It is good sometimes to think about the most basic of things. Ideas like ‘why am I here?’ and ‘why am I doing this?’ We who are devoting our time and talent to business, especially Business as Mission, need to remind ourselves why we are doing it.
I graduated from business school in 1969, one year before Milton Friedman published his star-studded proposition that the sole purpose of business was to create value for the shareholders. He went on to win a Nobel Prize in economics and to be considered by The Economist as “… the most influential economist of the second half of the 20th century…possibly of all of it.” Friedman had already been influencing professors in the 1960s so to nobody’s surprise we students parroted his rationale on our economics exams. 1 Really?
All that started to change in the late 1900s and early 21st century. Even though Jack Welch built GE (following Friedman’s ideas) into a giant of a company, by 2009 he had turned away and stated that “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. In 1979, Quaker Oat president Kenneth Mason stated:
Making a profit is no more the purpose of a corporation than getting enough to eat is the purpose of life. Getting enough to eat is a requirement of life; life’s purpose, one would hope, is somewhat broader and more challenging. Likewise with business and profit.”
Enter Peter Drucker who stated in his book, Management, “There is only one valid definition of business purpose: to create a customer. . . It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. . . The customer is the foundation of a business and keeps it in existence.”
I am reminded of a trip to China in the early days of IBEC when we tried to serve missionary workers who thought they could start a business based on a hobby interest they had. Ken Leahy, our lead consultant on that trip drilled it into my head, “Larry you don’t have a business unless you have a customer.”
There is a reason Simon Sinek’s TED talk2 on the “why” has been viewed by millions. He asserts that profit is a result and not the purpose. The purpose, cause, and belief is what drives a business. People respond to why you produce something.
And so, it is now 2025; what is the purpose of a Business as Mission business? Jo Plummer in her BAM Global article states a possible purpose of BAM.“It is an answer to the prayer, ‘May Your Kingdom come on earth as it is in heaven’, as people and communities are positively transformed through for-profit business activities.”3 She goes on to say that “Business as mission intentionally leverages this intrinsic power of business to address spiritual needs, hand in hand with social, economic, and environmental needs.”
So, there is profit – yes; otherwise, it is not a business. Yet, that is not the purpose. As we stress by using the lean canvas tool, the customer is key (people are key) – the customers economic life (jobs), spiritual life (disciples of Jesus), and community in creation.
Maybe we could just say the purpose of BAM in one word – TRANSFORMATION. We bring God’s Kingdom to earth.
- Of course, Friedman’s ideas were not all innovative. Management guru Frederick Taylor had already supposed that the firm was in business to make profit for the shareholders.
- https://www.youtube.com/watch?v=u4ZoJKF_VuA
- https://businessasmission.com/what-is-business-as-mission-a-short-introduction/
Larry W. Sharp, BAM Support Specialist, IBEC Ventures
Larry.Sharp@ibecventures.com