Purpose-driven business is so hot right now.
Let me explain. Up until now, purpose has been subconsciously influencing business. There have always been different kinds of workplaces – the kind that get name-dropped as a dream employer, and the kind that’s considered just a stepping-stone on the way. There have always been brands that sell the dream and those who sell the product. And there have always been companies driven by profit and those driven by purpose.
But these days, it’s not subconscious. Purpose is a buzzword that many businesses love to use. And like any major trend, its definition has become a little fuzzy amongst the talk.
So when BWD offered to send me to Purpose 2016 – a conference all about the subject – I was excited to get immersed in the community, gain some inspiration and get some clarity on what purpose is all about.
The two-days buzzed with the hopeful spirit of a brighter future. There were sessions where young entrepreneurs told enviable success stories of how their business ideas were changing the world. There were talks that drew on indigenous sustainability practices and applied them to modern business. Everywhere you went, you met friendly people who were ready to dive into an existential conversation about the meaning of life and business.
The speakers and attendees at Purpose 2016 came from a wide range of backgrounds and formed a strange conglomerate of passions, projects and motivations – some of which contradicted one another. There were experts on generational thinking, human-centred design, futurism, cathedral thinking and the millennial mindset, just to name a few.
Stepping out at the end of the conference felt a little like coming out of a cocoon as a half-baked butterfly. While I was heartily inspired by the positive purpose safe-zone, there were many voices offering different advice on how to do purpose well. But as suspected, even the people gathered under the purpose-umbrella are not fully agreed on what a purpose-driven business really is.
With some time to digest the experience and discuss it with people who know more than me, I’ve sifted through the voices to draw some conclusions about purpose-driven business. I hope my perspective might give you an entry point into the purpose space, and perhaps show you how your business can join the collective in a meaningful way.
We’ve all asked ourselves “why?” at some point in life, whether it’s on an existential level – “why am I on this earth?” – or on a task level – “why do I bother doing this?” We seek meaning through self-expression, art, music, sport, relationships, family, travel and religion. For many of us, we define ourselves by these things.
In today’s first-world where buying, selling and working to pay the bills takes up the majority of the week, the question of “why” has slowly crossed from the personal realm to the commercial realm. If a business can offer meaning in the same way other things in life do, they can connect with customers, employees and communities in a deeper and more rewarding way. And so today, it has become widely recognised that purpose is increasingly necessary for success. Purpose sells.
With its rise in popularity, a wide spectrum of companies have begun to gather under the title of ‘purpose-driven business’. It’s no longer just the non-for-profits and charities who exist for a higher reason. You’ve got your innovators and disrupters, who offer customers better choices in monopolised markets; there are social enterprises, who have been doing good and making money for a while now; there’s conscious capitalists – believers in business as a powerful force for change – and B Corps who are the officially certified sustainable companies.
With so many businesses claiming the title, it is becoming hard to define and measure the purpose-driven business model. Which leads me to my next point.
When you put business and purpose together, you get a conflict of interests. John Mackey, the co-founder of Whole Foods and co-author of Conscious Capitalism explained it in this way:
The best way to maximise profits is not to make profits a primary goal.
This is the purpose paradox, and I believe it is a major source of confusion around purpose-driven business because it leads to a common mistake — thinking of purpose as black and white.
Companies shouldn’t identify as being purpose-driven or profit-driven. Rather, they should consider where they fit on a spectrum between purpose being the ultimate goal or profits.For example, Thankyou water give all their profits away to charities. Their reason for existence is to make money to end poverty. So they would sit at the far left of the spectrum. Apple, on the other hand, are driven by the purpose of progressing humanity through well designed technology. But the built-in obsolescence of their products and approach to sustainability tells us that profit is still of high importance to them, so they’d be a little further to the middle. Companies that exist only to serve shareholders and deliver profit would sit on the far right. I think it’s safe to say an example of this would be a cigarette company.
There is mercy in recognising that purpose is a spectrum, rather than a definition. It means that purpose is scalable, accessible and changeable. Any company can start to introduce more sustainable practices to their business by considering purpose – and they don’t need to have all the answers straight away. Purpose is a work in progress, and we can all start to slide further left on the spectrum in small ways.
However, there is a trap that comes with the purpose spectrum – and that is the risk of authenticity. Wherever a company is on the spectrum, it’s important that they are genuine about that position and own it. As soon as a company claims to be more purpose-driven than they are, they can lose the very trust and meaning with customers they sought to gain in the first place.
Take H&M as an example. In 2016 they ran an ad campaign promoting gender equality by celebrating difference and challenging stereotypes. They positioned themselves as standing for something meaningful and playing a role in making the world a better place. They positioned themselves as a purpose-driven business. However, when it was revealed in a report that H&M were exploiting Cambodian staff and firing pregnant garment workers, there was a major backlash. Turns out they were just using feminism as a way to get more western women to buy their product. The discrepancy between how purpose-driven H&M claimed to be, and their true position on the spectrum lost them many customer’s trust and marred their public image. It had the opposite effect to that they intended.
Cathedral Thinking is a concept that harks back to the days of long-term planning for the construction of massive medieval churches. The idea goes that if you were to ask someone working on a cathedral “what are you doing?” they might answer one of three ways:
The first worker sees their actions as a means to an end. Cutting stones is a meaningless task with no purpose other than to put food on the table. The second worker sees the daily grind as working towards a personal achievement. They may become the greatest stone-cutter in the world, but eventually it will be forgotten. The third stone-cutter has a long term vision. They see their work as contributing to a bigger achievement, a future building that others can enjoy. And as a result, the daily task of cutting stone has meaning and purpose.
In the same way, future-oriented businesses enjoy the richness of purpose in a way that other businesses do not. For example, Rubi and Toms are both shoe manufacturers. But only one of these shoe companies is a purpose-driven business – because only one working towards a more sustainable future (That’s Toms – for every pair of shoes they sell, they give a pair to a person in the third world). In this way, Purpose is closely tied to sustainability, and it filters through the entire company – to customers, employees and society.
For some customers, the values behind a product are just as important as its functionality. Purpose-driven businesses draw on this to make the customer’s choices easier by offering a moral alternative to the products people already buy from necessity. For example, The Body Shop offers cosmetics free of animal cruelty and Who Gives a Crap offers toilet paper that gives to back the Third World. In this way, companies and customers partner together for sustainability.
The American innovator William Edwards Deming said that if you give an employee a financial target, they’ll do everything in their power to deliver it, even if it destroys the company along the way. This reward-based approach is common at the profit-end of the spectrum. However on the purpose-end, employees have more than monetary figures to measure their success against. They have values. When employees test their actions against purpose instead of profit, the work becomes about teamwork rather than personal gain. The goal is collective good rather than financial reward. The result is a champion team, rather than a team of champions, and this is the recipe for a more sustainable business.
Finally, purpose contributes to a more sustainable society. I’ve already talked about the trap of authenticity some businesses fall into – those businesses that talk purpose, but their actions do not reflect it. These are not the companies making a difference. It’s the truly purpose-driven companies who contribute to a better society because their values filter into every action the business makes – the messages they communicate, the products they produce and the people they employ. These are the companies who recognise that a purpose is never complete. It’s not a goal or a milestone. It’s not even a 10-year vision. Purpose is a set of beliefs that businesses operate by that never has a finish line so that the good work can be carried on for future generations. This is what sustainability is all about.
First-world business is in a privileged position. While more than half the world live on less than $2 a day, in Australia we can choose a meaningful career at a company who represents what we believe in!
The beautiful twist in this sad set of circumstances is that through our privilege, we can give more choice to those less fortunate than us. With purpose at the wheel, businesses can begin to move from a world where the rich minority consume the most, to a world where by consuming, we give back to those who need it more.
Right now we’re going through a period of questioning, where companies are being tested for their authenticity and businesses are being held accountable for their actions. So what will the calm after the storm look like? Purpose may be hot right now. But will it last? I think the answer is yes – because a sense of purpose is something inherent to the human experience. So long as people are searching for meaning, businesses will keep harnessing that. My hope is that purpose won’t be a passing phase, but will lead to a better, more sustainable world.
By Clare Maxwell