One third of the work force today in North America is made up of millennials and they are changing business as we know it. Why? Because their focus is on people, buying local, protecting the environment and creating a better world. Their mindset movement is to leave it better than you found it and to enrich people’s lives. For many decades, traditional leaders have been operating under a law of governance with rules, regulations and a chain of command. These new B Corporations* with sustainable leaders focus on trying to do more for those outside their businesses, including considering how their products and services will leave an impact in the world.
As a profit coach, my immediate reaction is that these businesses can’t possibly be making money. They are putting internal systems in place that create substantial development costs up front, have higher burden costs and the word profit isn’t being talked about in their everyday language. But I have learned that millennials are well educated and they do understand the concept of profitability; they just don’t have it as one of their top motivators for being in business.
So, the question then becomes how do you do both? How can you live out a higher vision of giving to others and still make money, because if you’re not making money, you won’t be in business for very long. Here’s how I see it: There are the standard “for-profit” companies accountable for delivering profitable results to their shareholders and then there are the “not-for-profit” companies who raise money through the contributions of others and whose main goal is to give it back to others. The goals and parameters for each type of business are quite clear.
There’s a new business model evolving we have never before seen in history.
This new hybrid business model continues to strive for profit in order for the company to grow, yet once established, this profit is largely distributed through philanthropic channels. In order for these types of companies to flourish they need to have a unique ownership structure established that supports the very core values of this mindset. Shareholders need to value leaving a legacy behind at the company level rather than at a personal level. I myself have never worked for a B Corp., but I’m sure that the discussions around the boardroom table and at their strategic planning retreats would be quite interesting to say the least.
Whichever type of business you chose to run remember that in business, you need to make profit so that you can live your purpose (whichever purpose it is that you choose).
*B Corporations are “for-profit” companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Here is a link to learn more about B Corps: https://www.bcorporation.net/what-are-b-corps