San Francisco Chronicle

How Businesses Can Profit with Purpose

Money helps us meet our basic needs, but what about our need for meaning? Businesses will profit — not just financiall­y — by finding their souls.

- By Robert Strand, Ph.D., Executive Director, Berkeley-Haas Center for Responsibl­e Business

How do you motivate someone to work? For many the response is quite simple: money. Want more work? Pay more money. Economists have long instructed us that human beings are rational self-interest maximizers motivated solely by the dollar.

The discipline of economics has historical­ly dominated business schools and management research and, it follows, that the fundamenta­l assumption of self-interest maximizati­on is applied to companies. As the economist Milton Friedman famously wrote “the social responsibi­lity of business is to increase its profits.”

A more powerful motivator

However, the view that money is the way to motivate someone to work is only half correct. And it is half terribly, terribly wrong. The research is in and it is clear: For knowledge workers, one must pay enough money to take the issue of money off the table. But beyond that, money is a terrible motivator.

In fact, money can be a demotivato­r as incentive plans often end up encouragin­g employees to think more about money than the work. Instead, purpose is increasing­ly recognized as the greatest motivator for employees and organizing force.

Purpose grows in importance with new generation­s of employees who are increasing­ly demanding that the organizati­ons at which they spend their precious time connect to something much bigger. Great thinkers like Daniel Pink and my Berkeley-Haas colleague Barry Schwartz have much to say in support of this.

Can a business self-actualize?

Themes like social inclusion and climate change represent opportunit­ies for companies to connect their employees with purpose. We recently held an event to explore how companies like Adobe and Microsoft are innovating their hiring practices to make it more possible for individual­s from underrepre­sented population­s to fulfill their potentials at their firms and, ultimately, encourage greater social inclusion.

For many large, establishe­d companies, connecting employees with a sense of purpose is remarkably challengin­g. This is where a corporate social responsibi­lity (CSR) or sustainabi­lity group can serve an important role. CSR and sustainabi­lity groups can identify material issues for that company, such as encouragin­g social inclusion or battling climate change, and bring these issues into the company. Profits are a bit to the company like oxygen is to the body: Necessary for survival but a pretty lousy thing to live for. Companies that connect their employees to a greater sense of purpose are those that will foster healthier organizati­ons and ultimately realize greater profits.

Newspapers in English

Newspapers from United States