Is profitability your corporate purpose?

Let’s quickly dive into the subject of corporate purpose. More and enough debates have been had by academicians and practitioners on what the goal of an organization is and very often you hear the banal “Shareholder value” answer. Shareholder value is a function of profitability. So, is profitability really the goal of an organization?

Is eating the goal of our personal lives? I mean, without eating, unarguably, you can’t survive and therefore you must eat. Profits’ becoming the goal of an organization is very similar to eating becoming the goal of our life. Not for once will I say that profits are not important. Profits are as important to the organization as food is to us. So, that’s a given. What I’m hinting at is having a purpose that drives our philosophy and motivates us to be in business.

How you define and more importantly what you believe to be the goal of your organization will define your perspective for your start-up. Are you going to chase numbers or are you going to chase the value you set out to deliver in the first place? Are you going to cut corners to drive profitability or are you going to figure how to win and keep customers?

To me the main goal of the organization is just that – winning and keeping customers happy. If that’s the lens you wear, most things will fall in place. The products you develop, the service you deliver, the features you introduce, the communication you send out will all be geared towards that one purpose of creating a happy customer. These happy customers will more than make sure that you make profits exponentially.

I’ll end the article with a very interesting story. There was a man who went around collecting jet fuel everywhere he could find it. When people asked whether he wanted to become the largest collector of jet fuel he said “Not at all. I just want to go very far.”

Don’t let profits become your driving purpose of your start-up.

What’s your opinion?

[Guest article by Mayank, Marketing head of RedBus.]

Leave a Reply