Purpose vs Profit: How has business changed in our 'new normal'?

For the past 50 years, the primary role of business in society has been to maximise shareholder return, a consequence of Milton Friedman's seminal article in the New York Times in 1970 in which he stated that "any other use of shareholders money was irresponsible".

Given the current state of the world, the pandemic, with climate change, global warming, depletion of our natural resources, over population, catastrophic pollution and growing inequality to name a few, it feels like the idea of business being a force for good, and playing a bigger role in society beyond financial maximisation, is the obvious thing to do.

Unfortunately, many business leaders don’t see it this way.

The world of business is about making money and “purpose” is often seen as getting in the way of making money. It’s perceived to be a “feel good” distraction that takes the eye off the ball, costs money, and erodes the carefully crafted and sought-after profit number. This number is the sole purpose many businesses exist, and it is the most significant factor that business leaders are judged on.

So, when business leaders see the word “purpose”, their immediate assumption is that it is going to cost them money, making their profit number that much more difficult to achieve.

Mike Middleton - Founder and CEO of Marty McFly - and Andrew Ross - CEO of Chaos Theory - have joined Brent Lindeque to chat about where business is going in our 'new normal'.