Welcome to the world of the purpose economy, where employees and consumers alike search for relationships that are meaningful beyond a paycheck or a purchase.
In today’s world, companies of all sizes are being asked to proactively “do good.” They aren’t being forced to this end by the government or lawyers. No, companies are being pushed to create public benefit by consumers and employees, two powerful audiences that are exerting newfound control over businesses large and small. Perhaps as telling, investors are adding a new lens of social responsibility in their funding criteria.
What Does This Mean for Your Business?
As a leader, you have an opportunity to inject your business with a sense of meaning that resonates with your audiences and extends beyond product, paycheck, and profit. It will help you attract, retain, and motivate employees, position and differentiate your company in the minds of your customers, and open doors to new relationships with other businesses.
If your heart’s not in it, this will be a tough transformation to make. Even if your heart is in it, it won’t be easy—you will still have to be sharp, perhaps even sharper, in the way you run your business.
Moving Forward By Embracing Change
There are some fundamental leadership changes you’ll need to make to the company and its culture.
You’ll need to move from the world of a corporate mission to that of organizational purpose. In place of mission (about “me” and inwardly focused on the company), you’ll shift to purpose (about “we” and the broader community).
You’ll craft and live by a credo of values, bringing them to life through intentional actions rather than hanging them on the walls in faux-inspirational posters.
You’ll reconsider existing governance and implement new rules and policies. This includes exploring re-structuring as a public benefit corporation with higher standards of purpose, accountability, and transparency, and also certifying your performance through an independent third-party such as B Corporation.
The Business Case of Purpose
I’d like to interrupt this feel-good message with a reality check I hope will dissuade you from thinking this is purely a Kumbaya-singing, Birkenstock-wearing, tie-dyed movement.
Social enterprise is all about the business—and there are cold, hard, pragmatic benefits to this approach. I’ll share a just a few of them with you here.
Companies With Shared Values Are Magnetic
We’ve talked about how purpose can provide new opportunities with a new and growing class of consumers looking to align their purchasing with businesses who share their values. This results in a more-efficient customer acquisition and retention strategy.
What’s often overlooked, however, is the same attraction occurring in the business-to-business (B2B) market. Businesses looking to maximize their social impact are intentionally trading with other businesses that share the same goal.
Boosting Environmental Savings
A key area for savings involves your business’ environmental impact. Among others, you’ll measure inputs (such as energy and raw materials) and outputs (think waste), and you’ll analyze your practices surrounding the use of resources.
You’ll also shape environmental policies, such as minimizing business travel to reduce fuel consumption. You’d be surprised how quickly thousands of dollars in savings can add up when you aren’t spending them on airfare, hotels, rental cars, and restaurants. Plus, you create a significant environmental benefit.
Enhancing Your Recruitment and Retention Efforts
I have, on average, about one person a day approach me, usually via email, about working at Oliver Russell. It usually goes something like this: “I’m inspired by the company you’re building and want to work there.” It’s never a garden-variety inquiry about an available position, but rather they express that Oliver Russell is the type of company they want to work for (and, by the way, when a job opens up, I’d love to be considered). Instead of searching for talent, it finds us. The same compelling benefit of purpose is a powerful tool for retention in your workplace.
Ignore This Trend at Your Own Risk
Social enterprise isn’t a fad—it’s a trend, and a powerful one at that. This philosophy, put into practice, flows into profit, which really is an amalgam of the way you run your business: creating intentional public benefit for your stakeholders, which delivers financial profit for you and your shareholders.
Truth be told, I think this for-profit, purpose-driven orientation is more challenging than others. But I also believe the rigor and discipline it requires makes you a better businessperson and creates a company that outcompetes today and outperforms in the long run.
You just have to be up for the challenge, willing to evolve, and embrace a different definition of profit.