What is true wealth in business?Balancing profit and positive change
Money. Profit. Shareholder Value. Wealth. The financial mission is as paramount in business today as it ever has been and drives key decision making. After all, wealth, by definition, is “an abundance of valuable possessions or money” – the dream many certainly seek to achieve and which we generally believe will make us happy.
Yet wealth and happiness don’t necessarily go hand in hand.
New thinking in the science of happiness suggests that happiness can be achieved by relating well to others, giving, exercising, and staying healthy, appreciating what we have, trying out new things, having a sense of direction, being resilient, accepting our situation rather than stressing about what it could be, and gaining meaning from what we do.
Wealth enables us to achieve these things, but it is possible to be happy without being very wealthy while it is also possible to be wealthy at the expense of our own and others happiness.
As leaders, is our mission therefore to acquire wealth for ourselves and our shareholders, or is it more than that? If we consider wealth as an enabler for positive change, social value and general happiness, the way we acquire wealth is as important as what we do with it.
Indeed, true societal wealth means a lot more and goes a lot further for all of us, including generations yet to come. It therefore seems reasonable to assert that targeting the wealth of humanity through benevolence and thoughtful action today will lead to a much better tomorrow, when compared to a narrow-minded focus on just the bottom line.
Do I have to sacrifice financial wealth for societal health?
Although social value is important, it cannot be achieved without a healthy consideration of profit. Social value and profitability are not mutually exclusive and are in fact dependent on each other. Social value for example, has many business-specific benefits, improving brand equity, customer loyalty, employee satisfaction and consequently, net worth. A purely purpose-driven business, deprived of profit, would not be able to follow-through with its mission, would be unable to adapt to the ever-changing markets in which they work, and ultimately, will fail.
Conversely, a profitable business can invest in their people, their processes and their products, improve the sustainability of their products, services and supply chains and justify the investment they need to make. As businesses thrive, they can support charitable efforts, increase job opportunities, and support their local communities. Therefore, both positive change and profit are symbiotic.
The delivery of social value in business is therefore about how we choose to operate now and invest for the future to deliver our services and products.
How can we maximise our social value contribution?
It starts with actions internally, with our people. Many actions cost very little, but the positive impact can be high. Treating each other with respect and kindness, showing we care about each other, our health, and our wellbeing, is a perfect starting point. Helping our people feel part of something, proud of what we do, provide opportunities to be involved in the bigger decisions, and enabling them to link their personal and professional goals, is good for them and good for our business. Doing so makes a better work environment and encourages everyone to be the best version of ourselves, excel at their work and thereby contribute in ways that we could not have imagined. As people grow professionally, we can encourage them to support others, choose charities, and provide space to volunteer their time.
We can consider how to support those who are disadvantaged in some way, such as those with disabilities or difficult personal circumstances, to grow within our business. We can provide valuable work experience and training to those who are new to our industry and give people a chance to learn as well as earn a living. In doing so, we can improve the diversity in our business, stimulate creativity and understanding and set a stronger platform for our business to adapt to the future and our customers changing needs.
We can ensure that social value is built into our supplier contracts, insist that partner organisations prioritise social value as much as we do and that ultimately all sources of supply are from those with similar goals. Buying from organisations who unreasonably extract excessive profits for their owners and partners, exploit their people, pollute the planet, and damage biodiversity is no different from doing it ourselves.
The cost of fossil fuels is now more representative of the impact its use has on our planet and we can now readily justify the investment in energy reduction initiatives and the use of greener alternatives. We can invest in workspaces that are highly insulated and energy efficient, allow remote-first working, encourage cycling, public transport or walking to work.
What will success look like?
Achieving true wealth goes deeper than the money in our pockets, it is possessing the ability to transform the prospects of the people we work with, our communities and our children, by taking care of each other and of our environment. Great businesses are great places to work, provide opportunities for diverse groups of people to grow and develop, providing services and products which can be delivered sustainably. Great business leaders will measure more than the wealth in their portfolios and bank accounts, they will feel wealthy from the positive impact on the people that they affect.
Ultimately, we will be judged by what we do today and how it impacts the future of our children tomorrow.
So what can we do for you?
Recognising the growing importance of social value, we are proud partners of the Social Value Portal, we are members of the Social Value Task Force, and are keen to make sure that social value is delivered, not just promised in nicely written documents.
We are procurement and contract management professionals who help the government to buy what they need. Consequently, we are also well-placed to help private companies to sell to the public sector and implement the services which have been specified. We are experts in the field, are members of the Association of Proposal Management Professionals and can help you increase your win rate.