ADAM CRAKER: Profit without purpose is meaningless — four lessons learnt from running an NPO

I have always been inspired by the saying that “doing good is good for business”, and in 2014 decided to put that into practice. At the management and technology consulting firm where I am CEO, we decided to define our purpose beyond pure business. We decided, based on our value system and vision, our purpose was “to grow people, grow business and grow Africa”. It was the process of putting our purpose into action that has been pivotal to our success.

I am proud of the fact that that we were winners of the Conscious Companies awards in 2018 and are the largest B Corporation in Africa, aligning ourselves with more than 5,700 companies in 85 countries in 158 industries, all of which have the goal of making business a force for good.

In March 2020 this belief in purpose was put to the test when SA and the world faced the oncoming storm of Covid-19. It was clear to us and two of our business partners that lives and livelihoods were at stake. How were we to respond?

It was like arriving at the scene of a terrible road accident. There are three choices: drive away and get oneself to safety; sit in the car and wait for the emergency services to arrive; or get out of the car and run towards the accident to do whatever can be done to help those affected.

We chose to run towards the problem, establishing Covid Business Rescue Assistance (Cobra), a non-profit crisis management centre providing free services to help small businesses access co-ordinated support from banks, government and other stakeholders.

We all hoped the pandemic would be resolved within a year, but little did we know then how long lockdown would last. The failure rate of small and medium enterprises (SMEs) was extreme, with 600 going insolvent every month during the height of the pandemic. To make matters worse, in July 2021 the civil unrest in KwaZulu-Natal and Gauteng claimed many more businesses.

During this period I am pleased to say that Cobra made a real impact. We registered the non-profit on March 18 2020 and our website was operational on March 26, ready for the first day of lockdown. By May 1, when lockdown restrictions were lowered to level 4, we had been joined in the Cobra ecosystem by 90 partner organisations, including some of the largest in the world and some of the most influential locally, among them one of our top banks. We had one unifying objective — to safeguard livelihoods, support business and sustain the economy in the unfolding economic crisis.

Driven by our sense of purpose (and because there was now no turning back) we provided assistance to about 600 enterprises over the two-year period — 90 of these were pharmaceutical shops that were looted and destroyed in the July unrest.

My experiences as a business leader of both my for-profit and my non-profit have taught me a number of lessons. The one that sticks most prominently in my mind is something that my friend Bonang Mohale shared in his book, Lift as you Rise. There he reflects on the saying that “businesses cannot be islands of prosperity in an ocean of poverty”.

A second lesson is derived from this, and it is that the old saying by the late economist Milton Friedman — “the business of business, is business” — is exactly that: old and out of date. I believe business holds the key to tackling the issues and challenges we face in society today. 

The third confirms what we have learned from the founders of the B Corp movement: that “people want to work for, buy from, and invest in businesses they believe in.” And the fourth is that business must help build an inclusive and sustainable economy that works for everyone. It must evolve from focusing exclusively on shareholder value to focusing on shared value.

At each stage in the historical cycles of growth capitalism has reinvented itself, finding new business models, new solutions and new ways of creating value. One of the things I am seeing now is a recognition by business and society of the importance of shared value and the need to focus on inclusive growth. It in our own interests to do this. We are all part of the South African economy and if others thrive, so do we.

My journey both as a business leader and as the head of a NPO in the last few years has confirmed for me that, though essential, the profit motive in business is not enough.  Profit for a purpose is key. A business with purpose but without profit is admirable, but not sustainable.  A business with profit but without purpose is meaningless.

In today’s world the focus has to be on profit with a purpose, and the experience of my company shows that purpose does not have to come at the expense of profit. In fact, purpose enhances profit, because it makes your business distinct and believable, thus attracting top talent, customers and investors.

I have also come to realise that in South Africa and around the world the problems and challenges we face in society are far greater than any government or NGO can tackle.  What is needed is a social compact between business and government the likes of which we have never had before.

The sad truth is that we are operating in a system that is broken — too many people and SMEs are being left behind or are failing. And while I am pleased that Cobra served its purpose in providing support during the crises of 2020-2021, there will always be more to do. In a world blighted by climate change, and on a continent struggling with inequality and poverty, I believe there will be plenty more stories to come of purpose giving meaning to profit.

Let us not waste a good crisis. We have an opportunity to create a new chapter for growth in South Africa and its economy.

• Craker is CEO at IQbusiness, Cobra and SAtion. He is also a member of the MBA advisory committee at Wits Business School. This article is an adaptation of a speech he gave at Wits Business School’s “100 Minutes of Business Talk” in celebration of the university's centenary in September.