Why Profit and Purpose go Hand in Hand
Imagine yourself waking in the morning. It’s a Monday so you start to think about the start of your working week, and you heart sinks. The company you work for say that they really care about their people, that its all about the customer and that they are doing lots to reduce their carbon footprint –all sounds great, but you know in your heart that all that matters to the directors of the company is
how much profit they make.
You know that your team are behind on their sales targets, so you’ll be getting grief from your boss – as you know he’ll be getting grief from his boss. All you want to do is turn over and go back to sleep. Does this seem a bit familiar?
Contrast that to waking up knowing that the company you work for has a clear purpose that you relate to, that your manager genuinely cares about your well being and that while you are behind on
your sales targets, you know your boss will support you and your team identifying productive ways forward. You spring out of bed all raring to go!
For 15 years, I owned Thornton’s Budgens, a supermarket in North London. I started this business after a mid life crisis with a desire to create a business that wasn’t just about short-term profits.
With my colleagues we developed our purpose – ‘we are the community supermarket that really cares about people and planet’ and developed a manifesto on how we would deliver this. It was a
purpose that most team members could relate to and, as the team had been part of its development, everyone felt they had ‘skin in the game.’
With this purpose in place, we achieved so much – we were the first UK supermarket to stop giving away free carrier bags (back in 2006), we had a farm on the roof of one of our stores and we supported our communities with so many fantastic initiatives. One of our greatest achievements was in 2018 when we were the first UK supermarket (and second in the world) to introduce plastic free zones making 1,800 plastic free lines available to our customers.
According to a number of CEOs from leading grocers, our initiative shifted the relationship between supermarkets and plastic – globally. We did that at the same time as further increasing loyalty with our customers and increasing our total store sales by 4% (ahead of the market) – in the supermarket business that’s a big number. In fact, every time we lived our purpose, our bottom line benefited.
In some respects, our most impressive result was that our average length of service was 8.5 years – this in a central London supermarket, where other retailers did well to keep people for a year or two. Consider how much money we saved in recruitment and training, and how much more efficient we were with a team who were masters of their jobs?
In 2016, the UK government introduced a 4-year phased plan to a new living wage and discounter Lidl went straight to the year 4 level (offering 25% more than the most other retailers). Most independent supermarkets in London lost lots of their staff; yet we did not even lose one single person.
People preferred to stay with the Thornton’s Budgens family than take what would have been a substantial pay rise. They were valued, cared for and were working for a purpose they believed in – as my colleague Jahid said, ‘appreciation is more important than money.’
What we had created was a psychologically safe environment for our team members to thrive, to focus on what they were good at and to work as a team. We call this ‘putting the heart back into
Pretty much every CEO I have recently talked with has said that their biggest issue is recruitment and retention. The so called ‘Great Resignation’ has led so many people to reconsider their lives – and
those working for companies like that described in the opening paragraph are quitting in droves. Yet I know that those companies with a meaningful purpose are not struggling to recruit and retain in
the same way.
I sold Thornton’s Budgens last year to concentrate on sharing what we have learned with other business leaders, beating the drum for more authenticity and care in business. I am passionate about this approach to business as I know it works and I believe that in tumultuous world we live in, we need more heart in all aspects of our lives.