rushing

(This story appears in the 25 May, 2012 issue of Forbes India. To visit our Archives, click here.)

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