The coronavirus pandemic is a sharp reminder that healthy company profits are a byproduct of a healthy society, and vice versa, highlighting that corporations must have a clear and meaningful purpose if they are to survive and thrive.
Not so long ago, providing logistics and aid in responding to Hurricane Katrina was the catalyst for Walmart CEO, Lee Scott, to start transforming the way the company helps workers, engages with suppliers and sources its energy. A profit-only approach leads to a dead end - purpose helps in achieving sustained profits.
Given the current global situation, now is the perfect time to re-think the role of purpose and there are three (3) levels to this conversation.
1. Profit Growth
Business gets a bad wrap. It is usually is well deserved. However we do tend to overlook the positives and the massive potential for business to do good.
I’m not talking about donations to charities, volunteers packing boxes, responsible sourcing certifications or cause-related marketing, I’m talking about contributing to positive societal outcomes through core and profitable business.
The chocolate barons knew a thing or two about this. As far back as George Cadbury (UK) in the late 1800s, we’ve seen leading companies putting these principles in action. George bought land surrounding his factory and built affordable accommodation for workers on the premise that a happy and healthy workforce would be more innovative and productive for his business. He connected profit with purpose.
Milton Hershey was so impressed with the Cadbury estate that he built a village on a grander scale, more akin to a theme park, in Pennsylvania. He didn’t need to spend money on advertising for 60 years because of his word-of-mouth reputation for treating employees well.
The power of core business in effecting change is underestimated. At this very moment in Australia we see supermarket, postal and logistics providers teaming up to deliver basic food boxes ($80) to elderly people who are isolated at home. This is not corporate foundation work, it comes from the heart of the business, leveraging their systems, relationships and expertise to have far greater impact.
Linking profit with purpose requires the right mindset, because it doesn’t work without a very clear North Star or reason for existence. Companies that continue to define themselves by activities or shareholder return targets are losing their way; on current trends, they will not endure.
2. Professional Development
After completing university I worked in the insurance and investment industries for 19 years. I was concerned about climate change and the impact it would have on our lives as well as our investment portfolios. However the need for life-change and desire to make a difference saw me exit my job to join the gig economy to assist businesses, community organisations and government departments with collaborative challenges.
While I wouldn’t change a thing, soon into this new journey it dawned on me that most of us can make a far greater impact through our day job than we can outside of it. We may volunteer or help with fundraising in our spare time, however not many of us have enough spare time.
If you work for a company or organisation, what if delivering on a social purpose was integrated into everything you do?
The secret to achieving it revolves around linking profit with purpose. It requires new skills, including the application of shared value principles, and the how-to needed to make it work. I find it frustrating to hear people say “business must do good” when they don’t offer up any workable alternative solution, one that is congruent with the profit motive.
If you’re equipped with the right mindset and skills, what else is important?
3. Personal Wellbeing
What do you care about?
High profile companies are, quite rightly, obsessed with helping their leaders and executives achieve work-life balance, personal wellbeing and gaining job satisfaction. And that’s all fine … unless it means leaving your personal values at the door every day because the relentless pursuit of financial goals means you’re doing harm to someone, somewhere; your firm may have questionable marketing and sales practices, flaunt rules and regulations, use creative accounting, misreport facts, exploit human or natural resources, put undue pressure on suppliers, witness bullying and harassment, have exceedingly poor governance and so on.
Having a clear and meaningful purpose — one that’s pushed from the top down and built into KPIs from the bottom up — is a powerful way to focus resources and efforts. I’m not saying it’s easy, as the Chair of Australian-based insurance multinational, IAG, Elizabeth Bryan notes:
If you’re confused about your purpose it’s hard to do anything.
Her company defines its purpose as “making your world a safer place”. She went on to say it requires authenticity, passion and commitment to instil a renewed purpose across an organisation, and don’t bother trying if you’re not prepared to give it 100 per cent.
Talk About Purpose
Right now, we’re in unchartered waters. Most organisations are focusing on day to day survival. I get that. However, it’s also the perfect time to be gathering insights, reflecting and reviewing about where to from here?
Some say that connecting profit with purpose is impossible; that they are two opposing forces. I disagree. They reinforce each other when done well. Putting purpose front and centre pays off in terms of personal wellbeing, professional growth and business profitability.
Our real challenge is translating talk into action.
Phil Preston is a collaboration expert, online presenter and strategist. He is the author of Connecting Profit With Purpose: How to Create a World-Changing Business and can be contacted via email@example.com or +61 408 259 633.