It is a paradox that the most profitable companies are the most profit-focussed. In 2016, Harvard Business Review (in partnership with EY Beacon Institute) published the results of a survey examining “The Business Case for Purpose.”
The survey defines purpose as “an inspirational reason for being which inspires and provides a call to action for an organisation and its partners and stakeholders and provides benefit to local and global society.” If that feels a bit tricky to get your head around, just focus on the why? Why did you get out of bed today, why are you going to that next meeting, why do you have to work late tonight, why does your company exist?
Usually a business exists to provide services or goods and meet the needs of the consumer. Almost all survey respondents understood that purpose could be a powerful level in business. We can clearly see that belief in purpose-led organisations is certainly there, but is it just theory and not actually put into practice? Only a minority said that their company currently runs in a purpose driven way. The majority of companies have yet to embed throughout their organisations a shared sense of purpose that would allow them to see these benefits. Respondents cited a number of barriers including short-term shareholder pressure, systems and infrastructure that are not aligned with long-term purpose, and the lack of performance targets and incentives aligned with purpose.
84% said businesses with shared purpose would be more successful in transformation efforts.Harvard Business Review & EY Beacon Institute
There are companies that do this and they do this well, but they’re a minority. It is not by accident that COINS Global has remained private for the last 30 years. The majority of shareholder-driven companies are driven by profit. That tends to be short-term profit and over time the data is there which shows that this does not drive a more productive and more purposeful company. Working in a purposeful environment will be the future for top-tier organisations.
89% said companies with a shared sense of purpose would have greater employee satisfaction.Harvard Business Review & EY Beacon Institute
In March 2017 the first-ever public ranking of corporate human rights performance launched, seeking to highlight the moral and commercial advantages for companies with a strong human rights record. Marks & Spencer, Rio Tinto, Nestle, Adidas and Unilever were identified as some of the top performers. These rankings were the result of a two-year consultation with over 400 companies and organisations, which in future will grow to include the world’s largest 500 listed companies.
Looking to the future we have lots of reasons to be positive. Namely the next generations… According to new research from Cone Communications, Millennials are universally more engaged in corporate social responsibility (CSR) efforts. This might be buying products associated with a cause or using their online social networks to spread social and environmental messages. The study reveals that more than 9 in 10 Millennials would switch brands to one associated with a cause.
Interestingly, Millennials are also prepared to make personal sacrifices to make an impact on issues they care about, the research says, whether that’s paying more for a product, sharing products rather than buying or taking a pay cut to work for a responsible company. Engaging Millennials in CSR efforts can trigger a positive advantage to company reputation and bottom-line. Purpose isn’t add-on to your business strategy, for Millennials in particular, purpose gives them an opportunity to be a part of something bigger than themselves. They’re looking for more businesses that drive change in the world.