How Can We Balance Idealism and Pragmatism?

This week I went to a City Year Award Dinner honoring Richard Stengel, the managing editor of TIME, who helped to put service on the map by writing a TIME cover story in 2007 called "The Case for National Service." Although he received the Lifetime of Idealism award, he suggested that idealism alone will not change the world. He insisted that idealism should be paired with pragmatism.

In the case of TIME, this pairing is demonstrated in their now annual issue that focuses on volunteerism, philanthropy and service. It's a popular issue for consumers and advertisers, so while it's a "good" thing to do, it's also a prudent business decision for the magazine. TIME isn't exactly a social enterprise, but this is a good example of how traditional businesses can make decisions that are motivated by both purpose and profit, and how those decisions can benefit everyone. When organizations are both idealistic and pragmatic, businesses, consumers and society at large can all win.

Also this week, I came across a great blog post by Colleen Dilenschneider that features a talk by Dan Pink on motivation. Dan found that, contrary to popular belief, piles of money don't actually drive people to perform better. Once people are paid enough that they don't need to worry about the money, the three most important factors which motivate people to produce creative, quality work are autonomy, mastery and the opportunity to make a contribution. In fact, this study found that when people are offered the highest reward (like a bonus of two-months salary), they performed the worst. It makes sense that people want independence and to rise to the challenge of being really, really good at something, but I'd like to focus on the third factor - making a contribution - because it reminded me of Richard Stengel's remarks.

Research shows that people care about the impact they are having on the world, but people also want to make a living. Dan says that when the profit motive becomes detached from the purpose motive, bad things happen - if not ethically, the quality of products and services suffer. When companies function with purpose, they attract better employees, who are excited to come to work. As Millennial social citizens continue to flood the job market, they are looking for this combination of idealism and pragmatism, and they will be looking for it in a way that engages them regularly in a meaningful way - not just as an annual day of service.

The culture of really successful organizations, both for-profit and nonprofit, seem to have successfully combined a sense of pragmatism and idealism. Great business leaders don't rally their teams around the idea of making as much money as possible; they talk about a higher calling that will change the world in some way. And, in turn, great nonprofits are using revenue-generating models that lend greater independence and sustainability. In both sectors, the organizations that are having significant impact, and that have employees and constituents that are thrilled to be a part of what they're doing, are the ones that maintain a balance between pragmatism and idealism.

Not all ventures can be nonprofits, or even true social ventures, but I think a lot of companies can make more strategic decisions about how they will interweave profit motives and purpose motives - the way TIME, AOL, Apple, Zappos and a growing list of organizations have. How can more organizations hitch their profit and purpose motives and balance idealism and pragmatism in a way that benefits all?