Tuesday, November 27, 2018

How To Make The Business Case For Purpose (And Why) - Forbes

Purpose is increasingly commonplace when it comes to business vernacular, it seems. From questioning our personal motivations and what drives us in our careers through to an organization’s mission and the need to collectively work around some greater reason for being, the idea is also asking questions as much of the “what” and “how” we do business, above and beyond the initial why.

Business ChoicesPhoto by Yuxiang Zhang on Unsplash

As a concept, it can be quite discomforting. Aside from purpose being seen as the latest in a long line of flash-in-the-pan business trends, historically speaking, the purpose of business has been seen to lay solely in generating profit. As a result, our current crop of business leaders has been born-and-bred with a market first mindset. Culturally speaking, capital is all.

As the discussion around business impact intensifies – fuelled by astronomical tech growth and the power global organizations like Facebook now wield – the idea that businesses have a legal requirement to maximize shareholder value deserves examining. As much as corporate giants might like to be bound to creating wealth, there’s no such legal requirement in either the U.K. or the U.S.A.

Instead, it’s the choices of shareholders and company directors that determine what success looks like for a business, and as long as those individuals in positions of power personally value money above all else, the idea that businesses exist for one purpose only will remain true.

Except, societally speaking, what we value is changing. You can see it how noise is being made about the tax companies don’t pay, and the movements quickly gaining ground on social media to challenge business which behaves unethically.

Those organizations which exist only for the bottom line are being challenges, and those which think of the bigger picture are benefitting. Nike and its boosted share price since the Colin Kaepernick and #blacklivesmatter aligned campaign is case in point.

Why? Young people, of course. From the 1920s onwards, young people have repeatedly pushed against the raison d'ĂȘtre of their day.

New generations, who are paying above the odds for education and housing, being squeezed when it comes to employment and accessible healthcare and judged for everything from enjoying experiences to expressing emotions, they see through the capital promise their parents came to expect as standard. As a result, they’re looking beyond it to the bigger picture.

The bigger picture of mass inequality, from rampant homelessness across the western world, rising populism - fuelled by a polarising and now technologically savvy media - not to mention the ticking clock that is climate change. The urgent combination of the personal with the major systemic challenges we’re collectively facing is giving rise to a culture of ethics first.

That, and fundamentally shifting our sense of what value truly is.

Value that goes beyond profit. Aside from making abundantly clear that profit for profit’s sake is at best unsustainable, and at its worst, unethical, the millennials who are coming into positions of power - as employees and consumers - are shaking things up. A million shaming articles about the snowflake generation and their ruin of industries from cereal to diamonds won’t change a thing.

The individualistic mentality of older generations, with a primary focus on material gain, position and prestige are fast becoming a thing of the past. With Gen Z bringing up the rear, business culture is shifting. Open and collaborative leadership styles, a crowdsourced mentality when it comes to buying and the desire to work for conscientious businesses is increasingly the norm.

Consumers are increasingly leaning towards brands that take a solid stance on society and politics too, with a recent piece of research from Toluna and Unmetric showing 33% of people would actively buy more goods or services from a brand they already purchase from, if that brand took a stance on a controversial issue that aligned with their beliefs.

It's why transparent businesses like Innocent became so successful, community-led models like GiffGaff scale so quickly, and brands like Lush are bucking the high-street trend in spite of their strong and often controversial ethical stances. It also why Pepsi solving movements with a can of the cold stuff, and Amazon’s £2 billion sticking plaster to solve homelessness it helps create won’t wash.

When it comes to purpose, its those businesses looking beyond profit to how they impact people through their products and services that are winning out, and conversely, benefitting their brands and the bottom line in the process. Its time to change our understanding of value, don’t you think?



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