Doing Good and Doing Well: Mantra of Aditya Ghosh Businesses must align purpose and profits for a sustainable economy

For businesses at this juncture, adopting the new normal to connect with each other, and addressing humanitarian and environmental crisis are the prime requisites.

According to Aditya Ghosh, member of board of directors at Fabindia and founder, Home Ventures & Foundation, nearly 3,000 large corporations across the world are causing environmental damage worth $2.2 trillion every year, according to a UN report. Inequality in the Indian and US markets has increased as compared to what it was 100 years ago. Consequently, civil unrest has doubled leading to depression becoming the second-most prevalent illness in the world.

Ghosh, who was speaking at a webinar organized by Entrepreneur India, asserted that considering this environment, entrepreneurs can't rely on hope as the plan to address issues. Planetary and environmental needs should be focused on to deal with the crisis.

Today, many companies are preparing themselves to make a difference with their varied initiatives. At the same time, this seems to be an inadequate response on evaluation. However, the ruling out of Sustainable Development Goals (SDGs) by the United Nations came as a positive action. Ghosh elaborated that despite being a resourceful action, it will take up to $3.5 trillion a year to attain these SDGs. The two per cent conundrum is another concept, wherein two per cent of profits are dedicated towards CSR schemes by most of the organizations. But, the problem is just money being spent and lesser time spent by the management.

The fraction of the leadership time spent in acknowledgement of issues and finding solutions for them is worth noticing. These actions are aimed at creation of the world which is dramatically different from the ongoing things.

Alignment of purpose and profits in future

Improving business performance to attain profitability and actions intended at making deep social impact must be aligned. Ghosh points the process cannot be unidirectional for attracting profits. In fact, by sparing two per cent of time for identifying the purpose or objective of business will be ideal methodology. Talking about IndiGo airline where he worked earlier, in terms of objective Ghosh highlighted, "Our prime objective was to prove low cost has nothing to do with the low quality." He further added that ability to work in a purpose driven way is secret behind success witnessed by him.

Evaluation of roles of shareholder & stakeholder

In the entrepreneurial journey, it's a tough decision to evaluate whether to retain shareholder or to focus on stakeholder as well. Ghosh opines that there are several factors which influence this decision as the likelihood of things being worsened is high. The dire need of the hour is to realize the market scenario as changes in the world and on the planet are rapidly taking place. Ghosh mentioned that if changes are overlooked the emergence of new business model will prove to useless. He assured, "Dramatically changing the approach towards business is the realistic thing for entrepreneurs."

Future of entrepreneurs and sustainability scope

The giant companies have made a difference whether it's Lipton, Persil or Patagonia. These organizations worked on the goal-attainment plan innovatively. In the case of Patagonia, true cost of accounting by looking at externalized cost perspective. This step will not only help entrepreneurs in attaining sustainability, but also, ensure the longevity of business. Ghosh talked about values to align with and the work mechanism being clubbed together to create business for a deep social impact.

Indicating the work culture of Fabindia, Organic India and Fabcafé, Aditya said, "Fabindia has created one of the profitable, largest and most loved retail brands in a purpose-driven way committed to serve partners, associates, partners and producers of goods." Furthermore, he discussed "Wheels Of Change' ideated by Rebecca Henderson, Harvard professor who teaches sustainable businesses course. As a part of this ideology, shared values, industry cooperation, changing consumer behaviours and changing regulations will together form a wheel of change as well as totally different economy.