The power of purpose: Why should businesses act with purpose?
Thinking about “purpose-led business” may conjure up images of companies that exist solely to save the world with their product or service. If this describes your company, then congratulations and...
Thinking about “purpose-led business” may conjure up images of companies that exist solely to save the world with their product or service. If this describes your company, then congratulations and well done! If it doesn’t – fear not – purpose is still for you, because a purpose-led business is not just a business with ambitions to do good, it’s a business that is good. Organisations that imbue day-to-day actions with purposeful values are businesses that lead with purpose.
Not every loo roll, kitchen utensil, or snack needs to change the world, but they can act responsibly within the world and for the world. It is this ethos – to act with purpose while undertaking the normal everyday priorities of your business – that is possible for all companies.
In this article I explain how any business can embed purpose successfully and the benefits it will bring.
It’s important to avoid ‘purpose’ becoming a tick box exercise. For it to have true value, acting with purpose needs to be properly embedded in your organisation. There are three key elements in the purpose process to be aware of:
Purpose starts with identifying your goals as a business – what you want to focus on, what you want to achieve and what purposeful means to you. Engage your stakeholders (internal and external) on social and environmental topics, find out what matters to them, what is the most relevant and meaningful to your business, and use your findings to inform the goals you set as a company and what you want to achieve as a business.
Once you’ve identified how to act with purpose in a meaningful way, then you need to cascade it through the business. Communicating your commitment needs to come from the leadership team so that it is seen as important by everyone in the business. Your responsible goals and values need to be understood at board level, at a departmental level and at ground level – informing the whole organisation properly will bring them with you on your impact journey.
Finally, you need to ensure that acting with purpose is embedded right across the business. Put these values into your company scorecard, tie them into bonuses, build them into people’s job descriptions. An employee’s commitment to acting in a purposeful way needs to be a formal part of their role – just as sales profits might unlock annual bonuses, or a product launch be part of a job remit.
Resourcing your purpose agenda
Providing resource to properly embed responsible values is essential. Make sure your team has the tools they need to achieve these goals. Team training, allocated resources and time allowance should all be formally given to show that acting with purpose is an essential part of each individual’s role in the organisation.
You then need to track your performance. This can be done through:
- Introducing purposeful goals in performance reviews.
- Project management to ensure acting with purpose is part of all strategic initiatives.
- Holding yourself accountable.
Ensure everyone in your business has ‘permission’ to focus on this agenda. When people are given topics like sustainability or social impact as a new remit, it can sometimes be seen as a distraction or an add on – so giving people the resources to deliver it and the permission to focus on it should be a core part of how it is implemented.
Celebrate purposeful action
Don’t forget to celebrate and communicate your efforts. It’s vital for team engagement and morale. Share your progress and celebrate your achievements both internally, and externally.
Transparency is really important to show you’re on the journey to becoming a more purpose-led business – don’t just wait until you’ve reached your goal to communicate it. This not only ensures that everyone in your organisation is engaged in the process and is part of the journey, but it also acknowledges that acting with purpose is about progress and constant growth.
The end result: Acting in a purposeful way becomes business as usual.
What practical steps can you take now to be more purposeful?
A good way to identify how to act with purpose in a meaningful way is to conduct a Materiality Assessment, which is a structured way of identifying, assessing and prioritising what topics your stakeholders find most important. By doing a Materiality Assessment you will narrow down your company’s social and sustainability priorities to regionally relevant and industry-specific topics, so that your values reflect what your stakeholders truly care about.
Set targets and goals using existing frameworks, like aligning your goals with the UN Sustainable Development Goals (SDGs), or setting Science Based Targets for your businesses with a clear roadmap of how to reach them.
Another excellent structure to follow is the B Impact Assessment (BIA) – this is a free online tool for businesses seeking B Corp certification, but it can also be used as a framework to improve your impact even if you don’t certify. The BIA gives you a way to identify what you could and should be measuring as a business, and how you can do it. B Corp certification is an inspiring but intensive journey, intended to bring your goals into reality with tangible, measurable steps. If you’re a business behaving responsibly, keen to act with purpose, then becoming a B Corp is well worth considering.
Why purpose? What benefits will it bring to your business?
Purposeful behaviour is motivating for your team. It not only retains your existing talent, but also attracts new talent. A global talent trends survey found that the highest-performing employees are three times more likely to work for a company with a strong sense of purpose (Mercer 2018).
You’re giving consumers what they want. 64% of global consumers find brands that actively communicate their purpose more attractive. 62% want companies to take a stand on issues they are passionate about, and 52% say they are more attracted to buy from certain brands over others if these brands stand for something bigger than just the products and services it sells. (Accenture 2018).
Investors want you to act with purpose too! More and more investors identify businesses with purposeful agendas as a deciding factor in their investment decision. Purposeful brands set on improving our quality of life outperform the stock market by 120% (Interbrand 2017).
Leave a legacy. If you’re a founder then building a company that you’re proud of is vital to leaving a legacy that survives. 64% of people globally expect CEOs to lead on social change rather than waiting for government intervention(Edelman 2018). 94% of CEO’s feel a personal responsibility for laying out their company’s core purpose and role in society. (UN & Accenture 2019)
Businesses acting with purpose are proven to be more resilient. A core set of values and clear social and environmental commitments leave companies better prepared to weather the storms ahead. Certified B Corps had an impressive 51% revenue growth rate during the 2008 financial crisis (Yale 2018).
Most importantly, companies are a core driving force behind the state and health of the environment and society and therefore have a duty to act with care. Purpose-led companies are essential for a fairer future. Be part of the solution, not the problem!
Seismic at the Sustainability Leaders Forum
Amy Bourbeau will be joining the plenary panel at edie’s Sustainability Leaders Forum on 8 March 2022, speaking about how courageous companies can lead with purpose. You can also join Amy and the Seismic team for a B Corp Breakfast briefing on day two of the London event, or drop into our online live chat at any point during the event to speak with a B Leader.
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.