As societies and economies become increasingly more sophisticated while interweaving global complexities and dependencies, we are focused on the immediate results of whether we are producing something that is bigger, better and faster. In the search for this, we’ve lost sight of whether what we build is actually generating value or social impact for society as a whole. We rely heavily on the wealthy and established corporations to tell us what we need, or how much money will be allocated for things that are more important than just profit. However, even that is just a side note in the ever increasing importance of value generation with true impact.
Here are 3 Reasons We Should Shift Our Focus Back to Impact:
(1) Short Term Profits Are…Well, Short Term
It’s often said that financial investing is a zero-sum game. Because one party is able to exhort great profits, it’s supposed to mean that someone else will lose in the process. However, it may be because we have been playing the wrong game all along. Chasing the almighty paper dollar without any clear view of the consequences of our actions has left us in economic ruts time and time again. It can even be said that financial regulation, while protective for a certain amount of time, actually created a massive pinhole risk that could only be detected by the most sophisticated of investigators, oftentimes when it was too late to triage the bleeding. We should build purposeful companies from the ground up with a mission statement that holds impact for all stakeholders. With this methodology we don’t have to focus on the financial tools at hand, but rather the value that companies are generating in the long term.
(2) Impact Is Not A Buzz Word
As we were busy building economy, we somehow bifurcated the concepts of fiscal return and societal return. It was originally one and the same in that we had to build things that created value in order to build economy. It seems that today we have reversed our priorities and ended up in a bad situation, overvaluing technological innovation without being able to comprehend the long term impact or even true value for such innovation. Selling applications and games are more important to investor returns than sustainable energy sources and improving ways of delivering and measuring the impact of education. Because of this, we’ve put away the concept of impact into the back of our minds and have now officially branded it as a buzzword as opposed to our primary focus. We need to bring it back to the forefront of our minds as we create new startups and stop thinking about it as a collateral outcome in the new age of entrepreneurship.
(3) Start Early, Build Big
A startup traditionally was not charged with creating impact for society. They were too busy scaling and creating financial benefits for their investors. Large corporations that were already generating enough profit were then charged to ‘give back’ to society with the profits they had earned on the backs of others. That needs to change immediately. Every startup should be charged with purpose – purpose to generate impact as well as profit. Not being profitable and generating great returns for investors go against the current paradigm of capitalism.
Doing well by doing good. That’s what capitalism is all about.
- Ralph Waldo Emerson
By Sang Lee