We urgently need to reinvent capitalism from the inside out. The good news is, we can.
Over the years, I have developed—and put to the test again and again—an approach that lays out the architecture for a refoundation of business and capitalism. It builds on the wisdom received from Jean-Marie Descarpentries and many others along the way.
This approach is based on a seismic shift from profit to purpose: I believe that business is fundamentally about purpose, people, and human relationships—not profit, at least not primarily. Companies are not soulless entities. They are human organizations made of individuals who work together toward a common purpose. When that common purpose aligns with their own individual searches for meaning, it can unleash a kind of human magic that results in outstanding performance.
At the very top is a noble purpose. Purpose is the reason the company exists. A noble purpose, a term borrowed from Lisa Earle McLeod, is the positive impact it is seeking to make on people’s lives and, by extension, its contribution to the common good. That common good is the core focus of the company and is integrated in every aspect of what the company does. Business does well by doing good.
Employees—at the center—rally around the noble purpose, and customers profoundly relate to it. It becomes a guiding North Star against which strategy is formulated and every decision made and measured.
Purpose differs from the narrower ideas of corporate philanthropy or corporate social responsibility. A company’s reason for being can be found in this way: what the world needs, what we as a team are passionate about, what the company is good at, and what it can get paid for. This concept has inspired the four questions that Best Buy uses when considering new business ideas: Does it fit with our purpose as a company?; is it good for the customer?; can we deliver?; and can we make money?
A noble purpose is at the top of my framework. Employees stand at its center because the secret of business is to have great people do great work for customers in a way that delivers great results. Employees and the work they do cannot and should not be considered merely inputs, as economic theory would have us believe. No one wants to be an input. Doing great work starts when people feel treated like individuals—not human capital—in a work environment where they can thrive.
The architecture I am advocating has employees at the heart of business, creating and nurturing caring and authentic relationships both within the company and also with all of the company’s stakeholders—customers, vendors, local communities, and shareholders—in a way that not only contributes to the company’s purpose but also creates great outcomes for each of these stakeholders.
Doing great work for customers happens when employees relate to these customers as human beings, not walking wallets. It happens when employees, from the CEO to front liners, genuinely understand and care about what customers need and how they can best help them answer these needs. Delighting customers in this way is how love brands—brands that have built a strong emotional bond with their customers—are created, inspiring loyalty and trust. In order to do great work for customers and deliver great results, employees also connect and collaborate with vendors as partners. They connect and collaborate in ways that benefit both sides and serve customers, rather than squeeze suppliers to improve margins.
Business also needs thriving communities to flourish, and employees, who come from those communities and contribute to them, are central to that connection. The noble purpose also feeds the company’s connection with communities. Finally, the connection between the company and its shareholders is fundamentally a human one. Shareholders are either individuals or companies who are themselves human organizations serving a human purpose. Asset management companies are looking after people’s financial well-being and their retirements.
So, employees pursuing a noble purpose are the heart, and relationships are the blood that flows through the entire system and make it thrive. In this approach, all elements are connected in a closely interdependent, mutually reinforcing system.
Profits are an outcome of a successful strategy and the quality of the human relationships that drive it. But they are also essential to fulfill the mission, as they make it possible to invest in employees and innovation; create growth; support the community; and, of course, reward investors.
In summary, this approach is a declaration of interdependence. I am excited about this approach and its underlying philosophy for several reasons. First, it makes sense, both philosophically and spiritually. For me, it echoes the wisdom of some of the world’s most important philosophers and religions, from Aristotle to Judeo-Christianism and Hinduism.
Second, it works. This is not just theory or wishful thinking. Over 25 years, I have seen close up how a purposeful, human organization creates great outcomes. I have seen it work at several companies.
Reprinted by permission of Harvard Business Review Press. Adapted from The Heart Of Business: Leadership Principles for the Next Era of Capitalism by Hubert Joly. Copyright 2021 Hubert Joly. All rights reserved.
Also read: When blindness couldn't limit a sportsperson