by Ann Armbrecht, SHI Founder and Director
I recently listened to the fireside chat with Eric Ries, author of Incorruptible: Why Good Companies Go Bad… and How Great Companies Stay Great, offered by the Purpose Pledge about why so many mission driven companies fail.
Some highlights from the conversation for me:
- An ethos of caring for people and customers (and I would add planet) is against the fundamental nature of business. And so a company needs structural integrity, what Ries called a ‘governance fortress,’ that allows it to resist the corruption of capitalism. He defined corruption as any way you are making money without creating value.
- Purpose driven companies hands down outperform those that aren’t. There is so much evidence for the ways they do better, he said.
- The mechanism for their success is that they are trustworthy. Being trustworthy is the most underrated quality in business. Stockpile trust, he said.
- Build something worth protecting. And protect it. You protect it, he said, by figuring out the vectors of attack, get support of the board, and figure out the right relationship with your investors.
- He redefined profit as the maximization of human flourishing.
- People say business is so hard. The reason it is so hard, he tells people, is because no one trusts you.
- He outlined what to do:
- Define your mission: what slice of human flourishing are you focusing on, something that your heart resonates with. Your purpose: to maximize human flourishing by doing what you do. This is the pre-condition for unlocking your super power, which makes business easier.
- Define your ethos of principled decision making. You build trust by following those principals.
- Figure it out. When conflicts arise from following your principles, dig in and figure it out. Digging in creates the breakthroughs needed to go further.