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Why there's more to business than making money

  • Opinion
  • September 19, 2017
  • Antonia Mann
Why there's more to business than making money

The search for happiness and fulfilment is also less correlated with money, says TRA's Antonia Mann.

“The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.”
– Robert Kennedy, 1968

As a measurement of progress and prosperity, the GDP (and GNP) has been controversial since its inception. Focused on economic progress to the exclusion of the welfare of people and environment, it has nevertheless become the most important indicator of the success of a nation. 

When we look at the cultural milieu today and the values and beliefs that many people hold (not all people, admittedly), much of it is a reaction to the results of single-minded pursuit of economic development embodied by the GDP.

Following financial crises, high-level corruption without punishment and rising inequality, anti-capitalist and anti-establishment sentiment are at high levels. The ever-more dramatic effects of climate change are forcing acknowledgement of the correlation between industry and climate change, and the realisation that solutions to social and environmental problems are intrinsically tied to the economy (again, admittedly not for all people). 

The search for happiness and fulfilment is also less correlated with money. Instead, it is sought through balance, well-being and self-growth. At street level, these values can be seen in the growing desire for jobs that are fulfilling, the shift to holistic health and mindfulness, conscientiousness about the services and goods we choose to buy, and indeed eschewing material goods for rewarding experiences. While one may say this cultural outlook predominates in affluent developed countries, as more people around the world reach middle-class status, similar expressions of these values are expected to grow.

Because the GDP measure was developed at a time when physical manufacturing, production, quantity and output was the basis of the economy, it does not reflect the very visible changes in how we work, what we value and what we pay for today.

Today’s workforce is digital, mobile, flexible, with diverse family and household roles. We live in a service-led and experience-orientated economy. And in the digital age, much of what we value is intangible; things that we used to pay for, like communications and entertainment, are now free. Nor is the GDP great at accounting for the human creative; intellectual and network capital are today’s growth drivers – especially so in a country like New Zealand which is geographically remote but economically affluent and thriving on being technologically advanced.

Alternative facts

The emergence of alternative numbers, rankings and indexes that measure how we treat people and our environment (rather than pure production) demonstrates the immense value shift happening around the world.

World Happiness Report: At the top, initiatives such as the World Happiness Report launched by the UN in 2012, Social Progress Index and the OECD Better Life Index track progress at a national and global level. New Zealand currently sits at eighth in the World Happiness Report.

The B Corp certification: Currently, the journey to doing “progress” and “prosperity” in a better way is full of tensions and difficulties for both businesses and people. From TRA’s research, we know that people want to shop responsibly for what they can afford, but the time and effort required to figure out which businesses and brands align with their values is a barrier. In response, alternative indexes provide figures that both call companies to account and present meaningful indicators to people.

For instance, the B Corp certification is earned by businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability, aiming to drive a movement whereby “one day all companies will compete to be best for the worldTM, and society will enjoy a more shared and durable prosperity.” As a generic purpose for business, this resonates much more credibly with people than brands that appear to randomly adopt a cause or jump on the bandwagon of a current social issue when the brand has no history or inherent connection with it.

The Empathy Index: This index provides a score for companies based on employee perceptions of the company, diversity and inclusion initiatives at the company, and environmental factors including carbon emissions, forestry and water usage. It is calculated by using a combination of social media analysis and a panel selected from the World Economic Forum’s Young Global Leaders. The top 10 companies in the 2015 Global Empathy Index doubled in value and generated 50 percent more earnings compared to the bottom 10.

The article by Tim Gregory in the latest issue of Frame talks about the role that employee experience plays in carrying the company’s brand into the market place. A company’s performance on the Empathy Index could play a big part in delivering the overall brand experience which includes the customer experience.

The Fashion Revolution Transparency Index: I observed the Fashion Revolution Transparency Index being greeted with excitement and relief by fashion-conscious colleagues when it was first released. The report reflects the desire to know how transparent fashion companies are, in an industry where we are most confronted by the ethics of the choices we make. “Now I know where I can shop without guilt,” was the general sentiment. Shopping without guilt provides a strong emotional reward, and brands that reward people at an emotional level show their customers that they understand them and have listened to their concerns.

Aspiration, do well do good:  Ethical finance firm Aspiration brought meaningful numbers even closer to the individual with the recent launch of a tool on their app. Customers are able to track how environmentally friendly a business is and how well the companies they buy from treat their community and employees (note again the role of employees in forming brand impressions). They make themselves more valuable to people by connecting with them in the broader context of their lives.

A single measure is not enough

GDP provides a good analogy for why focusing on a single measure of the world of the customer is not enough. It may have reflected the priorities of the times but new indexes show what the priorities of people are today. The meanings of success and prosperity today encompass more than money and profit, underscoring the fact that we cannot view people purely in transactional and economic terms. Their values and belief systems, the broader context of their lives, will allow brands to connect with them more meaningfully.

Antonia Mann is a cultural strategist at TRA.
  • This article first appeared in TRA’s publication Frame: The Human-centric Issue. To receive a copy, please email subscribe@tra.co.nz.
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