Positing that “the social responsibility of business is to increase its profits,” Milton Friedman’s 1970 treatise in the New York Times ushered in an era that persisted for more than 40 years, influencing a generation of business leaders to believe that maximizing profit should be the only business of business.
While that view of the sacred primacy of shareholder value started to change in the 1990s, the concept of “business as a force for good” has really gained momentum in the last decade or so. Whole Foods Market’s John Mackey and business professor Raj Sisodia helped popularize “conscious capitalism,” which focused on the idea that conscious businesses balance pursuing profits with “higher purposes that serve, align and integrate the interests of all their major stakeholders.”
In 2019, the Business Roundtable adopted a new “Statement on the Purpose of a Corporation.” The CEOs of many of America’s largest companies signed the statement, declaring that companies should deliver value to all of their stakeholders—which includes not just shareholders but also customers, employees, suppliers and the communities in which they operate. In the years since the reversal of its 1997 statement, there has been much debate over whether it has been anything more than empty rhetoric.
“Business as a force for good” was the first of seven statements of purpose we created when I founded my company in 2006, and it’s an important part of why we embarked on a recent research study to help us answer probing questions about the changing role of business in our society and employee expectations in the workplace. Given all that we’ve been weathering in the past two years—the global pandemic, societal unrest and polarization, stress, burnout, staffing shortages and the ongoing “Great Resignation,” we wanted to understand what employees expect from their organizations and how those companies are measuring up.
Our research findings are clear: When it comes to “business as a force for good,” we have reached a tipping point that cannot be dismissed as a momentary response to a crisis or some pollyannaish slogan. An overwhelming majority of business executives, HR leaders and knowledge workers we surveyed expect their employer (76%) and business in general (77%) to be a force for good. Indeed, the just-released 2022 Edelman Trust Barometer reports that societal leadership is now a core function of business.
Part of what makes these force-for-good findings so compelling is how broadly aligned employees are relative to these expectations. We found that more than 70% of respondents from every company size, region of the country, age group and virtually every business function—from customer service and operations to finance and IT—expect business and their employer to be a force for good. That includes respondents from companies with less than 500 employees as well as those with more than 10,000. Edelman found that “across every single issue, by a huge margin, people want more business engagement, not less.” And a McKinsey & Company survey found that 72% of respondents believe purpose should receive more weight than profit.
What exactly do we mean by business as a force for good? We found that employees—including company leaders and knowledge workers—want business to be a force for good in three dimensions: They want business to be a force for good for “me” as a person, by actively investing in their well-being, reflecting their values and helping them flourish in mind, body and meaningful impact. They want it to be a force for good for “us” as an organization, by creating and sustaining an effective workplace culture. And finally, they want it to be a force for good in “the world” by stepping up, encouraging dialogue, speaking out and making a real impact through their leadership as a business leader on societal issues.
Don’t get me wrong. The last thing I want in discussing business as a force for good is for people to think that I stand for business not being good at business. My company specializes in building effective organizations where both the business and the people thrive. If you ask me which is more important—the business or the people—my answer would be both. You cannot have a thriving business without thriving people. And you can’t have thriving people without a thriving business.
The good news is that what employees want and expect is largely aligned to what is essential for businesses to thrive, and the opportunity to create deeper and more mutually aligned relationships in our organizations has never been greater. In an environment where the pervasive narrative is telling us there is so little we agree on, the compelling mandate that business should serve as a force for good is incredibly promising.
This article is the first in a series that explores business as a force for good in all its dimensions. Next up: What does it mean for business to be a force for good for “me” as an employee—and why are company values so important? Getting this answer right is central to winning in today’s unprecedented war for talent.