Become a Meaningful Profit company within 30 days and make better profits by adapting your business to human nature.
As a foundation or business, do you ever wonder whether you are doing things right? A Damn Good Business explains that things can be done better by adapting the enterprise to human nature. We call this a Meaningful Profit enterprise, the golden mean between the profit and non-profit sectors.
As a result, you will work more efficiently and innovatively, generate more income, experience less stress in the workplace and have more fun at work. In addition, you will also contribute to a better world.
Every foundation and company can transform into a Meaningful Profit company within 30 days. That is why this book has guidelines on what steps you can take to do this and make ‘damn good money’.
INDEX
Preface
Whether you run a charity or a commercial operation, money needs to be raised to stay alive, stay afloat and grow. To ensure this happens so you can pay salaries and other expenses, you must do everything perfectly.
But what if we told you there is a way to do it even better? What if, with less effort, you can achieve more, the work becomes more fun, and you will generate more revenue? A fairy tale? Not quite.
Do you know the saying, ‘All good things come to those who make them happen’? If you read the word 'good' in two ways and apply it, it's absolutely right. A kind of universal law that always applies. Making good money, in other words. We call companies that apply this ‘Meaningful Profit companies’ — the golden mean between the profit and non-profit sectors. But to do that, you must start working differently and adapt the enterprise to human nature. Because by nature, humans are not made only to give or only to take.
Right now, we are ready for change. Less stress, a healthier work-life balance and more enjoyment. Fortunately, these days, all this is increasingly placed higher and higher on the agenda for many.
This book explains why the split between profit and non-profit sectors is illogical. We explain what Meaningful Profit is, how it works and how any business can become a Meaningful Profit business.
Brace yourself. With all the best intentions, we kick against some sacred cows occasionally, and not everyone is up to this. We challenge you to let go of your thoughts about how something should be. Everything really wasn't better in the old days, was it? ‘A Damn Good Business’ is about rethinking existing organisational structures, thinking and ways of working. With new insights and guidelines for a 30-day roadmap, you can align your business with human nature and start making ‘good’ money.
Introduction
Many of our many-times-great-grandparents witnessed the birth of the Industrial Revolution. A time when businesses and the economy benefited from innovations like never before. A true revolution that we are still building on today. Machines conquered the world, and solid crafts of yesteryear rapidly disappeared into the history books. It could not go fast enough; it was all one great improvement that made our lives easier in so many ways.
But only some things got better. Not to mention how polluting the machines were that powered the Industrial Revolution in those days. Another thing that certainly proved to counter good progress was that entire companies were slowly but surely set up as machines — anything to produce as efficiently as possible. Man suddenly found himself a robot controlling the machine. Human nature was not considered because that knowledge did not exist back then. The techies with an understanding of mechanics tried to make the human in the machine as efficient as possible.
Words like ‘purpose’, ‘intrinsic motivation’ and ‘self-direction’ could not yet be found in the dictionary. Unfortunately, despite all the fine business and management books written about them since then, the grievous errors of that time have not been sufficiently unravelled to this day.
The Industrial Revolution has accelerated two things that really do us and the world no good but what we have seen as the foundation of a healthy business.
Focus on efficiency: As companies grew, all focus went to finding ways of managing and operating all employees as efficiently as possible.
Profit maximisation: Not community interest and added value, but it was solely profit maximisation that became the highest goal of companies.
Of course, we have learned some things over the past decades about how to do this better. But more is needed! For instance, most companies - and especially their employees - realise that there is more to life than just making huge profits. That you really can't just focus on efficiency anymore. There is nothing wrong with efficiency and profit maximisation at its root, but in many cases, there is still something wrong with how we pursue and implement those goals.
The problem is that the improvements that are mostly being made within business are rooted in the system that dates back to the Industrial Revolution. A time when machines, profit maximisation and efficiency became central. A time when this development dwarfed people and society. Therefore, it is time to talk about reconnecting the machines with human nature. The effect is to make even more profit but with respect for people and society. Profit in a meaningful way that benefits everyone - real, ‘good’ profit, in other words.
The profit and non-profit sector
Every entrepreneur and shareholder dreams of more profit, and it can be done. Especially if you start pursuing Meaningful Profit and adapting the machine, we now call an organisation, to human nature. There will be more efficient, creative work and production, more growth and even better continuity of the organisation.
We need to go back in time to understand why this is so. After all, we will have to learn to be ready for the future. Not everything was better in the past, but fortunately, we can use history as a lesson.
The Origin of the For-Profit and Non-Profit Sectors
Before the Industrial Revolution, the primary relief for the less fortunate came from the church and its followers. But that soon changed when the church rapidly began to lose its power and size in the late 19th century. The ever-expanding corporations did nothing either. Instead, they sought to hire labour as cheaply as possible and make as much profit as possible - nothing else mattered. That had become the new normal.
It is, therefore, not surprising that at the very beginning of the last century, the first large non-profit organisations, many of which still exist, were founded. The church's role was replaced by, for example, the Red Cross, the Salvation Army and Save the Children. During a crisis, you see shifts like this occurring more often. The same also happened just before and after World War II.
We now take for granted that there is a distinction between the profit and non-profit sectors. But remember that before 1900, there was no profit or non-profit sector. It is a term that indicates that one organisation is focused on wanting to make a lot of money, and the other is only focused on selflessly serving a noble cause. In doing so, we also take for granted that the word 'profit' is synonymous with money or financial gain, but that is nonsense. Profit literally means benefit. Financial gain can be part of it.
In Latin, the word profit comes from the word: Profectus, meaning growth, benefit and progress.
The fact that a distinction between the profit and non-profit sectors has emerged at all is actually quite unfortunate. If the entrepreneurs of the time had not become so eager, this would not have been necessary. But the word profit has been taken entirely out of context for decades. Why have we been able to improve our prosperity and well-being for thousands of years without these two cleavages, and was it suddenly necessary to change this? What if the two could go hand in hand without one group having to go out and save the poor seals while the other boost profits and efficiency like a slave driver?
The golden mean between the profit and non-profit sectors can exist if we take human nature into account and start adapting to it the machines we now call organisations. After all, humans are not made only to give or only to take. The two should be naturally balanced, especially within your organisation. We call this golden mean ‘Meaningful Profit’ -pursuing profit that you find meaningful.
CHAPTER 1
Meaningful Profit – The Golden Mean
Meaningful Profit is the way of thinking and working that benefits the company, co-worker, stakeholders, customers, your environment, and yourself in many ways. These are the groups for whom you should find meaning in creating profit. With this, you pursue everything you dream of and of which financial returns are a part. If you are not a profit or non-profit, but a Meaningful Profit business, it brings together the best of both worlds.
Southwest Airlines operates with the mission of "democratising airspace". A few years ago, the airline industry went through a slump. For a while, most airlines struggled to make a profit.
Southwest Airlines engaged a team of consultants to identify opportunities to increase profit. These consultants worked with the company's finance team. The two teams discovered that Southwest Airlines could increase revenue by $350 million if it charged passengers extra for their luggage.
The finance team called together the company's top executives and encouraged them to implement the idea. They were shocked when they got a strong 'no'.
"Our goal is to democratise airspace. If we charge money for bags, we make it harder for people to fly, not easier, and that goes against our principles," the executives told the finance team.
They decided to bring in Roy Spence, who developed a 'Bags Fly Free' marketing campaign for the airline.
Less than a year later, top executives and the finance team met again.
"We were wrong when we suggested we should charge for bags," announced the finance team. "The Bags Fly Free campaign has netted Southwest Airlines more than $1 billion."
Instead of $350 million more revenue, it was more than $1 billion. The airline had also gained market share. They were making money because they stuck to their mission.
Profit and hence monetary gain are essential to keep businesses running. You can also use this money to pay for a house and buy food and nice things. You can even help other people with it. The world seems to revolve entirely around money. But is that really the case? Is that the only thing the world revolves around?
You'll find that out soon enough when you run out of money altogether, you might argue. A counterargument, however, is that life is about more than just monetary gain. Money itself is not meaningful, but what you want to achieve with that money is. However, far more often than you may realise, money actually stands between you and your ultimate goal because we focus on it so much.
How Can Focusing on Money Stand Between You and Your Goals?
A young entrepreneurial couple once came by for advice on their business strategy. It soon became apparent that their dreams needed to be commensurate with their business ambitions.
After all, they wanted one house in Spain, one in Asia and another in the Netherlands. Preferably, of course, all three with beautiful views, a swimming pool and a couple of nice cars. To achieve this, they rarely went on holiday and worked long hours, leaving little time for their new-born child.
At that time, things were not going so well due to all the stress of running their business. They usually came home exhausted. As a result, reading a bedtime story or other little things that children enjoy so much were usually not on the cards.
When asked why they worked so hard to accumulate all that wealth, they answered, "So that our little one will have a good life one day".
Once they realised their answer, they decided to focus their time and energy more on their child and less on the business. The result was that they were both happier and able to give their child the attention he deserved. Their relationship also got a lot better, and with all this positive energy, they could double their turnover within two months, despite the fact that they had started working 30% less.
The focus on revenue and profit had nearly brought down their business and could have caused their relationship to break down and even harm their child.
Question:
Do you have a healthy work-life balance? What about your colleagues?
The essence of a Meaningful Profit Business
Within a Meaningful Profit business, achieving a particular profit margin equals achieving other goals, such as personal growth, self-direction, sustainable production or contributing to social problems.
This looks like social or corporate social responsibility, sustainable business, or any of the many other terms that have become trendy buzzwords since the beginning of this century. But in essence, there is a big difference. Corporate social responsibility is something you do alongside your commercial profit motive and says nothing about how you run the business, for example. It is added to the way of thinking and working that emerged during the Industrial Revolution.
Dick Fosbury revolutionised the sport of pole vaulting in 1968. For as long as the sport existed, people were jumping forward or sideways over the bar and it was thought that the maximum height had been reached. That was until Fosbury came on the scene and introduced the back flip.
Even though he was traditionally trained like the rest of the top athletes, he was the very first to flip backwards over the bar, radically breaking all the standards that were the norm at the time. He also broke every record that allowed him to take home the gold medal at the Olympics in Mexico City. His way of pole vaulting has since become the standard and is rightly called "The Fosbury".
If you want to achieve better results, it is usually best to scrutinise all the fundamentals that have been the norm and see where there is room for improvement. In the transition to a Meaningful Profit business, you, therefore, rebuild the entire business from the ground up where the mission and vision, the strategy, the organisational structure and the kind of leadership are all about what you find meaningful and where as many people as possible can benefit in as many ways as possible.
A meaningful Vision and Mission
You can fill entire libraries with books on what constitutes a vision and a mission. Within the Meaningful Profit mindset, we think about this very simply. Vision originally comes from the Latin word visionem (nominative visio), and means "act of seeing". Great visionaries can see and dream beyond the horizon. So, you can also see a vision as something you dream about in a positive sense.
For that dream to be meaningful, it must be about - much - more than money, market size or other business gains. A meaningful vision or dream is about the ideal world a company envisions and can and wants to contribute to. In addition, a meaningful vision should appeal to people's hearts rather than their reasoning. You want to achieve that all co-workers and even customers want to contribute to it because they care.
A monk walked through a small village and saw workers busily lugging and working stones in the hot sun. Hammers and chisels sounded from far and wide and sweat dripped from the workers' foreheads.
He asked one of the workers what was going to be built. The worker looked up, tired and irritated, and snarled, "You can see what I am doing! I am chopping stones!"
The monk nodded politely and asked, "Yes I see that, but what is it for?"
The worker replied even more irritated: "I don't know. I'm half-dead from the heat here and you're worried what's being built? Get lost!"
The monk walked on and asked one of the other workers what was being built. The plodding and sweaty worker replied with a sigh, "I don't know. I get my wages every day and that is all that matters to me."
The monk walked on again and saw a worker with a big smile on his face despite the heat, hard work and a lot of sweating. Again, he asked what was going to be built.
The worker looked up and replied, "Here will be a temple."Interested in why the worker was so happy, the monk asked, "But aren't you incredibly hot in the bright sun and because of this hard work?"
The worker replied, "No way, I love doing this. This village does not yet have a temple. I cannot wait until the temple is finished, how happy everyone will be and I can visit the temple with my fellow villagers every day.”
Of course, the above is about creating an end product -a temple - but the same goes for an inspiring and meaningful vision. If everyone involved in the business can connect with that vision, something magical, like working for a higher purpose, is created. It is no longer about the stone you are carving but about what all those stones come together to create - how happy you can make people and the world with the work you do together.
So, within a Meaningful Profit company, vision is always linked to an ideology. Here, of course, the business model still has to add value. For the non-profit sector, this is the biggest challenge. There is always an ideology, but usually absolutely no business model.
A mission is about the role you want to play in making the dream a reality. So that says nothing about your product or service but something about what you are. A parent's role is to raise a child until they leave home. The only question is what kind of parent you want to be. In the same way, you can define a mission by describing precisely what you are in the world and with what style you carry it out.
Question:
What development is happening globally within your field that hurts the world or society, and what are you doing to remedy it?
Make Use of Natural Leadership
You want to use the maximum potential of all co-workers and give them room to move to contribute to the vision and mission in an intrinsically motivated way. This is why a Meaningful Profit company has no managers or hierarchy, and roles and tasks replace functions. The focus is on and driven by natural leadership.
Management and hierarchy versus leadership
In 1911, Frederick Winslow Taylor was a mining engineer in England. He saw his mine as chaotically unorganised and wanted to bring a semblance of structure with his machine-oriented mindset. Inspired by taming wild horses in riding schools and how one small cog could turn several bigger cogs, he devised the word ‘management’.
Simply put, you let a wild horse run around in an arena until it does exactly what you want. Taylor's idea was to establish a hierarchy by making only a few people managers. These managers would ensure that the remaining miners, whom they saw as resources, like cogs in a machine, did precisely what the manager told them to do. Management, therefore, literally means control, and that kills motivation and innovation.
Leadership comes from the days when we conquered the world's oceans. A fleet of ships followed the lead ship, and since there were no means of long-range instant communication yet, the lead ship had to make sure it set the course of all ships under all circumstances, such as storms or warfare, but in such a way the rest could still follow the leading ship .
Due to the lack of hierarchy within a Meaningful Profit company, each employee relies on their leadership. There are no positions, but different roles and tasks, which can also change from situation to situation.
Does that mean that everyone always takes the lead everywhere? No. Each situation requires different qualities. The person who is good at something deploys their qualities based on personal leadership. Within group dynamics, it turns out in practice that one person always takes charge of the whole. This is not hierarchy, because it is in a job description, but from natural leadership.
Question:
In what situations - private or business - do you show personal leadership?
In the mid-1980s, Doug worked at a communications agency in Toronto. As he stood in his office one morning, he read an intriguing headline.
A young mail delivery company, Federal Express, had recently promised its customers that it would "absolutely and definitely" deliver their parcels on time. The headline read, "Federal Express driver hires helicopter to deliver package". The article explained that a Federal Express driver had tried to deliver a parcel during a recent snowstorm. The roads were closed, and the driver knew he would not be on time with his van.
Federal Express had promised its customers that it would deliver their parcels "absolutely and definitely" on time. Without calling the head office, he made a decision. He hired a helicopter, flew it to the destination and personally delivered the package on time.
There was a comment in the newspaper that read, "These people will be bankrupt by Christmas." Fred Smith, CEO of Federal Express, later countered the comment. He repeated the company's promise to deliver parcels "absolutely, positively" on time. And he noted that the company's delivery drivers were smart enough not to hire a helicopter for every snowstorm.
Processes versus minimum rules of the game
We have all run into it at one time or another. A government department where you could not get something done because the correct process needed to be followed or because you did not tick the right box. A blind person can still see that everything is fine, and though it is but a formality, the official smiles kindly and says, "Sorry, the process dictates that it has to be different."
In theory, processes are not wrong; sometimes, they are unavoidable. For example, if you work in a nuclear power plant or fly a plane. Especially at that nuclear power plant, you hope all the processes are obvious enough so that the wrong button is never pressed and no one's safety is compromised.
Of course, it is an entirely different story within the business world. Consultants can make very nice line diagrams and streamline all the processes of a business, but the consequence is that those processes become leading in situations requiring creativity. Suppose we have to do all our work according to preconceived processes and procedures. In that case, the ability to use our intelligence and common sense becomes lazy, and that does not help employee motivation either.
That's why Meaningful Profit uses minimal rules of the game. These work slightly differently from the usual processes. Processes look at precisely what should or should not be done. With minimal game rules, you look at what should or should not be done as a minimum — a small difference with a big impact. In addition, a game rule is a helpline to make work easier, but the employee can deviate from or interpret it as they see fit. The rules of the game are not set in stone and therefore do not hinder anyone from acting independently in the best interests of customers or the company.
Question:
How many rules of the game do you apply within your private situation, and why do they not need to be defined?
What ground rules within your company could you - with the knowledge you have gained now - eliminate?
Co-workers can do much more independently than managers think
Frederick Taylor's mechanical way of managing did not consider human nature. A human being is not a resource; your co-workers are not cogs and do not want to be seen that way. If you want to take co-workers seriously, you don't need to formulate a process that, for example, says that when you leave the building, you have to turn off the lights. All those patronising rules show distrust in the independence of co-workers. They are not children!
Leadership is something we do every day. Why is it that every employee is able to put a down payment on a house and knows how to get the right mortgage and insurance, whereas for spending 10 euros within the company where he works, he sometimes has to go through 20 processes and ask for five signatures? Is this to prevent theft or because of hierarchy and process thinking that the company wants to keep control and does not consider the employee as a complete person but a replaceable resource?
Question:
Are you yourself considered a complete person at work, and do you consider your colleagues as such?
CHAPTER. 2
Flaws of Profit and Non-Profit Sector
As humans are not by nature made only to give or only to take, you see behaviours emerge in both sectors that rarely occur in healthy group dynamics. We adapt our behaviour, as it were, based on which environment we are in.
In the famous so-called 'straw experiment', researchers placed five straws on the table, one of which was obviously shorter than the rest. Ten people took seats at the table and had to tell whether all straws were equal or unequal in length.
When person number ten had to answer last, he did not know that the other nine were actors and quite deliberately said that all straws were the same length. As many as 86% of the persons decided to then also say that the lengths were all the same.
This study has been repeated over and over again in different ways and each time with the same result.
What's wrong with the For-Profit Sector
Be honest, even though you know that not every commercial company is evil or does terrible things, some of them are truly bad. For those companies, everything must give way to profit maximisation, and humans are still robots driving the machine. They do not flinch at things like child labour, dumping chemicals in the sea or exploiting employees by making them work unpaid overtime, for example.
But even companies with higher morals and who call themselves socially responsible businesses can unknowingly do nasty things. Whether you believe in the phenomenon or not, burnout rates have never been higher and are often driven by poor management and highly demanding and nonsensical processes and procedures. Add to this far too tight deadlines, and, unsurprisingly, many employees drop out with (mental) health problems.
Caring for the customer is often very high on the agenda, caring for nature sometimes too, but caring for maximum profit is usually at employees' expense.
Question:
What is being focused on within your business, and is it at the expense of something else?
In 2009, bestselling author Daniel Pink wrote the book ‘Drive’ in which he explains what intrinsically motivates people and makes them happy in the workplace. Based on 50 years of scientific research into human behaviour and motivation. He found that people need autonomy, mastery and meaning and that these three provide intrinsic motivation.
This is very different from what many companies thought then and still think today. The average manager still believes that financial reward or secondary benefits are the best and second-best way to motivate workers. As it turns out, that is complete nonsense.
Employees want to be able to work autonomously and decide for themselves how to do certain things. Mastery is about them naturally wanting to get better at something and meaning is about their work having to be useful. What they do should contribute in a positive way to a greater whole of which they themselves are a part.
What's wrong with the Non-Profit Sector
Of course, you cannot be against a non-profit organisation. They put their heart and soul into helping others, animals or society — something that is truly admirable. They have also understood that they only want to work with people who have a heart for the cause they stand for.
What they still need to grasp is dealing with money and resources. The overhead of a foundation can be up to 90%. So that means only 10% of all donations can be used for the actual purpose of the non-profit. Let that sink in.
Question:
What do you think gives a foundation the right to exist if the overhead is 90%?
A good acquaintance of ours had to do an efficiency evaluation at a large and well-known non-profit organisation. There was a co-worker who had been working there for 40 years, and no one knew exactly what he did or what his job description was. On enquiry, he turned out to have assigned himself the task of collecting unstamped stamps.
In fact, he had found out years ago that not every stamp was properly stamped. So, he checked all the mail they received every day and sometimes he would come across a stamp that could be reused.
He was very proud of his invention and was able to tell that he saved at least 20 euros every month that way. On a good month, he could save up to 30 euros. That he himself, excluding costs for his workplace, etc., cost 3,000 euros per month, he had not thought about, because if you can save anything you should always do it according to him.
That efficiency and cost-cutting should not be the main focus is very different from not paying attention to it. That is something many non-profit organisations still have a lot to improve on. In addition, non-profit organisations can sometimes get even further bogged down in processes than profit organisations. After all, everything has to go by the book to justify every expense threefold.
Finally, a big problem within non-profit organisations is that passion and drive are often considered more important than decisiveness and talent. If you are sweet, kind and believe in the cause with heart and soul, you can get a -volunteering - job. This may be a bit black and white, but essentially that’s the truth.
Conclusion
The ideal world does not exist, but for-profit and non-profit sectors can learn much from each other. One on business and the other on human and social issues. It is our thesis that the two should always have been united. After all, it does not have to be one or the other. Pursuing Meaningful Profit is the foundation for embracing the best of both worlds.
CHAPTER 3
The Benefits of a Meaningful Profit Company
Within a Meaningful Profit business, everything contributes to creating meaningful value. The result is:
More loyal and intrinsically motivated co-workers
Greater efficiency and innovation in the workplace
Reduced workload and stress
Greater customer satisfaction
A stronger and better image
More and loyal customers
More turnover and profit
A more beautiful world
A legacy
1. More Loyal and Intrinsically motivated Co-workers
Meaningful Profit companies have a vision and mission that co-workers find meaningful. Therefore, they are attached to the company both financially and in terms of heart, which leads to more loyalty and intrinsic motivation.
2. Greater efficiency and innovation in the workplace
Because they can work autonomously, they can, so to speak, 'have their own way' and will improve themselves and the entire company. Their capacity for creativity and innovation is addressed because they are intrinsically motivated.
In addition, the leadership model makes co-workers take more responsibility. They do not wait for the manager to give an order, but they get to work themselves to solve problems and improve that which is not running smoothly. This automatically makes the company more efficient and innovative. Everyone does their bit, and everyone benefits.
3. Reduced Workload and Stress
Because of the way it works, there is less workload and stress within Meaningful Profit business. No managers are snarling at you or unavailable for approval, and there are no processes that sometimes work against you. In a Meaningful Profit company, the main reason co-workers experience less workload and stress is 'beneath the surface'.
Indeed, the cause is that co-workers contribute to something meaningful and can do so in their own way. That gives job satisfaction and is the best remedy against stress and work pressure. Even if a deadline is too tight or something goes wrong somewhere. Working towards something that you find meaningful makes work a joy.
4. Greater customer satisfaction
One of the greatest annoyances of customers is when they run into processes that make something simple unnecessarily complicated or even impossible. Meaningful Profit companies have little or none of this. Using ground rules, high levels of intrinsic motivation and personal leadership, customer problems are solved adequately and creatively.
5. A stronger and better image
By default, companies that contribute to society already benefit from a stronger and better image. Because all co-workers pursue Meaningful Profit and find it truly meaningful, the company exudes this, so to speak. The customer feels this, and certainly, if the customer also values this benefit - the contribution to society - he will propagate this within his environment. As recommendations are one of the most potent forms of positive brand communication, the image is thus not only improved but also strengthened.
6. More and loyal customers
Customers are attracted to companies that pursue something meaningful that they find very important. This creates a bond and loyalty. They are proud to be customers; thus, they are more likely to propagate the company’s message to those around them. And, combined with a stronger and better image, this creates more customers.
7. More profit
The sum of creativity, innovation, employee and customer loyalty and more loyal customers results in cost savings in certain areas and significantly more turnover and profit. In terms of cost reduction, think of fewer absences due to health issues and stress, fewer recruitment costs as co-workers stay connected for longer, efficiency improvements through innovation and customers who come back naturally without significant marketing costs, allowing this budget for example to be used for new customer acquisition.
8. A more beautiful world
Pursuing Meaningful Profit always includes society. What that is, the company decides for itself, but the world will be a better place whatever your definition. Because profits can be invested in growth, the company will be able to contribute more and more to a brighter world.
9. A legacy
No company has eternal life. In fact, over the past 50 years, the average life expectancy of a business has decreased from 50 to around 20 years. No matter how innovative they are, Meaningful Profit enterprises are also finite. This may be due to technological innovation, the phasing out of certain services or products by emerging alternatives, a merger or, for example, an acquisition.
But when the Meaningful Profit enterprise stops, it has at least left a legacy. So not only can the management, shareholders and co-workers look back on a beautiful and profitable enterprise but also on what lives on in society thanks to the enterprise.
Question:
What would you like to see as the legacy of your business?
CHAPTER 4
How to Become a Meaningful Profit Business
The transformation from a traditional profit or non-profit company into a Meaningful Profit company does not have to be significant. As the company appeals to co-workers' intrinsic motivation, the will to transform is often greater than with other types of changes. After all, in return, they are allowed to contribute to what they find meaningful and valuable.
The fundamental changes are the transformation to:
A Meaningful Profit vision and mission
A benefit plan
Personal leadership
Employee and training policy
Minimum ground rules
Language
Develop a Meaningful Profit Vision and Mission
"Our vision is to become Europe's largest furniture maker so everyone can sit comfortably". Do you really believe that? This is, of course, a dream; indeed, people can benefit from sitting comfortably, but it is more about the company's purpose.
A meaningful vision relates to the world and the people who live there. It is about the most significant opportunities you want to contribute to or threats you want to do something about. For example, in the case of the furniture maker in the example above, you could formulate a vision of a world where tree felling no longer occurs. Your mission, the role you play in it would then be, for example, to become the most sustainable furniture maker in Europe.
Of course, it is essential that you and your co-workers are also behind your mission statement and truly feel motivated by it. Making up a vision and mission does not work because you are not attached to it with your heart. A Meaningful Profit vision inspires and provides intrinsic motivation, brings you innovative ideas and gives the feeling that you want to act on them together.
A very effective method to arrive at a Meaningful Profit vision as a team is a brainstorming session in which everyone contributes what they hope, or fear will happen in five to ten years. The game rule here is that it must be industry-related and related to society, nature, or a large group of people.
After everyone has given input, cluster the inputs and identify the most significant opportunities and most prominent threats. The biggest opportunity or threat usually has the potential to be rewritten into a Meaningful Profit vision.
Then the question is what role you can play as a company to contribute to making this vision - or dream - a reality. The answer to that question is your mission.
Question:
What is your company's current vision and mission, and can co-workers commit to it with their hearts?
Establish a Profit Plan With Clear Goals
That profits must be made or donations brought in to keep the business running is a given. You don't get owt for nowt. But just as self-evident is that co-workers must be happy, the image must be positive, and customers must be satisfied. However, while all this is fundamental, it’s different from what a profit plan is about. It is just a part of it.
In a Meaningful Profit company, a plan defines all forms of benefit that co-workers, management and stakeholders consider essential. Who can benefit both internally and externally, and in what ways? Of course, it is ideal if these benefits also contribute to the bigger dream. But only some things you pursue need to directly contribute to that.
These include things like ensuring that all co-workers can grow in their leadership roles, that there is a healthy work-life balance, or that you support the market of green or sustainable suppliers by only doing business with them. What is important here is that these are issues that everyone in the company considers essential, that there is a focus on them and, if necessary, that they are also budgeted for.
You can also explore how easily the enterprise can allow a community to benefit from, say, something that is not in use. For example, can children in the community who do not have a computer use the ICT available within the company at set times? That little bit of extra power consumption will not bankrupt a company, but it is significant for those children who benefit from it. Or may the company's warehouse be used at night to shelter homeless people?
For non-profit companies, on the contrary, it is essential to look at the business aspect. What revenue model will benefit the company the most? Of course, this need not be at the expense of existing grants or donations. It can just be a welcome addition.
Question:
What ‘profit’ would you like to pursue and offer your colleagues and society?
Introduce Personal Leadership
The foundation for encouraging personal leadership and maximising the potential of each individual within the company is to move away from management and management layers completely. After that, it is crucial to let go of job titles. Each job title can give the impression that someone has a bit more say and is higher up the tree than another, which could be fatal for personal leadership . Instead, you want to encourage co-workers to use their qualities at all levels of the business if they think it necessary.
Many non-Meaningful Profit companies have already successfully implemented various models that offer an alternative to hierarchy and management. Think of holacracy and sociocracy, for example, but an entirely new model or a variant is also possible.
Some people are convinced that we humans function like pack animals and thus need a strong leader to show us the way and tell us what to do. At the beginning of this century, researchers therefore wanted to understand how leaders within a herd carry out their leadership.
They observed a large herd of deer grazing peacefully in a large meadow. The dilemma facing the leader of the herd was where to make the herd drink water.
A few kilometres away was a river, but that river also contained crocodiles. Much further on was a small lake, but if the herd did not leave in time, the animals might succumb to thirst on the way. So, both choices could result in victims and even a human leader would find this a difficult dilemma.
Much to the researchers' surprise, it turned out that it was not the leader who made the choice, but the group itself. They saw that some deer stood with their heads one way while some other deer stood the other way. Gradually, more and more deer stood one way or the other, and when 51% of the deer stood a certain way, the whole herd left in that direction.
Time and again, they saw the same phenomenon and not only in deer. All animal species work in the same way. The leader had no say in such choices. The only thing the leader had anything to say about was which animal to have fun with.
What Is Holacracy?
Within a holacratic model, all co-workers are given or take roles based on their skills for each project. All company activities are divided into projects with clear starting points and goals. Within that temporary project, an employee takes charge of a specific sub-area.
What Is Sociocracy?
Sociocracy is a variant of holacracy and is often more ICT- and democracy-driven. Simple game rules determine how a circle of co-workers is formed. Then, based on another set of game rules, this circle can be divided into sub-circles and sub-sub-circles. Each circle can be dissolved over time, and new circles and sub-circles can always be added. This keeps the business moving organically and allows each employee to use their talents on the right projects in an efficient way.
What Could an In-House Model Look Like?
An advertising agency in Amsterdam with 120 co-workers worked very successfully with, as they called it, 'the pyramid model'. At the top of the pyramid, four roles were available — leader, culture guard, budget guard and operations guard.
All had been elected by the staff, with each bearing an equal vote. The role for which the four were elected gave them power of attorney to do everything as they saw fit and thus complete freedom of action. However, if an employee disagreed with a decision, they could request a vote to depose the leader in question. In case of a majority vote, the person's role was taken away, and a new person had to be elected through voting. Incidentally, the co-workers did not have a position and were assigned by agreement to a project that works within holacracy.
A man on horseback saw a group of exhausted soldiers digging a trench. To the side stood their section leader who was barking orders.
The passer-by asked the leader why he was not helping his team. The leader said only that he is in charge and tells his people what to do.
The man decided to help the soldiers dig until the trench was ready. He then approached the commander on foot and told him that the next time his rank prevents him from supporting his men, he should inform the supreme command — and he will provide a permanent solution.
The section chief then realised that the person he was talking to was none other than the great historical figure, General Washington.
Implement an employee and training policy
Every individual has personal leadership skills to a greater or lesser extent, but it is helpful to enrich them through coaching and training continuously. Just as a cook never loses out on cooking and a painter never loses out on painting, you never lose out on leadership.
Working with one or more leadership coaches can anchor and strengthen personal leadership within the company. Especially in the beginning, this is highly recommended because, for an employee who has worked for an authoritarian manager for years, it can be tricky in that environment to feel the freedom and to show leadership.
Some co-workers do not want a leadership role
Especially in the beginning, despite coaching, it can be pretty scary for some people to show leadership. Think, for instance, of co-workers who do not dare to make mistakes due to a desire for a form of perfectionism. There will also be co-workers who simply want to hold on to their status or existing way of working. Even if you offer them a way of working that completely suits their human nature, they prefer to keep things as they are. In that case, there is no choice but to come clean. You cannot work both hierarchically and holacratically.
Recruitment policy
Someone has to take on the role of hiring people. Unless you also let this be a democratic choice. But whoever does it, or however it works out, it is wise to agree on some ground rules. It is wise to distinguish between primary and secondary skills within a Meaningful Profit enterprise.
The importance of primary and secondary skills
Every person possesses primary and secondary skills, with some possessing more developed primary, and others secondary, skills. What exactly are they, and how do you differentiate between them?
Primary skills are the skills you need and demonstrate in everyday life — for example, communication or organisational skills. Secondary skills relate to professional knowledge or skills. For instance, being able to do accounting, design or master a particular software programme.
Secondary skills are often the main focus within a more traditional way of working. In other words, do you possess the skills to carry out a particular profession? Within a Meaningful Profit enterprise, shifting the focus to primary skills is wise. Of course, a person must master the basic skills to take on the roles and tasks required, but in the absence of management, it is mainly about who you are and what you are good at.
Almost all secondary skills can be learned within a few months. For primary skills, this can be a much longer journey for many. For example, learning to cooperate, display social behaviour, and give or receive feedback are much harder to learn if you have not mastered these basics.
Question:
What primary qualities of yourself or your colleagues remain untapped within your company by using tightly defined functions?
Reward methodology
How to reward co-workers is always a hot topic. You never do it right. People often look at a combination of age, years of work, function and goals achieved. Within a Meaningful Profit company, the job factor is already dropped because it no longer exists. So how, then?
Suppose you identify what primary and secondary skills the company needs; you can use that as a starting point to design a reward methodology. Take the skill of communication, for example. Communication can be divided into giving and receiving feedback, being to the point, setting boundaries and listening. During an evaluation, you can have the employee fill in a score from, say, one to ten for these skills and his colleagues can do the same. Together, you arrive at a certain score, and by attaching an amount to that score and per sub-area, you arrive at a reward for the employee. You must find incentives other than job-based pay.
Define the minimum rules of the game
What agreements are fixed within your family and described in the handbook: “This is how we live here”? Let us guess. None! But within a company, we do love it. All the ways we work are laid down in the most impossible of handbooks. What time you should come in, when you can take a bite of your sandwich and which finger to use to start up the laptop are all laid down in the processes and procedures booklet. Horrible.
Within your family, you know you are expected to eat at the table around a certain time. This is not fixed and often varies day by day . You also understand that if dishes are on the counter, you must wash them or put them in the dishwasher. And if the dishwasher is full, you turn it on. It's as simple as that.
Well, as we all know, within a family this sequence does not always unfold so perfectly. Especially if a few adolescents are running around. So can it be within a company. Usually, only a few simple ground rules are needed for a business to function smoothly. We are not talking about a nuclear power plant or an airport, just your average company.
However, the more rules you lay down, the less self-reflection takes place. If it is black and white on paper that working hours are nine to five, there is less chance of working an hour overtime than if the game rule is to ensure satisfied customers.
Do you know the coffee jug problem? You use two coffee jugs so that when one is empty, at least the other is still full, and fresh coffee can be made immediately in the empty jug. Usually, the result is that both jugs are always empty, and the next colleague misses out, much to the chagrin of their colleagues. People often try to solve this with a post-it above the jug, saying, "Please do not put an empty jug back, but make fresh coffee!!!!" The more exclamation marks, the better it works, one thinks.
Subsequently, this does not work either, and another post-it is hung next to it saying, "Read the post-it next to this one!" A creative employee also draws an arrow on it, maybe even a red one! But whatever they do, it doesn't solve the problem. The solution? Buy an automatic coffee machine. Processes don’t work for this kind of futility.
Watch your language
One of the seemingly most minor yet essential changes in the transition to a Meaningful Profit company is the use of language in the workplace. Language may not seem important, but it is. Kathleen Voss is a researcher who once primed a large bank's call centre. Simply put, priming is the frequent use of particular words. She divided the co-workers into two equal groups and primed one group with negative words such as debts, money, injustice, theft and so on. With the other group, she used positive words such as friendship, love, forgiveness and connection.
Afterwards, she conducted two experiments. In the first, she ‘accidentally’ dropped a pen or pencil case. Within the group primed with negative words, significantly fewer people picked up the pen or pencil case than in the other group.
In the second experiment, she presented a problem case of a bank customer and asked who caused the problem. The group primed with positive words was often more likely to blame the bank than those primed with negative words. So, words do matter and affect our behaviour.
The essential words to avoid or use correctly within a Meaningful Profit enterprise are:
Co-worker instead of employee. An employee is employed to receive work from an employer who gives assignments, a co-worker works alongside as an equal colleague.
Business, company or enterprise instead of organisation. Within an organisation you only organise things. While within a business, company or enterprise you work together to service others.
Leader rather than manager. A manager maintains control, and a leader leads himself, someone else or a group towards a desired goal or outcome.
Resource. An employee is a person with ideals and a personality, not a resource.
CHAPTER 5
30-Day Action Plan
Where there is a will, there is a way. Every business is different, of course, but in principle, you can always transform into a Meaningful Profit business within 30 days. Follow the guidelines below to arrive at an action plan. If you make it an important-enough priority, you will succeed.
Week 1 – Preparation
Inform all co-workers about Meaningful Profit and the bigger picture you envision as an entrepreneur. You can do this during a meeting. Ask your co-workers to read this book or a combination of this and other similar material.
Communicate with co-workers the following week and - if they have any - let them voice their concerns and remove ambiguities.
Present the plan of action. This could be the action points below or a variant of your own.
Week 2 – Kick-Off Sessions
Create the most inspiring vision and mission together as a group where the shared ideology of the co-workers is represented.
Create a profit plan in a separate session.
Present the new vision, mission and profit plan at a meeting and make all co-workers realise this is the company's purpose.
Week 3 – Introduce Personal Leadership
Research and choose the model to replace hierarchy and management that best suits the company and co-workers.
Develop a remuneration methodology that fits within this model.
Optional: partner with a coach or team of coaches who can assist in introducing personal leadership.
Week 4 – Minimum rules of the game
Establish the minimum rules of the game that form the foundation for the new way of working.
Get rid of all processes
Day 30 – Profit of a Party
Celebrate the future profit you, the co-workers, stakeholders, customers and the world will gain from this transformation to a Meaningful Profit enterprise.
Frequently Asked Questions
What is a Meaningful Profit business?
A Meaningful Profit business integrates the best attributes of both profit and non-profit sectors. It focuses on generating profit in ways that benefit society, employees, stakeholders, and the environment, aligning business operations with human nature.
How does Meaningful Profit differ from traditional business models?
Unlike traditional profit-focused or non-profit models, Meaningful Profit aims for a balanced approach, ensuring financial viability while contributing positively to social and environmental causes. It rejects the notion that businesses must choose between profit and purpose.
What are the key components of transitioning to a Meaningful Profit business? Transitioning involves developing a Meaningful Profit vision and mission, establishing a benefit plan that encompasses various forms of value, and promoting personal leadership among employees, all while minimizing traditional hierarchical structures.
What benefits do Meaningful Profit businesses offer?
They foster loyal employees, innovation, and reduce stress by aligning work with personal values and societal benefits.
What challenges does adopting the Meaningful Profit model present?
Adopting the Meaningful Profit model introduces challenges such as realigning organizational goals, reshaping company culture, and measuring success beyond financial metrics. Businesses must navigate the transition from a purely profit-driven mindset to one that equally values social impact, requiring changes in leadership approach, operational practices, and stakeholder communication. Successfully overcoming these challenges involves fostering a culture of innovation, openness, and a deep commitment to the company's redefined mission and values.
How does a Meaningful Profit business contribute to societal change?
A Meaningful Profit business acts as a catalyst for societal change by integrating social objectives into its core operations and strategies. Through its products, services, and community engagement, it prioritize meaningful impacts alongside financial success, inspiring other companies to adopt more socially responsible practices, contributing to broader systemic change.
