The Foundation’s mission has been summarised as creating responsible entrepreneurs for the common good. Often people express surprise that the promotion of entrepreneurship can be linked to the common good. But we have become convinced that having noble intentions is not just a nice to have but essential for significant and sustainable success.
As Mr Gray says: ‘Acting in society’s interests can be and is good business. Over 40 years ago Allan Gray was founded with this conviction and ethos, yet has managed to prosper in South Africa’s intensely competitive field of asset management.’ As he further explains in a recent interview, “Making a profit has never been an end in itself, but a consequence of pursuing a sense of purpose; to really want to make a difference, not only for clients but all other stakeholders, from employees to the community, the taxman and society at large. It is only if the client is satisfied that the firm is enabled to help more and more clients. Maximising shareholder value is a crazy philosophy because it’s short term; it’s not sustainable.”
In fact such is the strength of this belief, that the Allan Gray Centre for Values Based Leadership has been established to provide further intellectual momentum and broader understanding of this conviction that a business cannot only exist for profit. There needs to be a larger purpose. Talking about these two, making money and making a difference, Lisa McLeod points out: “Creating a culture of purpose is how you do both!”
Recently venture capitalist, Anthony Tjan made the following observation: “It turns out there are many ways to make a billion dollars: real estate, investing, gaming and entertainment, retail, technology, and good old-fashioned inheritance. But the most interesting (and most respected) businesses and personalities are also the ones with the strongest and most authentic purposes behind them.” This should not come as a surprise because creating an exceptional business is hard work and in order to put in that amount of effort one needs to be answering the “why” question for a business (why are we doing this?) Only answering the “what” question (what does our business do?) is not sufficient to sustain the level of commitment required to build a great business. As business author Gray Hamel states in his book, “What Matters Now” says: “A noble purpose inspires sacrifice, stimulates innovation and encourages resilience.”
Yet it is not only resilience that purpose inspires to support the emergence of exceptional enterprise, there is a further dynamic that makes purpose essential to the process. If your intention is to build great things, it helps to be driven by a spirit of significance. As Paul Graham states “The startup founders who end up richest are not the ones driven by money. The ones driven by money take the big acquisition offer that nearly every successful startup gets en route. The ones who keep going are driven by something else. They may not say so explicitly, but they’re usually trying to improve the world. Which means people with a desire to improve the world have a natural advantage.”
Finally we have moved into an era where we now have the tools and technology to pursue purpose in previously impossible ways. We are able to move out of the “red ocean” of competition and controlling of scarce resources to the “blue ocean” of new ideas and building new things. These possibilities enable purpose to drive new innovation and shape the future. In fact Aaron Hurst in the Purpose Economy, suggests that after the agrarian, industrial and most recent information economy we are now moving into the purpose economy, embracing community and creative endeavour.
These shifts remind me of the words of Vivek Wadhwa from Singularity University at the Global Entrepreneurship Congress last year: “This is the most innovative time in human history – when entrepreneurs can do what only governments could before – solve humanity’s grand challenges.”
Now there is a purpose worth making the bottom line.