Where Purpose Drives Profit
Beyond Good Business is an opportunity for more businesses to explore how they can make their businesses stronger by addressing some of society’s biggest challenges. At a global level, multinational businesses contributed – alongside governments and NGOs – to the setting of the Sustainable Development Goals (SDGs) by the UN in 2015 and countless corporations are now mapping their own performance against the social and environmental targets in the 17 goals.
At a personal level, my company, salt, became a B (benefit) Corporation in 2015 when the mark was introduced to the UK– an accreditation for companies that are managed in a way that balances shareholders’ financial interests and the benefits it brings to people, the environment and broader society, http://bcorporation.uk/blog/better-know-a-b-salt-communications. We did it because we believe in the values of mission-led businesses, in recognising the role of business in relation to society and the environment, in going beyond good business. We saw certification as a way of demonstrating our commitment to making a positive impact. But we also did it because we want to be a better, more profitable business. Companies with a clear purpose and a clear understanding of the social context in which they operate ARE better businesses.
Being a B-Corp makes us a better employer – our impact criteria in the assessment point us towards how we can better develop and train them as well as give them more of a stake in running the business, which helps us attract, motivate and retain our talent. It helps us do better work for our customers and attract more customers in the first place.
At the other end of the scale Danone, the French-based multinational, recently announced that its US subsidiary, DanoneWave, a business with more than $6 billion in sales and 6,000 employees, has become a benefit corporation. Its articles of association talk to bringing health through food to as many people as possible, promoting sustainable growth and minimising its impacts on the environment. But they also call out how DanoneWave’s status as a public benefit corporation is key to accelerating the company’ growth strategy. Rose Marcario, the CEO of Patagonia, which was established as the first benefit corporation in California in 2012, will sit on DanoneWave’s advisory committee and said, “profits can and will still be made, perhaps at greater levels than ever before, as in Patagonia’s case.”
Other companies attending Beyond Good Business will be B Corporations already, and more will be considering it. Do it. Do it because you believe in your business having a purpose. But also do it because you believe in being profitable and wanting to make your business better. Profit and purpose not only can go hand in hand, they SHOULD go hand in hand. Where salt can make a positive impact is different to where Danone can make one, and each company has to identify the right purpose for them. What is it they can do to contribute to society that people would miss if they were no longer there? What can they do that is authentic to their business, relevant to their stakeholders and drives profitable growth?
In researching my book, Business on a Mission: How to Build a Sustainable Brand, I was fortunate to talk to a number of business and NGO leaders. The models that we have developed from these point to common themes: that for-profit and not-for-profit organisations need each other; that businesses become stronger when they understand and respond to their social context; and that the transparency of social media and the digital age are bringing the days of businesses being able to ignore their societal and environmental obligations to an end. Profit through purpose will fast become the norm.