Positive Impact Blog

Thought provoking insights for change makers

A hypothesis: what if profits reflected a company’s debt to society!?

A well-managed business can no longer be a place that maximizes its profits but that delivers goods and services that not only make its customers and clients happy, but that contribute to better societies and a better world. Some products and services fulfill this requirement better than others. Some contribute to the planet, some help destroying it. And sometimes, there is a conflict between a product that helps a society to function better and its potential impact on the environment (carbon-fueled cars would be an example). Finding solutions that enhance both the well-being of citizens around the world and respect the limits of the planet’s resources is one of the most important challenges we as a human race face in the coming decades.

“Imagine a world where business is celebrated for its contribution to society” 

Nick Main

One specific example of how we could rethink the purpose of business is by considering this assumption differently. We could consider that revenues may well be a better indicator of this added value than profits. In such a scenario, we may conclude that profits could be considered a reflection of what a business has withheld from society. It reflects the difference of what an organization has paid its various stakeholders (its employees, suppliers, partners, raw material sources, and the planet) and what it has received for its products and services. One could say that profits are what business took from the planet and society in order to provide its goods and services. Profits may actually reflect the annual debt a business has towards society and the world. It shows to what degree a business exploited its contributing stakeholders in delivering a promise to a client. Currently, we believe that a business that makes no money is a business that is very inefficient. Alternatively, we could consider it a place where all of contributing stakeholders are recognized and compensated for their fair share in delivering a promise to a client. This as an illustration of a different perspective without claiming that all consequences such a perspective might entail have been studied.

Author: Katrin Muff PhD

Dr. Katrin Muff is Director of the Institute for Business Sustainability in Lucerne, Switzerland and Professor of Practice at the LUISS Business School in Rome, Italy. She consults leaders and boards in business sustainability and strategic transformation, and runs an executive program together with Thomas Dyllick. Her book “Five Superpowers for Co-creators” provides insights about issue-centered multi-stakeholder processes. She brings 20 years of international strategic and general management experience in Europe, Australia, North America and Russia and a decade of leadership in business education. www.KatrinMuff.com

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