But what these channels are most known for today are their reality series and pseudo-documentaries like Here Comes Honey Boo Boo and Jon & Kate Plus 8. After starting out with lofty ambitions to educate and inform, how did they end up peddling brain-dead entertainment?
These companies were not purpose-driven, and instead placed
profit-making as their highest priority. Reality television was too profitable
for programmers to resist. Reality programs are relatively cheap to produce and
are like catnip for the viewing public. Most networks have jumped on the
bandwagon – the number of reality shows skyrocketed from four in 2000 to 320 in 2010.
So you might wonder what’s the big deal? Ultimately
these networks are in business to make money and have evolved their offerings
to what the market wants. And doesn’t the Friedman doctrine
declare that the only concern a company should have is to increase profits for
itself and shareholders?
Well, it turns out paradoxically that companies with a purpose beyond profit tend to make more money. These companies take
the leap of faith that if they deliver on their purpose, they will ultimately
be rewarded monetarily. For most companies, the purpose is delivering a customer benefit that makes customers
happy and promotes positive word-of-mouth, which ultimately drives long-term
growth. For social enterprises,
the purpose is to make a positive impact on society.
Being purpose-driven has a positive effect on company culture.
Employees will self-select into the company because they are motivated by the
purpose. The purpose becomes the rallying cry that inspires employees to
overcome the most difficult of challenges. Metrics derived from purpose provide
the best feedback on what needs to be done to improve.
When profits and revenue are the only metrics that are
measured and discussed by leadership, the company may begin to drift and start
making decisions that are misaligned with their customer benefit. This can lead
to bad profits. We all have purchased products and services from companies that
seem to have only profit in mind. We badmouth them to others at every turn and
can’t wait to find a better alternative. These companies probably don’t have rosy
long-term prospects.
Putting profits over purpose may pay off in the short term,
but it’s almost always a loser in the long term. This is not to say that
profits don’t matter (they do!), but the company purpose should always have
primacy.
Apple and Facebook are recent examples of companies that
reaped big monetary rewards by putting purpose before profit.
We learn in Walter Isaacson’s biography Steve Jobs how the Apple CEO delayed the launch of the original
iPhone because it didn’t quite meet the bar of delivering something “insanely
great.” According to Jobs, “the whole device felt too masculine, task-driven,
efficient.” The team redesigned the case, requiring an expensive redo of the
componentry inside. On release, the iPhone was an unprecedented success, disrupting the mobile market and becoming a major driver of Apple’s revenue and profit
growth.
In the case of Facebook, David Kirkpatrick relates in The Facebook Effect how early on, Mark
Zuckerberg turned down advertising revenue that would have compromised the site.
This was despite the fact that the startup was cash-strapped with expenses
growing every day. Refusing to compromise on the user experience that would “give
people the power to share and make the world more open and connected” paid off.
Facebook would eventually become the world’s dominant social network and a hugely
profitable company.
If you are an entrepreneur launching your new enterprise,
think long and hard about your purpose beyond profit. Make that purpose central
to your pitch to prospective investors and employees. Make achieving that
purpose what drives your company forward.
On the other hand, if you’re just in it to get rich, then
perhaps reality
TV is the way to go (although the boom days of reality TV may be over).