Regardless of the size of your business or the sector you operate in, the purpose movement is shaking up the rules of business and ringing in a new era where business is an active participant in making the world a better place. Sound slightly utopian? Perhaps, but with success stories like TOMS and Patagonia, it is very apparent that business and purpose can be combined with great impact and rewards. These success stories, and many more like them are causing those in the business world to sit up and take notice. And we’re seeing successful leaders such as Sir Richard Branson not only embracing this new standard but they are also leading the charge.
“We need a new mindset to make capitalism an acceptable force in the world. If businesses are purely about profit and amassing bonuses, screwing people and the world in the process, then they will not be around for long, and don’t deserve to be. But if they start to be a force for good, I genuinely think we could get on top of most of the problems of the world.” 1 -Sir Richard Branson
The perfect storm
Corporate social responsibility, triple bottom line, corporate social innovation, corporate citizenship, shared value, the fifth Pin marketing – you`ve likely heard at least one of these popular phrases, and the list continues to grow. Though there are nuances in the definitions of each, all of these terms are connected to the concept that business and society are interdependent.
Traditionally, non-profit organizations shouldered the lion’s share of responsibility for tackling the challenges that communities face - everything from homelessness and water and food insecurity to increased pressures on the environment. Cutbacks in traditional funding sources coupled with an increased demand for services have many non-profit organizations facing some very tough decisions.
On the flip side, we are seeing more and more non-profit and business sectors, government, and citizens recognizing that the health of our communities is everyone’s responsibility and it’s creating some innovative partnerships. The expectation around the role of business in communities in particular has shifted quite dramatically, and continues to do so. Doing the right thing in business – meaning ethical practices — is just table stakes at this point. Consumers and employees are expecting businesses to be active participants in building strong, healthy communities. Moreover, the business community is recognizing that their success is tied to the success of the community around it; a business can’t succee if the community is failing.
Consider this:
Benefits of embedding purpose in business
Though expectations are high, the good news for the business sector is that it not only has the ability to apply its expertise in ways that matter to communities, but they can also reap some pretty significant rewards in the process. Companies that authentically embrace purpose in their operations see a number of benefits including:
1. Employee recruitment and retention - Graham Lowe, author of Creating Healthy Organizations3, reviewed the best workplaces in Canada and found a common thread: companies with a strong commitment to the community also had vibrant, soughtafter workplaces where staff turnover was low. By working together for a common purpose and greater good, a strong sense of pride, family, and commitment were evident not only internally but with relationships externally as well.
2. Increased profitability - We all know the integral role that employees play in the success of a business. When employees are happy, companies see greater efficiency, profits, and loyalty from their customers. Gallup looked at 199 studies covering 152 organizations, 44 industries, and 26 countries. They discovered that for companies with more employee engagement, their profitability jumped by 16 per cent. Not only that, general productivity was 18 per cent higher than other companies, customer loyalty was 12 per cent higher, and quality jumped up by an incredible 60 per cent.4 Compelling, isn’t it?
3. Customers become your marketers - We all know how powerful word of mouth is. We are inundated by thousands of marketing messages in a single day (some stats estimate 3000 ads per day). It’s cluttered out there, and the fact is that many of us tend to tune it out. We rely on recommendations from our friends, family, and co-workers. When you incorporate purpose beyond profit into your business, your customers naturally become your biggest marketers.
The founder of TOMS, Blake Mycoskie, has been quoted telling a great story that illustrates this point. He spotted a woman wearing bright red TOMS in an airport once and approached her to ask her about her shoes to see what she would say. He was blown away by her response. Not only did she call TOMS the greatest company in the world, but she was excited to share the TOMS story and their philosophy. She was a passionate brand advocate. No amount of marketing budget can replace that kind of advocacy.
Next steps
How do you embed purpose into your business? It is much easier than you may think, and you may already be testing the waters without realizing it. Philanthropy and sponsorships are typically the first steps that businesses take as they begin to develop partnerships in the non-profit sector. Volunteer programs and innovative partnerships that leverage your unique assets and expertise are just some of the options to explore as you deepen your engagement. One thing to remember is there’s no one-size-fits-all approach. You can tailor your involvement based on the size of your company and on the impact areas that mean the most to your organization, your stakeholders, or your community.
Perhaps the most important thing you can do as you’re exploring the various options and implementing your program is to share your stories. Talk about it, sing about it, and shout it from the rooftops. Not only because of the positive implications it can have for your business, but because it helps build the momentum; it raises the bar and encourages other businesses to get involved too. You may be surprised at the innovative and impactful collaborations that result.
It’s an exciting time for business as legacy is becoming an important consideration in day-to-day operations. The power of an entire community coming together is undeniable. And whether it seems utopian or not, the vision of strong, healthy communities is worth fighting for – now and into the future. Welcome to the purpose era.
Sue Manzuik works in the community engagement department at Interior Savings. Passionate about purpose in business, she is an advocate for strategic non-profit and for-profit partnerships that support healthy, sustainable communities.
Follow her on Twitter: @SueManzuik.
Sources:
1 Sir Richard Branson. (2011, Nov 19). We must learn that doing good is good for business. The Telegraph. Retrieved from www.telegraph.co.uk/earth/earthcomment/geoffrey-lean/
2 Cone Communications, http://www.conecomm.com/research-blog/2013-cone-communications-echo-global-csrstudy
3 Lowe, G. (2004). Creating healthy organizations: How vibrant workplaces inspire employees to achieve sustainable success.Toronto, Ontario: The Graham Lowe Group and Heath Canada.
4 Realized Worth, http://www.realizedworth.com/2011/06/business-case-for-employee-volunteering.html
This article first appeared in the Fall 2016 issue of SICA's Construction Review Magazine. To read the entire magazine click here.
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