Profit is to businesses in some respects what pleasure is to people.Â They are both goals that are pursued and both are generally considered worthy of being maximized. Â Because of their similarities insights into the pursuit of pleasure can also provide insights into the pursuit of profit.
Pleasure seeking seems simpleâ€”if we want to maximize our pleasure, we need to figure out how our pleasure can be maximized and go for it.Â The interesting reality however is that this framework is not quite true.Â Known as the paradox of hedonism, people have recognized that pursuing pleasure can actually be self-defeating or self-limiting.Â Directly seeking pleasure makes pleasure difficult to achieve and even more difficult to maximize.Â (For an early explanation of the paradox, see â€œThe Methods of Ethicsâ€ by Henry Sidgwick.)
For example, suppose Stuart picks up a hobby just because he believes it will maximize his own pleasure.Â He is so focused on maximizing pleasure, however, that he does not actually enjoy the hobby and thus receives no pleasure from it.Â Stuart then hears from a love-struck neighbor that falling in love is the greatest pleasure possible.Â Unfortunately for Stuart falling in love is impossible because he frames all of his relationships in terms of his own pleasure and cannot care about anything or anyone else.
The solution: in order to get more pleasure, Stuart should stop directly trying to maximize it. Â He must genuinely care about things distinct from pleasure and then let pleasure be felt as a byproduct.Â Likewise, by genuinely caring about others he feels more pleasure in the long run.Â This means sometimes choosing options that do not provide him with the most pleasure; instead of taking the whole of a much smaller pie he can get a part of a larger pie that exceeds the small one.
What does this say about businesses and the pursuit of profit?Â Take for instance a food server who aims to maximize her tips.Â The problem is a food server who only cares about getting the best tip is not a very good food server.Â She cannot create a genuinely positive experience for her customers and she does not help the servers around her or their customers because she doesnâ€™t really care about any of them.Â Instead, a good food server would help when needed, get help when needed, and focus on caring about her customers and others, at which point the good tips will naturally follow.Â Like food servers, businesspeople face the same problemâ€”focusing too much on the bottom line might actually limit their bottom line.
It is counter-intuitive but taking a profit-maximizing approach for every business decision really can end up being profit-limiting.Â Like Stuart, a business needs to recognize that profit is a byproduct and therefore must not â€˜put the cart before the horseâ€™ by focusing on profit and not what creates it.Â This means focusing on the value that a business offers to the world.Â A business can unleash their profit potential by balancing their own immediate financial interests with the interests of othersâ€”through CSR initiatives and by integrating positive impact-driven missions into the core of their business. Â While these things wonâ€™t have an immediate or direct effect on the bottom line, they allow a business to jump the curve to a whole new level of opportunity by leveraging intangible drivers of growth like goodwill and reputation.Â This is the approach of the benefit corporation movement, a network of businesses that combine the profit motive with a desire to create a public benefit.Â In the long run, the fact that benefit corporations have other goals beyond profit could very well make them more financially sustainable and profitable than more short-sighted and single-minded businesses.
While a business could act as if they had non-profit goals even if they did not, such an approach will not translate to the success being discussed.Â People and businesses who truly care will ultimately distinguish themselves from those who donâ€™tâ€”those who actually care can leverage the passion and fulfillment that comes from being a values-based organization into a thriving business overall.Â Given the inherent difficulty in faking it, what reason would there be to do so when the alternativeâ€”genuinely caringâ€”would be relatively easy and likely yield even better results?
The â€œbusiness caseâ€ in favor of CSR seems to be made all of the time, concluding that CSR benefits a companyâ€™s bottom line. Â The parallel I have drawn between pleasure and profit is intended to support that case.Â CSR is a strategy for long-run profit potential.Â Counter-intuitively, shifting strategic focus away from profit can increase profit overall.Â By altering motives and intentionsâ€”by having an interest in the value and impact your business has on the worldâ€”you can actually get better financial results.Â The paradox of hedonism teaches us that the best way to maximize profit is not just to take a more open-minded approach to profit-maximization, but to actually reduce the profit motive itself and let profit be the fortunate byproduct of everything else.Â Businesses should therefore embrace a values based approach; by helping and caring about the world they can make themselves better off as well.