What is Beyond Good Business?
Well, for a start its the name of a conference this month in London and the theme is more than familiar. Aligning profit with purpose.
When my late colleague shared his position paper online it questioned the purpose of business. His final paragraph began:
“Clearly, profits can be used very effectively in ways other than traditional investment and profit outcomes. Moreover, this is not charity, it is business — good business.”
Introduced to the UK social enterprise community in 2004 with a business plan, it had a message for government:
“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”
In an interview about efforts in Crimea, our founder explained.
‘The P-CED model is not a charity sort of operation. It is business. What we choose to do with profits is entirely up to us, and we choose before anything else happens to set most of our profits aside to assist poor people. In fact, our corporate charter requires us by law — UK law, where rule of law is very well established — to use our profits only for social benefit. We cannot do anything else with it.’
In 2007, we delivered a ‘Marshall Plan’ proposal to Ukraine’s government and it said this about the focus of profit:
‘An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.
That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples — the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.’
All of the above will be found in my article for the Long Term Capitalism Challenge — Re-imagining Capitalism — The New Bottom Line.
The response from the national social enterprise support organisation at the time was to say that this was beyond their focus. So it is now within their focus or has their focus overtaken it?
If it’s the same thing as we’ve been putting into practice for two decades, it begs the question — why weren’t we included?
Are they talking about “profit for purpose” or “profit with purpose”.
In 2009 both the Vatican and the UN General Assembly were describing as we had, how profit could be applied to resolve social problems, in a people-centred rather than profit-centred economy. Bernie Sanders gave his approval too.
What Pope Francis says and Bernie Sanders says, about children pushed aside was the primary focus of our work in Ukraine and it cost our founder his life, trying to leverage support.
The term “social enterprise” in the various but similar forms in which it is being used today — 2008 — refers to enterprises created specifically to help those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest. Put another way, social enterprise aims specifically to help and assist people who fall through the cracks. Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not.