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The business case for doing good


Illustration by the talented Jay Roeder

This is a guest post by Andreana Drencheva, Doctoral Researcher at the Institute for Work Psychology at Sheffield University – see her full bio at the end.

Education institutions, media outlets, and society, in general, have socialised us to believe that businesses exist to make profits and only profits. But happy startups and social ventures are showing us that a business can be profitable and do good at the same time. Even more, doing good can be the reason for being profitable because it enhances both performance and innovation.

Most companies today have vision and mission statements that are supposed to guide and inspire everyone in and outside of the organisation. But actually understanding and seeing the impact of your work and your organisation in the world can be a stronger influence on performance than a few warm and fuzzy sentences on a corporate website.

Individuals who believe that their organisation and their work do something good for others have more energy and experience more positive emotions and moods.

They also spend more time, exert more effort, and persist in difficult, unpleasant, and challenging situations. They are more proactive and take on more personal initiatives to contribute to their organisation beyond their job duties.

These aren’t just nice-to-have perks for corporate culture, but behaviours that have a strong effect on increasing productivity, accuracy, effectiveness, and revenues.

adamAdam Grant’s experiments in natural work environments with university fundraising callers provides powerful support for the effect of understanding how one’s work benefits others on revenues. Fundraising callers who directly saw the impact of their work among scholarship recipients increased their average weekly revenues by up to 400%. Most likely such an increase is not sustainable over time, but it showcases that doing good socially can also lead to doing good for the business.

Not only does doing good increase positive emotions and moods, but such positivity is associated with higher levels of creating new ideas by increasing flexible thinking and problem solving even in complex tasks. While enhancing effort, productivity, and effectiveness are important for increasing profits, creativity and innovation are much more relevant for our fact-paced and complex world.

As the business world becomes more competitive, global, and uncertain, creating innovative ventures and empowering the individuals in them to be more innovative is essential not only for business success, but even for business survival. For something to be innovative, it needs to be both novel and useful. When people are motivated to do good, they are more likely to come up with ideas that are both novel and useful. They can put themselves in the shoes of other people and that new perspective can directly enhance creativity by providing access to new ideas, viewpoints, and information.

“After ideation, concern for benefiting others can help filter out ideas that are novel but do not solve the problem at hand.”

This has a direct impact on launching successful and profitable products and services, but also on creating new initiatives and processes within the organisation.

What can we do to harness the power of doing good?

Obviously, not every organisation is the Red Cross, but there are things all organisations can do to help their employees see and understand how their work changes the world. Even people whose entire job is to save others, think firefighters and lifeguards, do not always realise or remember the good they do on a daily basis.

Having a clear mission and vision is important, but even more so is to design jobs that allow people to experience and see the impact of their work first-hand:

  • Meeting with customers, clients, coworkers, and suppliers on a regular basis and receiving feedback are simple, relatively inexpensive, and powerful tactics.
  • Designing a collaborative, empathetic, and customer-oriented corporate culture from the very first days of the organisation is also very powerful.
  • Last but not least, creating a venture that does good as a part of its business model makes the other tactics much easier to execute.

 adAndreana Drencheva is a Doctoral Researcher at the Institute for Work Psychology at Sheffield University focusing on exactly the intersection between business, purpose, people and profits. She is really interested in how people design ventures that are profitable (or at least non-loss) and at the same time do something meaningful for themselves, their employees, and their communities. In essence, her research and work is all about creating and leading with meaning.

*Do Good Work image by the talented Jay Roeder

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