Contributor, Korn Ferry Institute
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How Purpose and Profit Can Peacefully Coexist
Daniel Goleman is author of the international best-seller Emotional Intelligence and of the forthcoming Optimal: How to Sustain Personal and Organizational Excellence Every Day. He is a regular contributor to Korn Ferry.
A few weeks ago, we shared data supporting the claim that for some employees, money is not the motivator it once was.
But here’s the thing: Zeroing in on what employees find most meaningful doesn’t mean forgetting that money matters. In 2021, the Census Bureau estimated that close to 12% of Americans—or roughly 38 million people—were living at or below the poverty line. With recent increases to the cost of living, combined with more and more layoffs, money is definitely something workers are concerned about.
This conversation often surfaces a misunderstanding about purpose: a deep-seated belief that purpose and profit are at odds.
In some cases, this misunderstanding looks like a belief that centering purpose in decision-making will inevitably detract from the bottom line. In other moments, it looks like believing that infusing more purpose into the employee experience is an excuse to pull back on benefits and fair compensation.
This tension—between purpose and profit—takes on a special meaning during the holidays. For individuals, the holidays are historically about celebrations, community, food, and family time – traditions that bring people together. For retail businesses, the season is often about trying to schedule sales in order to maximize yearly profit. For example, like many retailers, the bookstore chain Barnes & Noble does one-third of its annual business in the final six weeks of the year.
But with each passing year, we see more and more businesses struggle to figure out how to hold purpose and profit at the same time. Many retail chains that are historically open on Thanksgiving Day, closed their doors this year in what workplace experts say was an effort to respect the needs and well-being of their employees. Meanwhile, departments like technology and customer service continue working overtime to support the increase in online sales.
What’s more, for some employees, holiday closures aren’t necessarily what they want right now. As AI threatens the jobs of thousands of hourly workers—especially those in big-box retail—many are living in fear of losing their income. Says Sharon Egilinsky, a senior client partner in Korn Ferry’s Organizational Strategy and Business Sustainability practices, “Those teams are not as focused on work-life balance. They just want to keep their jobs.”
This tension around when to prioritize money and when to prioritize meaning brings to mind psychologist Abraham Maslow’s hierarchy of needs. A psychology mainstay, Maslow’s framework shows humans progressing through a pyramid of motivators: physiology, safety, love and belonging, esteem, and self-actualization. Often cited in business presentations and leadership lectures, the theory proposes that it isn’t until we have our most basic needs met that we can fully embrace a sense of purpose and meaning, making it the foundation of how we act and behave.
In embracing purpose, this is something every leader must consider. One company that has navigated purpose and profit particularly well is REI, the purpose-led outdoor cooperative of over 23 million members. In 2015, REI did what no large retailer had done to date: closed all their operations on Thanksgiving and Black Friday under the banner #OptOutside. The initiative paid every employee to take the day off and spend it in nature, a way of encouraging everyone to rethink consumerism and connect to the organization’s purpose: to “awaken a lifelong love of the outdoors, for all.”
That first year, inspired by REI's example, more than 1.4 million people and 170 outdoor companies, nonprofits, and organizations participated. In 2016, when REI did it again, participation nearly quadrupled. In 2022, the program became a permanent employee benefit. During this same time, REI put an additional $50 million toward pay raises for hourly employees and delivered another $92 million toward employee retirement and bonuses.
As more and more leaders are urged to zero in on the things employees find inherently satisfying—the things that light them up from the inside out—it will be important to remember: Purpose isn’t just a path to engagement and wellbeing, it’s an add on to all of the other things people already care about.
Our hope is that in 2024, the purpose movement adopts a both/and mindset—that there are more examples of companies moving away from thinking in terms of “profit versus purpose” and towards thinking in terms of “meaning and money at the same time.”
Co-written by Elizabeth Solomon