December comes with all the hopes and joys of Christmas. In Christian faith, it marks the time when the world reflects, prepares to receive, and celebrate God’s ultimate gift of love, the birth of the Savior, Jesus Christ.
Overtime, the simple and solemn celebration of God’s love through Christ’s Mass (the etymology of Christmas) became a tradition of bringing families together and sharing of blessings and gifts. This tradition symbolizes the completion of the Holy Family and God’s ultimate gift.
As the world becomes more complicated, the focus has blurred, and priorities were distorted, Christmas became a season when people eat, party and spend more than the usual; when employees take a leave from work and have some real rest days; when retail businesses need to double time to address the surge in demand from consumers and catch-up profits as another financial year comes to an end; and when children are all eyes on the gifts under the Christmas tree and of course, “aguinaldos” whether in electronic form or in crisp bills.
People who are givers on the other side of table can perceive Christmas season as much more complicated than it was before. Such complications include: how to afford spending more than usual; how to encourage employees to work on holidays; how to bargain and secure limited supplies; how to know what to give without breaking receiver’s expectation and hurting his or her feelings; and the list goes on.
It has always been said that when things get complicated, always go back to the fundamental purpose as this will put us back on track. Christmas is to celebrate God’s love; thus, it should be the focus of the celebration and nothing else.
Now, what can businesses learn from this confusion on the whys of Christmas? Well, let’s evaluate and see.
Most economic models have always used the assumption that businesses’ ultimate purpose is profit maximization. At the onset, these models have not considered that the purpose of a business was conceived out of an entrepreneur’s passion; hence, making profits a byproduct. Profit is an output and not the purpose of a business. Think of it this way, engineers make money, but their objective is to build economical yet safe infrastructures; doctors make money, but their pursuit is to heal; lawyers make money, but their mission is to serve justice; and, accountants make money, but their role is to ensure fair presentation of financial information and in the process, they protect business stakeholders’ interests.
In these economic models, labor (or employee compensation) constitutes a major portion of the business’ ability to supply and meet the demand of the customers. In reality, striking an equilibrium as illustrated in the economic models between these two stakeholders, i.e., employees and customers, is beyond graphs and quantitative relationships because these models are simplified description of the economic reality. Consequently, when variables get complicated, these models might not yield the assumed profit maximization.
Again, when things get complicated, go back to the fundamental purpose, i.e., the “why.” Purpose is a powerful tool to engage and inspire stakeholders. Purpose is the direction of the business. Let’s take a look at this from two perspectives.
Employees
The goal is not just to recruit who are qualified for and needs a job, it’s to onboard people who believes in the purpose of the business as well. Hiring people just because they can do the job would likely result in having employees who care and work only for money. But when people are hired because they also believe in the same purpose as the business, they will passionately work for the realization of such purpose.
Most employees know what they do, many know how they do what they do, but, unfortunately, not so many know the “why.” Hence, it is critical for the leadership to elevate the meaning of the purpose of work so that employees are engaged and inspired in every experience. And, when this is achieved, it translates to better customer experience, which would only mean greater profits.
Most businesses have thought that their most valuable assets are their employees. Only few have fully realized that the most valuable assets are not the employees per se, but it is their engagement and inspiration. Employees, by themselves, do not create value but their engagement and inspiration do. Employee engagement and inspiration will translate into greater profits. As affirmed by Gallup, an American analytics and advisory company, high employee engagement results in 41%, 23% and 10% increase in quality, profitability and customer loyalty or engagement, respectively.
Customers
In one of Simon Sinek’s TEDx Talks, he explained that customers don’t buy what businesses do, customers buy why businesses do it. People don’t buy computers because a company “makes great computers,” people buy because they believe in “a product that is challenging the status quo.” It just happened that this kind of product are great computers as well.
Such purpose can profoundly transform a mere customer purchase transaction into a customer experience. Customer experience embodies greater meaning for the customer because it does not treat customers as mere sale but a partner, who believes in purpose and brand of the business. In customer experience, customers are empowered by valuing their feedbacks and ideas and they are considered as brand carriers as well. It is the next level of just selling goods and services. On the business side, this is what substantially differentiates a business from its competitors. Differentiation provides profits for businesses as it makes no alternative or substitute to what the business offers.
Purpose and profit are not opposite concepts. Profit is the byproduct of a well synthesized business purpose. So, when profits are waning due to complications, go back to the fundamental purpose of the business. It will give you direction, and probably, it will make you go beyond profit.
As published in The Manila Times, dated 22 December 2021
