(image, © Andie Gilmour from Wikipedia, CC by SA 3.0)
Recently I listened to the INC podcast debate, "Serious Business: Should Companies (start-ups) Focus on Profit or Social Good?" This is an issue with which I have been concerned. I believe that business should focus on maximizing benefit to all stakeholders, which would include not only shareholders (investors), members (users/clients/customers), employees (and management), patrons (supporters) and the entire community it serves. Maximizing benefit includes maximizing profit, but not only profit.
The sponsor for this podcast, salesforce.com, uses as a slogan on their website, "We help your customers love you;" - this should be a focus of every business, - to have customers love them. Among other things, advertising aims “to enhance the image of the company, [and] draw customers to the business” (Wikipedia). Focusing on the social good makes people feel good about the company and enhances its image even if they are not yet customers.
Kevin O'Leary claims that CEOs have a solemn duty to investors to maximize profits and that a social mission is a distraction. If a purpose of the business is to help (as in medicine) or to entertain or to inspire, that is not distraction. Neither is developing a quality product or great customer service. Nor is being a good social citizen.
Jon Fine says that success comes from selling at the lowest possible price, and for some businesses, this is true, and at times, I shop at Walmart or at a dollar store to get a better price, but I do not deceive myself that this is the only model for success. Sometimes quality demands a higher price. Sometimes so does insurance, beauty, art, and helping the social good.
Howard Schultz of Starbucks put it this way when he said: We remain highly respectful of the culture and traditions of the countries in which we do business. We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day. Starbucks too focuses on social benefit as well as profit and that seems to work very well.
Startups have to think of immediate survival, but they should think about the long run as well, which is in the interest of their investors as well as their customers. Even if investors do not receive immediate gratification, they will when the company is allowed to grow, become popular, get good publicity and get customers.
Our startup social network, ArtsKeeper is being built with that in mind. We are striving to build a business that maximizes benefit for all as well as being a great vehicle for investors.
George Farkas is the CEO of ArtsKeeper, the international Social Media Platform for artists and the arts, for anyone who loves the Arts, - for artists, enthusiasts, and patrons.
