Must a business be profit driven?

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Before 1Malaysia, there was already OneHeart, the story of a multi-ethnic group of young Malaysians who wanted to run a business – without being driven by profits.

Today, blog reader Mist commenting on my “Two Million Ringgit Man” posting observed:

I had spent a large part of my life in academia and I was blissfully oblivious of much of what went on in society, mostly in the corporate world. Recently I got involved in the real estate business and got to meet quite a few people in the corporate world and those who have close association with what went on in the business world. It would seemed that kickbacks are quite common. Proxies are often used to facilitate the process.

And then of course there were other rather unethical practices and I had been given the advice so often that we won’t be able to make a living if we were honest. This advice came about after a bit more than five months of relentless effort and without anything to show for it; being played out by sellers and buyers on more than one occasion.

My point is this: much of society is dishonest and everyone seemed to be out to get an advantage – honest or dishonest – to move forward. We cry foul over governmental corruption and yet it is merely a reflection of what is going on in the wider community.

How depressing! Yes, corruption and unethical practices seem widespread and entrenched in the system, not just in the public sector but also in the private sector.

Is there really no alternative way of doing business? Kelly Law, CEO of OneHeart, and husband Jeffrey, whom I met over a cup of coffee this afternoon, along with their friend and godpa Vincent, think there is.

The couple are involved in a unique enterprise, OneHeart, a “just haven” that deals in used books in Plaza Mont Kiara in Kuala Lumpur.

More than their passion for used books, it is their business philosophy or model that catches the eye. Unlike other businesses, believe it or not, they are not profit driven. While recognising the need to make some profit to sustain their enterprise, it is not the be all and end all. Far more important are the ethical and green core of their philosophy and the desire to contribute to the community – which other enterprises would do well to emulate.

So at odds with conventional economic theory that believes shareholders are motivated by profit maximisation.

Check out their alternative business philosophy:

Our Vision
“It determines us”

We dream of building a community of love, care and trust that will touch your lives.  The community will be like the one our parents, our grandparents and even our great grandparents had lived before us. In fact, it should be better.  This dream has now become our vision.

We believe in our vision and will strive to achieve it.  However, we acknowledge the challenges that lie ahead of us and yet we trust we can achieve it because we have the heart to do it.

Building the community is like sowing the first good seed.  As we nurture the seed with love and care, it will grow into a big, strong and healthy tree so that one day, the tree will bear the sweetest fruits not only for our enjoyment but also for our children, our grandchildren and great grandchildren.

We are not a charitable or non-profit organisation.  We do not seek donations.  We operate for profit just like any other business in order to be sustainable in the long-term.  But unlike most businesses, our drive to succeed is not profit-driven. Instead it is vision-driven.

Our promise to you is to operate our business with honesty, transparency and integrity.  In return, we want you to place your faith in us, to help and support us.  Together, we can turn our society and the world a better place to live in.

A green business model that is not profit-driven and instead focuses on how it can contribute to the community and protect the environment. A business that gives more than it receives. Paradox? Idealism? Or plain naiveity? Can it work? Jeffrey and Kelly believe it is possible and, together with their team members, they are determined to make their actions speak louder than words.

Listen to ‘team member’ Ooi Keong:

Back in 2001 when I first started my career as an engineer in a multinational company, I constantly asked myself ‘What is the purpose of my life?’

I thought life was about achieving my ambition. My ambition was to work hard, earn more money to sustain the lifestyle I want. As time went by, I met new friends and people from all walks of life. I realised there are more important things to life such as family ties and lasting friendships. It is not about me. It is about us. It is about living in a loving, caring and trusting community.

Only through cultivating meaningful relationships with people, I learned about the gifts of giving and sharing. I wish I can spread this gift to more people but I did not know how until Kelly approached me with an idea to build a community filled with love, care and trust. The idea quickly becomes something meaningful. I hope through OneHeart, I will live a life filled with a meaningful purpose which is to encourage and convince others to lead a purposeful life.

At the heart of their enterprise is their green pledge which begins with a saying from the native Americans:

You must teach your children that the ground beneath their feet is the ashes of your grandfathers. So that they will respect the land, tell your children that the earth is rich with the lives of our kin.

Teach your children what we have taught our children that the earth is our Mother. Whatever befalls the earth befalls the sons of the earth. If men spit upon the ground, they spit upon themselves.

The community is a central part of their philosophy. A conventional business usually measures its success based on its financial performance: the higher the sales, market share and profits, the better. In contrast, OneHeart measures its success based on “the support we receive from our family members, friends and the community at large and how many lives we can touch from the very beginning and right to the end”.

Of course, used books (We prefer calling them ‘used books’ rather than ‘second-hand books’, says Jeffrey), lots of them, are the focus of their enterprise. From books comes knowledge.

Kelly feels we should change our mindset from “if it does not happen to us, it is not our problem” to “how can we help others and ourselves to deal with any situation in life?”

“The knowledge we have acquired (from books) will help us make better choices and even save a life.”

She is certain that when we have a community that believes in working for the common good, society can be transformed into a harmonious and peaceful place to live in. “However, believing is not enough. If we take action and do good, then we can be assured that our children, our grandchildren and their children will continue to live in a peaceful place.”

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kahseng

Mist’s comment also highlights the normally invisible sad story of the honest entrepreneurs. Here is an honest academic, looking to do business. Till the end he doesn’t realize that it is precisely because the government is too powerful, that he can only compete to be less scrupulous than the competitors to gain favor, or become destroyed. The hidden fact is many honest businessmen have been destroyed by government-sponsored but less-competent cronies, through not just NEP but any sort of government control. The more we support government ownership/rescue/ subsidies/financing/control of banks, toll roads, telecom, retailers, industries, even sponsored help for small… Read more »

kahseng

Corruption in business stems from corruption in government. If we have only a minimal government that only serves to prohibit extortion and robbery, then business would have to compete against each other to please the CONSUMERS for any profit. But with a powerful government which can set excessive rules, regulations, approval process, restriction, etc, then each businessman will compete against each other to please the GOVERNMENT bureaucrat first. How? By bribery, of course. For what? For monopolistic rights to import certain products, build on certain piece of land, run certain taxi/lorry routes, build certain roads. Those who win will charge… Read more »

tunglang

Most entrepreneurs start with a dream. From a dream, he creates a vision. What kind of a vision depends on the entrepreneur. Next he plans his mission. This is where the differences are. Some want to do it honestly. Some think it’s alright to cheat, bribe, kill, or sabotage. Some only believe in profit, not losses (the Kia Su type). Some start honestly and later become disillusioned. Most if I’m not wrong, think business is only to make more money and nothing else. Well, it is good while the going is good. B’cos money makes friendship, power, status and influence.… Read more »

ghkok

Hi Anil, I think you are mixing up too many things – corruption/ethics, profit/non-profit, green/polluting, caring/cold, etc. etc. These are all separate issues. Yes, corruption is a big issue. Yes, it’s as bad in everyday life as it is in govt life. Yes, Msian society is downright greedy and extremely corrupt. Yes, many people boast about how they “pay” to get contracts, or what gifts they are receiving from suppliers … yes, this is bad, it is disgusting, we need to do something about it. On my part, i lead an honest life and tell my kids that’s the way… Read more »

Iron

There are two types of people in this world.

One type lives in the real world, and another type lives in the dream world.

You want to keep on dreaming, please be my guest.

Go on dreaming you can run a business without profit.

And oh, btw, socialism has failed, just in case the dreamers don’t know that yet.

Bigjoe

The short answer to your question is YES. But just because a business is driven by profit, does not mean its allowed to break rules, do evil or harm or unethical. Business that break rules, unethical and cause harm are just bad business just as there are bad people and good people doing bad things. While its true that a company that is overly profit driven causes harm, the main key word is ‘overly’ or excessively. In life and nature, anything in excess generally have bad effects. Too much altruism is devastating – look at communism and every socialist experiment… Read more »

Mist

A community based business had been around for many years. These are usually called cooperatives. In the early years of cooperatives the members tended to benefit from such arrangement. As time went and such organisations started to exert an influence and become rich with assets and cash, it will invariably rear its ugly head of greed and profit maximisation. Society is what it is because of the people in it. We must first begin with ourselves and with our children. A study some years back by NCC of UK on how honest people are found that 90% of them would… Read more »

Mist

If what we see and know reflect accurately reality we have to ask ourselves how we should respond to such an environment. If we could accept such reality then depression would not be our response. Accepting reality doesn’t mean we accept what is going on but rather we are not denying what is really happening. Recently someone tried to malign someone I was working with. His advice was well-intentioned and I appreciated his concern. He was genuinely concern. I told him that there are always some good in the worst of us and even in the best of us there… Read more »

Diong Chae Lian

Isn’t a business legally obligated to make a profit? If an entity is not driven by profit, then it should register as a non-profit, i.e. society, trade association, charity, foundation. I think that for a private business to “disguise” itself as a non-profit is somewhat deceptive and brings to question why the founders refuse to legally register as a non-profit. There are many businesses which pledge to go green, give back to the community, have a more diverse work force, etc. but at the end of the day, all of it is just rhetoric as they are still obligated to… Read more »

Diong Chae Lian

But even a non-profit looks to increasing revenue in order to continue or expand its work. Based on your explanation of what OneHeart does, it would seem that they’re already operating as a non-profit. So the question remains, why do they refuse to be set up that way?

After all, there are many NGOs out there which have made the effort to establish their legal framework properly so it puzzles me why some folks take the “easy” route of setting up a business entity instead.

Gerakan K

Hello blog owner,

I enjoyed this article like a joke. Very funny. But the young ones please have a good laugh only and not follow his non profit nonsense. Profitable businesses generate job opportunities and thus eradicating poverty….

tunglang

One question: How profitable is really profitable to you?
It is never enough to work on profitability, which more often than not leads to wanting more than is enough to realise one’s business objectives.
You may say it creates more jobs, but when the going gets tough, profitability tends to rear its ugly sides of business practice.
One has to be more holistic in thinking which can determine a better approach to business, not just to making money as the sole means to an end.

Yen

Me too start working on the similar efforts, knowing my neighbours, changing gifts during festival seasons and taking parts in community activities. Once my power plant project works, I would afford to buy a big house and turn it into comunity library. Although father lamented I am a sheer dreamer.

shy

I decided relatively early on to dedicate my life to learning, and have been open to all close to me that monetary wealth will never be a priority in my life. I continue to live minimally, but I cannot deny that there are exceptions that I occasionally allow myself to indulge in… eg. theatre, music festivals, travel, culinary experiences. Everyone of all income bracket has some things that they would like/prefer to have (eg. better car, house, shoes, iphone, more meat on the table, take their children to the cinema, new school uniforms, etc). More essentially, people who live in… Read more »

Collin

I AM IMPRESSED WITH THE VISION OF “ONE HEART”.

AS A RETIRED AND SOMEWHAT HOUSE-BOUND SENIOR SINGLE PERSON I AM WONDERING IF THERE IS ANY POSSIBILITY OF DOING SOME WRITING FOR MR LAW.

PERHAPS IF I COULD SEND YOU MY CV WE COULD TAKE IT FROM THERE?

THANK YOU

COLLIN ABRAHAM
(H/P 017 8789885)

Irene

I am interested in your philosophy and wonder how I as a Malaysian can contribute to your cause and in what way can I support?

Rgds