Four guiding principles for the next era of capitalism. Find meaning at a personal level. Work is a key part of our search …

I know, based on my own experience and reflections over the past 40 years or so, that shifting a business from maximizing profits to serving employees, customers, suppliers, communities, and shareholders is not easy. It requires leadership. In this article, I share the philosophy I have developed throughout my career and that was at the core of the resurgence of Best Buy. Ultimately, it is about much more than piecemeal CSR or ESG. It is about fundamentally redefining your company around purpose and learning how to unleash the best people have to offer. It’s about putting purpose and people at the heart of business.

The Purpose of Business Is to Contribute to the Common Good

For business to be part of the solution to our collective challenges, we leaders must see companies not as soulless moneymaking entities but as “human organizations” made of individuals working together in support of a shared goal. This goal must contribute to the common good by making a positive difference in people’s lives — what author and consultant Lisa Earle McLeod calls a “noble purpose.” In this approach, making money remains an imperative, but profits are not the ultimate objective; rather, they are the outcome of a successful strategy rooted in purpose. This is how Best Buy turned its fortunes around and rebounded to heights that, back in 2012, few would have imagined possible. Best Buy is not an exception. Like-minded companies described as “firms of endearment” have outperformed the S&P 500 14-fold over a period of 15 years. Multiple studies have confirmed that purpose indeed pays.

How do leaders make this vision a reality? First, they help articulate a noble purpose. It can be found at the intersection of what the world needs, what you and your team are passionate about, what the company is good at, and how it can earn a good return on its investments. What did that look like for Best Buy? After much soul-searching and analysis, we eventually decided that the company’s purpose was to enrich our customers’ lives through technology by addressing key human needs in areas such as entertainment, productivity, communication, food, security, and health and wellness. That had a deep meaning for us as human beings, and it made business sense. It was also a much bigger, more inspiring idea than simply being a consumer electronics retailer.

Sometimes a company’s stated purpose can feel divorced from its operations — just a fancy way to tell the world who you aspire to be. It needs to be more than that. Take Best Buy’s investment in products and services to help aging seniors stay in their homes independently. In working toward its goal to serve 5 million seniors in five years, the company has the potential to significantly accelerate growth. How likely is it that we would have tapped this growing market had our purpose been simply to sell electronics to consumers? Not very. But when your purpose is to enrich lives through technology, that market not only seems possible, it makes total sense.

Leaders must ensure that their company’s purpose goes beyond words and becomes the cornerstone of strategy and operations. Once articulated, Best Buy’s purpose fundamentally transformed our strategy and how we did business, shifting our playing field from the market of consumer electronics to a much broader environment rich in opportunities, which helped to fuel the company’s growth and success.

* * *

Here is a direct link to the complete article.