It’s no surprise that business’s role as purpose-led actors in our global society is evolving in a positive way. I, at least, see the “force for good” language in pretty much every article I read. Yet as leadership qualities like empathy, mission, drive, and a priority around improving the planet become more coveted, companies are guided into a role that some weren’t ready for. The shift towards business as stewards for hope and change in an era bookended by the Boomers and Gen Z is still met with doubt despite the swift changes we are seeing in corporate purpose for positive impact. Even the most well-versed in issues of social impact or environmental sustainability wonder if business can save us. A business purpose aside from making money … is that a real thing?
Not only is it a real thing, it’s here to stay.
Combining purpose and profit is feasible and believable. Here’s why.
Myth #1:
Purpose is what you “stand for.”
Reality: Purpose resonates from within. Employees of purpose-led companies feel more strongly attached to their companies and their businesses’ future. Leadership is more defined by the current workforce as what companies are “standing up for” not just what they “stand for.” This is especially true as Millennials become the ones leading us into the next generation of what defines business success. The notion of purpose is evolving as new ways of doing business take into account the personal and professional impact of doing the right thing.
Myth #2:
Purpose equals philanthropy.
Reality: Purpose is way more than philanthropy. Being a social impact leader is so much more than just giving away money to good causes. If a company seeks to achieve even the smallest social, environmental or economic development goal, giving money to the problem won’t cut it. Businesses that have ingrained purpose and mission into their business operations are the ones that find more profitable returns. These investments yield new swaths of consumers, more efficiencies in supply chain processes and reduced costs over time. Purpose-directed investment can truly transform a standard definition of ROI.
Myth #3:
Purpose isn’t profitable.
Reality: Purpose amplifies profits. Companies answer to many constituents: employees, customers, partners, shareholders, boards, etc. This means companies must satisfy a variety of requests, interests, needs and requirements. They must produce high quality goods, provide top notch service, invest in customer engagement and employee satisfaction programs. On top of these responsibilities, it seems near impossible to put time and resources into programs that are centered around the ethereal notion of “purpose.” What leading purpose-oriented companies have seen, however, is that standing up for purpose or mission has made profit potential, loyalty among consumers, employees, and these other stakeholders much more ingrained. According to a Forbes analysis on Cone Communications’ 2017 CSR Study, buying behavior takes into account purpose more than almost anything else these days.
Myth #4:
Purpose is for small enterprises.
Reality: Big companies are just as fixated on purpose as the smaller ones. I can name at least six conglomerates prioritizing socially-responsible, purpose-oriented investments, not just because it’s the right thing to do, but because there is profit potential in doing so. If you think smaller brands are leading the charge, they are. Bigger brands are taking notice, though. How about General Mills, which has invested in Annies, Epic Meats, and Lara Bar? Or Clorox, most known for bleach, which owns Burts Bees, one of the biggest purpose brands in drug stores? Companies recognize that to make an impact in a long-term, sustainable way, they must consider new models, and learn from smaller more nimble brands, or engage in communities like B Corps.
Myth #5:
Purpose means sacrificing profit.
Reality: Businesses see purpose and profit as mutually exclusive.
I facilitated a meeting of companies as part of a discussion about partnership with social enterprises. As I sometimes do in these scenarios, I led the 50 attendees in a “four corners” exercise, where participants self select which corner of the room to stand in based on their response to a question.
The question was: “What is the main role should business play in society?”
The answers were: (1) produce goods for consumption; (2) advocate for pro-business government policies; (3) inspire change in local communities; (4) invest in innovation.
Which answer do you think everyone picked? 49 of the 50 picked “produce goods for consumption.”
A few adjusted their answers after we discussed what a business role in society looks like. That’s because while businesses exist to produce goods for consumption, they also exist for all of the other reasons we gave in our exercise. This may seem lofty, but it’s happening. As one participant shared after the exercise had ended: making money and “doing good” are not mutually exclusive. This is the new normal.
