From Profit to Purpose
Social Entrepreneurs often start off with an idea of how to solve a fundamental human problem in a new way. In order to scale their work to make a bigger positive impact in the world, sooner or later they need to build an organization and make it profitable.
In this they are confronted with standard business problems of how to structure the work in an efficient way. They can either go the traditional way of top-down predict-and-control management or choose a structure that is more aligned with the New World of Work.
In our view there are five core principles that characterize the New World of Work: purposeful, holarchic, autonomous, dynamic and transparent.
Social Entrepreneurs totally get the first principle, purposeful: they are in for the purpose, to do good in the world, to fulfill a social mission, alleviate suffering, or empower people. They are not primarily in for the profit, they are in for the purpose. Hence, they often are involved in the non-profit or NGO sector.
Yet sometimes they choose legacy organizational and legal structures that hold them back in the fullest expression of their purpose. It is important to transcend the Non-Profit versus For-Profit distinction in a move towards For-Purpose.
Money or profit is to the organization what oxygen is to the body — it keeps it going and enables it to follow its purpose. It is not a true purpose in itself, but it is an important metric. We don’t just live to breathe, but without breathing we won’t live long.
Alternative ways of structuring the work via self-management have been pioneered and reliably demonstrated in the last decades. Top-down management is no longer the default option, as practices like Holacracy demonstrate.
These practices enable a holarchic, organic structure of nested expression of purpose (via subcircles and roles). They enable a great deal of autonomy in executing work with full authority within clearly defined roles. They enable dynamism that comes from sensing-and-responding to reality with quick iterations. They foster practices of transparency, since sense-and-respond requires maximum visibility of data within the organization.
What are the new structures that make these principles practical, instead of just aspirational?
We at encode.org have pioneered new legal, financial and social foundations. We call it the For-Purpose Enterprise.
The For Purpose Enterprise consists of the 3 Containers of Organization, Company and Association — each with clear focus areas and clear agreements.
At the center of it all is the Purpose Agent. It is a new species of worker. Self-Management liberated the work. The For-Purpose Enterprise liberates the worker and makes purpose the new boss. It provides structures that minimize personal power holding, encode self-management in the legal structure of the entity and create new financial and investment vehicles to capitalize it.
All of this empowers the Purpose Agent to work, earn and live for-purpose.
Do good in the world in a new way: as a Purpose Agent.
