Our next big ‘Whys’ are close to my heart, and I’ve spoken about them at several conferences:
- businesses focus too much on short-term profits instead of long-term growth;
- it’s time to redefine success to include happiness, not just financial gain.
It’s not just altruistic to think in terms of what will give your customers (and employees) the best chance at success and happiness—it’s good business.
We’ve seen that meeting customers’ needs, making tasks easier for them, and ensuring they enjoy the interactions directly relates to higher growth and success, and that companies with a purpose beyond profit make more money.
This isn’t new news.
Jim Collins and Jerry Porras’ Built to Last (1994) found that companies guided by a purpose beyond financial gain returned 6x more to shareholders than profit-driven companies, according to data collected between 1926 and 1990.
More recently, research led by a team from McKinsey Global Institute in cooperation with FCLT Global found that “companies that operate with a true long-term mindset have consistently outperformed their industry peers since 2001 across almost every financial measure that matters.”
So why aren’t we all reaching for that higher purpose?
Probably because we’re bogged down in metrics.
"What happens in most organizations that have no overriding purpose other than profit? In a subtle alchemical shift, the metrics fill the vacuum, muscling out any wider purpose with the imperative of hitting the numbers." - Simon Caulkin
At Hotjar, we believe that when you’re focused on profit in the short term, even good people end up taking actions that are detrimental to themselves, the environment, their employees—and lead to significant harm.
It’s what we see happening all too often.
And on the employees’ side, it kills creativity, encourages toxic workplaces, and takes away from people being able to flourish in their jobs because they don’t have a sense of meaning and purpose to what they’re doing.
A 2017 Forbes article on employee engagement by Dan Pontefract supports this idea:
"If the organization only stands for profit, power or bureaucracy there is a very good chance employees fall into the job mindset, working solely for the paycheck and likely (or eventually) becoming disaffected."
Purpose inspires people. Inspired people do better work, are happier doing that work, and are happier outside of work as well.
It’s all connected.
And when you realize that, running a business with a higher purpose becomes both the right and the logical thing to do.
Incidentally, this ideology is baked into Hotjar’s very foundations.
David Darmanin came from working in tech environments that were profit-driven and short-sighted. That experience is one of the reasons he founded Hotjar in the first place, to be the antithesis of the ‘profit-first’ mentality and to put people first instead. We believe it’s how we managed to grow from €0 to €10M in just about 3 years without external funding (see The Hotjar Story Part 1 and Part 2).