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The Right Way – and Wrong Way – to Embrace Purpose as the New Way to Do Business
March 20, 2017
Today’s employees want more from their employer than a paycheque. They crave a sense of pride and fulfillment and want to work for a company whose values match their own. A recent UK report found that companies with a social mission have a significant competitive advantage when attracting and retaining employees.
The same study reveals that consumers want to do business with purposeful companies. But, according to recent Globescan research, there is a 20 percent gap between consumer desire to support purposeful companies and the ability to do so because they cannot find them.
Further muddying the waters for consumers is the challenge of identifying an authentic social purpose business. Many companies boast of their social visions or social purposes on their community or sustainability pages, but this commitment does not carry over into their ‘About Us’ page or in CEO or investor communications.
These are sure signs of “purpose-washing” – when a company articulates a social purpose but is not guided by it. It’s a disconnect that understandably makes consumers skeptical about the true nature of a social purpose business. As a consequence, the transition to authentically for-good businesses, markets and economies stalls.
But there’s some good news emerging: Attempts are underway to define and find social purpose businesses. The UK study referenced above - which uses the term “mission-led” - defines the nature of social purpose this way:
- Intent: a for-profit company with a strong strategic commitment to a social or environmental mission
- Business model: The company’s social purpose is central to its core business model, reflecting the core commercial activity and influencing capital allocation
- Governance and operations: The business embeds its social purpose into its governance, operations and relationships with stakeholders
- External perception: The business publicly positions itself as a social purpose enterprise
Using this definition, the UK researchers found 123,000 mission-led businesses across the UK, representing 4.3 percent of the economy and 4.5 percent of the workforce. A good start.
Want to attract and retain great employees? Build deeper relationships with clients? Advance social progress? Evolving your company to embrace a social purpose business model takes commitment and energy, but you don’t have to go it alone. Here are some actions you can take right now:
- Read all about “social purpose” – one of the Qualities of a Transformational Company. In this research I conducted for Canadian Business for Social Responsibility on the new paradigm of corporate social responsibility and sustainability, you’ll find helpful tools and tips to get you started or help you on your purposeful journey.
- Check out this short primer on the Social Purpose Company.
The future of business is social. Be part of it.