Updated: Jul 13
Without profit there can be no purpose. Without purpose there will be no profit.
Businesses live and die by their reputation. It’s that simple.
If your stakeholders love you, you do well. If your stakeholders hate you (or worse yet, ignore you) – you die.
Whether you’re a start up or a global multinational, the same rules apply. And it is no surprise that the companies that succeed are the ones that acknowledge this and proactively manage their reputation.
As this year of chaos has taught us, reputation is not static because our world is constantly changing. What it takes to be relevant, resonate and reputable is constantly evolving. But the good news is that there is one underlying trend that is easy to spot and easy to master, if you’re brave enough – and that is purpose.
Today, purpose drives reputation more than ever. Given that reputation drives performance, business success now depends on purpose done properly.
So, what does it look like when it’s done right?
It’s strong, inspirational and visible leadership. It’s business as a force for good. It’s unquestionable ethics and strong governance. And it’s being a company that employees want to work for.
Call me naïve but I believe that most business leaders are inherently good and want their companies to make a positive contribution, rather than be part of the problem. However, they were never trained on how to build a truly purposeful business.
It is only in very recent times that business courses have included modules on sustainability and even then, the focus is more on measuring, cost efficiencies and reporting than building purpose into the core of the business strategy.
Perhaps it’s also because the word ‘purpose’ is so fluffy. And because it has been so abused with so much green-washing, woke-washing and purpose-washing.
All of the above is true. I think we’ve ended up where we are because CEO’s have been uneducated on purpose, avoided it as something non-core and therefore handed it to marketing, who have done what they do best – create short term campaigns to generate sales. Because it wasn’t a business decision, it could only ever be a marketing tactic.
Purpose and Profit – A Love Story
It’s time to make purpose something that is embraced by accountants, engineers, scientists, lawyers, bankers, bakers and candlestick makers in the same way that everyone loves profit. The reality is that profit and purpose are bound together in an endless dance. Like lovers giving their lives to each other. In our new world the one can not exist without the other.
Without profit there can be no purpose. Without purpose there will be no profit. If a business isn’t financially sustainable, it can’t create value for its stakeholders. If it makes money for investors only without creating value for other stakeholders, it will lose support and then won’t be able to deliver returns.
The business of business is to create and maintain a sustainable process that turns inputs into outputs that have value for all of its stakeholders. Investors want to keep on getting good returns. Employees want to keep on being employed in meaningful jobs with fair remuneration. Customers want to keep on getting fairly priced, quality products or services. Governments want to keep on getting tax revenues. Communities want to keep on having a clean and healthy environment.
If only one of those stakeholders is getting what they want, then the dissatisfaction of the other stakeholders will force a change. The system has to be in balance for it to function. The lovers have to be allowed to dance. Profit has to embrace purpose.
What Is Purpose?
Putting purpose at the core of your business requires an understanding of what purpose is and what it’s not. Far too many well intentioned efforts fail because of people chasing fashionable words without the required insights.
Purpose is not your mission statement or vision. Purpose is your reason for being and that goes beyond just the ‘why’ that Simon Sinek so famously discusses. He describes Apple’s why as being to create beautiful products. They’ve done very well at it, but it’s not their purpose. In fact, I can’t find their purpose anywhere online. Unilever on the other hand make their purpose perfectly clear – to make sustainable living common place.
Most people battle to define their personal purpose, never mind their business’s purpose. Providing for your family is not purpose. If you chose to have children, then providing for them is your job. Hopefully you find it rewarding and hopefully it gives your life some meaning, but it shouldn’t be the only meaning.
So, what is purpose?
Firstly, purpose without impact is meaningless. This is where I believe most companies miss the mark. It’s not that you have to transform into a charity or social enterprise, but you do have to make a positive impact on the world – either socially, environmentally or both. This goes beyond recycling the office paper, switching off the lights and running employee volunteer days with a local charity. Purpose is not something you bolt onto the side of your business. It is foundational and it is impactful. Proper purpose well executed will be part of your business strategy, central to your positioning and have a measurable impact target, deadline, project plan and champion.
Secondly, it has to be material. Your purpose must use the scale and/or skill of your business to make a difference in a way that is relevant to your value chain and your stakeholders. Look at what you do – or could do – that delivers against the SDGs and find your purpose there.
And lastly, it has to be authentic. Not only do you actually have to deliver the impact, but purpose has to be part of the culture and DNA of your business. Purpose is something that flows from the top down – the CEO and leadership team have to fully buy into the concept and be seen to be making business decisions in accordance with purpose. It also has to flow within the business and become part of your ways of working. Long before you start running external campaigns about how wonderful and purposeful you are, you need to bake purpose into your employee engagement, performance management and cultural practices.
What It’s Not
My all time favourite example of what’s not purpose is Accenture’s paper on Retail with Purpose. It floors me that a company with so many big brains could publish such drivel… read if for yourself and weep:
“Retailers with purpose can become the trusted partner to deliver what a customer wants. But what do they want? A woman is not just looking to buy a dress—she wants to look beautiful. A trusted retailer can offer products, and also styling services, to help her look her best.”
Offering styling services to sell more dresses is not purpose. Finding your organisational purpose is a strategic exercise that requires some work. But it has great rewards so it’s worth it.
Purpose vs Sustainability
The last point I’d like to cover are the differences and similarities between purpose and sustainability. Language is fluid and as the two concepts are aligned they are often used interchangeably, but I think it’s important to make the distinction clear.
To me sustainability is the big picture. It’s the SDGs and the Global Compact. It’s everything our world needs to fix to ensure humanity’s survival and thrival (a word I have just coined that you are welcome to use – our ability to thrive).
Doing a sustainability report and measuring every last thing you do or don’t do to meet the Goals is good, but it’s not purpose. Getting a B Corp badge is good and if you went to all that effort and got through, odds are you’re a great company, but it doesn’t in and of itself make you a purposeful business.
Purpose is the one thing you focus on to make a significant, positive societal and / or environmental impact within the big picture.
It’s Never Too Late (Or Too Early)
As they say in the classics, there’s no time like the present. If you want your business to thrive you have to build your strategy around purpose and to do that you need to find your reason for being.
If you’re ready to commit to the process our outcome-focused purpose workshops will help you with the thinking you need to do to find your purpose.