At larger companies, the phrase “maximize shareholder value” has become a trite summary of what they believe is their core purpose. At smaller companies, it’s usually translated into plain English: “Make the owners a bunch of money.”
If you dig deeper, the actual purpose is almost always different. Starting a business is actually a pretty unreliable and difficult way to make money. In fact, most businesses spend their first few years losing lots of money. On top of that, it turns out that the lust for “hitting the numbers” and “meeting expectations” has created a sick business environment, where short-term tactics are rewarded and long-term strategy is talked about but ultimately ignored.
If money were my primary motivation back when I started Forty, I would’ve just kept my high-paying cubicle job instead and put that money into real estate or something. Even as successful as our business turned out to be, I don’t have the money I would if I’d chosen to make dollars my primary priority. Instead, I walked out on a great job and began one of the most complicated, harrowing, gut-wrenching journeys someone can take in their careers. Yet it was still worth it. Why?
Most business owners only partially understand their own motivations. In the United States, most would give “having freedom” or “being my own boss” as the primary reasons they went out on their own. (That’s not surprising: according to cultural researcher Geert Hofstede, the United States ranks #1 in the world on the Individualism index.)
However, the real question you should be asking is, “Freedom to do what?” That’s the question that will really help you uncover the true purpose behind your business.
Before starting Forty, I was frustrated with what I saw in our industry. I felt pressured to make decisions were financially beneficial but unfair to clients. It seemed like marketing was becoming overly focused on short-term numbers and losing sight of the big picture. My industry was becoming dehumanized, creating a variety of injustices for both agencies and their clients.
I was young, though, and it was hard to get anyone to take my opinions seriously. So I left and started my own company, where I could do it the way I thought it should be done. Beyond simply having freedom (and the eventual goal of making some good money), it was the idea of championing humanity that was (and still is) the driving force behind our company.
In order for your company to establish real roots, you have to unlock the deep purpose that explains why your company really exists. Unlocking that sense of purpose within your company is the most important business move you’ll ever make.
