The surprising truth about what motivates us

What truly motivates us? This great animation by the RSA explores the typical motivation scheme of many organisations – the idea that if you reward something you get more of what you want – and finds that offering financial incentives can lead to poorer performance.

Studies from around the world and across a variety of different sectors (economy, psychology, sociology) reveal that when a worker is offered more money for a mechanical task, the scheme works as expected and their performance improves. However, when it comes to tasks that involve cognitive skills, the studies find that performance actually drops.  

For these tasks, there are 3 factors that result in better performance: autonomy, mastery and purpose. Self direction leads to higher engagement and more creative approaches to challenges, and many innovative companies are already seeing the benefits of designating time for employees to work on and share creative personal projects.

The purpose motivator is what drives people to go to work in the morning. We know that the millennial workforce is increasingly valuing purpose over profit, as they are most attracted to companies that can prove a clear, actionable purpose to better world. Beyond Good Business 2017 speakers, the Corporate Rebels, have toured the world visiting such companies and found the most engaged workforces tend to be at organisations where the purpose and values are clearly articulated and demonstrated to their employees.

That is not to say that money doesn’t matter to employees. Their pay should still indicate that they are a valued by the organisation, but to keep employees engaged and accountable, the purpose motive must remain paramount to profit.

Boost your productivity through creative arts

When I think of positive disruption in the workplace, my mind goes straight to creativity. I believe we all have creative talents within us and from my experience as a creative entrepreneur, unlocking your creative potential has the power to shift your perspective, take you out of your comfort zone and boost confidence.

As a creative producer and dance practitioner, I’ve witnessed many moments of inner-transformation at my classes, workshops and events. One of the ways I currently support entrepreneurs and business owners to boost productivity, creativity and enhance wellbeing, is through teaching dance. I’ve taught people of all ages, abilities and backgrounds in corporate settings and in the charity sector, as well as at national events and independent workshops. Through these experiences I’ve seen how inner-transformation is a key component of dancing. Yes, even the most ‘uncoordinated’ soul can surprise themselves by their ability and that is one of the most joyful moments to witness as a teacher! Plus, dance simply makes you feel good – and in the workplace, feeling good is essential.

Shift your perspective

“But I don’t see myself as a dancer.” Is this the first thought that ran through your mind? If so it’s okay, I’m certain you’re not alone – and I love teaching people with this perception as I can guarantee they’ll see a shift in their perspective! A dance class can be a very powerful team building exercise. Essentially, dance is supposed to be enjoyable. I haven’t yet come across someone who doesn’t enjoy music and I’d be hard pushed to find anyone who doesn’t feel inclined to move their body to a song they love, or a vibrant new beat or rhythm that catches their attention. When you allow yourself to let go of your inhibitions, go with the flow and release any perceptions you may have about your level of creative ability, it’s highly likely you’ll feel a) uplifted by the blend of dance and music (there is growing research in this area about the long-term medicinal benefits of dance, particularly for people with long-term health conditions), b) socially connected to those around you (in this often overwhelming digital age, that can only be a good thing) and c) empowered by learning a new set of skills. In relation to the workplace a) you’ll feel relieved of any work-related stress or worries during the class, enabling you to approach your work from a fresh perspective afterwards b) by getting away from the laptop or phone for a period of time, you connect with others on a human level, in a neutral setting c) you’ll enhance your range of ability, which highlights openness to take on new skills and challenges.

Step out of your comfort zone

I believe there’s a lot of value in this statement. By pushing ourselves to develop personally and professionally, it sometimes requires trying something that may scare us a little and feel uncomfortable in some way. Consider a time when you’ve tried something new and surpassed all personal expectations – dance has the potential to do just that. It pushes you to explore what you’re capable of achieving. It challenges you to achieve something you may feel is out of the ordinary. It requires discipline and social awareness. Above all, historically the heart of dancing has always centred on one thing – it’s fun! For centuries, dance has existed as a form of positive communication in various cultural communities around the world, as a way to express, share, laugh and spread joy. Case in point: by stepping out of your comfort zone and expressing yourself creatively, you’re likely to find hidden abilities, you’ll discover a new way of expressing your feelings and it can even encourage you to consider areas of your working life which may require you to step out of your comfort zone in order to reap further rewards.

Boost your confidence

An outcome of going through an experience that shifts your perspective and encourages you to step out of your comfort zone, is enhanced confidence. Not only is dance an excellent way to improve your physical health, it is increasingly being used as a tool to build self-esteem, self-confidence and boost wellbeing. Have a go at trying out a new, creative practice with and be proud of what you’ve achieved – let go and have fun. By acknowledging your efforts in this way, this can translate into other areas of your life, where you may find you’re more capable and courageous than you’d imagined!

There are many creative and artistic practices that can be used as positive disruption in the workplace. Here, I’ve outlined just one but I encourage you to unlock your creative potential wherever possible as a way to boost productivity, improve your physical health and connect with the present moment.

www.thisiscalmer.com

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.

The Credibility Of Profit & Purpose

There is much talk of ‘Mission Driven Businesses’. Debate flows on whether profit and purpose are contradictory or complimentary. For me it is a question of credibility between customers and providers. So, what is credibility?

Simply put, credibility is basically trust and it is subjective so at the mercy of perceptions. Accordingly credibility is set by the net difference between expectations and reality. However, it may be useful to dig down further on what credibility is to gain a better grasp of how to optimise the blend of profit and purpose suitable for your brand.

Credibility is comprised of accountability (the ability of consumers to hold providers responsible) and legitimacy. Fritz Scharpf is best known for distinguishing legitimacy as having two aspects: input and output legitimacy. Input legitimacy is authority based on representation and fairness, usually on the basis that those affected by decisions have a right to have a meaningful part in the decisions made. Output legitimacy reflects that those with most power have more rights in making decision making as they have the most power to commit to decisions or not.

So, how does your brand manage its accountability and its legitimacy? Hopefully these concepts provide useful handles by which to reconsider the blend of profit and purpose for you in fostering greater trust with customers.

 

Uniting behind the mission: reconciling managers, shareholders and society

Managers v shareholders – Round 1

The prize for the first recorded case of shareholder activism may well go to an American professional investor named Benjamin Graham. In 1926, he spotted that Northern Pipeline, one of the offshoots from the break-up of JD Rockefeller’s oil monopoly Standard Oil, was sitting on a pile of unused assets that could be used for a handsome dividend to shareholders.

His attempts to persuade the company to distribute the spare cash were resisted with disdain and a degree of skulduggery by the board of directors, but he won in the end.

So who’s being greedy, exactly?

Fast forward to 1987, and a more famous (and fictional) professional investor named Gordon Gekko made a similar argument at the shareholder meeting of an ailing corporation, Teldar Paper, in the movie “Wall Street”.

Lambasting the Chairman and 33 vice-presidents for bureaucracy, mediocracy, and feathering their own nests at the expense of the company, he rallied the stockholders behind him with the infamous proclamation “Greed, for the want of a better word, is good”.

Supposedly based on the speeches of real life corporate raiders, the passage is more subtle than its most famous phrase suggests, and Gekko lands several rhetorical punches on what may have been a management guilty of complacency and underperformance to the detriment not just of the shareholders, but the economy too.

Nonetheless, Gekko epitomises the kind of ‘anything goes if the share price goes up’ financial capitalism that had been building momentum ever since Milton Friedman argued that the social responsibility of companies was to make as much profit as possible, and nothing else.

Getting beyond the principal-agent problem

Gekko’s speech was highlighting a well-known problem in economics known as the principal-agent problem. The agent, in this case the company’s management, have interests that are different from those of the principal, the company’s shareholders. As a result shareholders are not well served and companies underperform their potential, or so goes the theory.

But in some cases the cure has turned out worse than the disease. Executives have been loaded up with share options to better align their interests with shareholders. Far from leading us to the economic nirvana promised by Friedman, it has led to spiralling executive pay, grotesque inequality, and an endemic short-termism in corporate Britain that has resisted a succession of hand-wringing official commissions and enquiries into how to solve it.

Arguably, it led us ultimately to the global financial crisis that exploded 20 years after the cinema release of Wall Street, when the collapse of Lehman Brothers provoking the most severe recession in many countries since the Great Depression.

Another failed Wall Street firm, Bear Stearns, had gloried in its mantra – displayed on the walls of its dealing rooms – to “Make nothing but money.”

When there is no purpose other than profit, business can become not just harmful to society but its own worst enemy too.

From shared profits to shared mission

So where is society in all this? Aren’t people and planet the ultimate ‘Principals’ for business endeavour and, if so, how are their interests to be aligned with both managers and shareholders?

The answer may lie in part in a return to an earlier version of capitalism, but with an important upgrade.

The lesson from the past is that purpose used to be central to the very existence of a corporation. Limited liability was granted as a privilege, originally requiring an Act of Parliament, to encourage investment in socially and economically important infrastructure and large-scale commerce that was beyond the means of smaller business partnerships.

Business with a clear purpose is not a new idea. It is arguably the original point of it all.

From corporate raiders to co-operative players

The important upgrade, though, is to unite managers, investors and society, including future generations, behind a shared mission that can be articulated with sufficient precision to measure success or failure.

We now know that profits cannot be the single yardstick of corporate success. No market is so textbook perfect as to allow this to be anything other than reckless disregard for all the other important social, economic and environmental impacts – both positive and negative – that businesses have in the messy and complex real world.

But we cannot have no yardsticks at all.

After all, if managers are not held to account they might end up as complacent as Teldar Paper’s 33 pampered Vice-Presidents, and we will just have ended up with a new kind of principal-agent problem.

Instead, uniting behind the mission could be the way to move beyond antagonistic manager-shareholder-stakeholder trade-offs while still keeping managers on their toes and harnessing the creative power of enterprise for the greater good.

Stop Focusing on Profits Right Now! Instead, Build a Community on Purpose and Values

Globally, we visited over 50 organizations that have a radically different perspective on how to successfully organize work. They challenge our thoughts and assumptions and have successfully cracked the code and created a workplace where people love to work. During our worldwide search to these pioneers, we have uncovered what sets these organizations apart.

In our blog series Rebel Trends we discuss these 8 trends one by one. In this first episode we bust the old money-making paradigm and describe the move from empty profits to an inspiring purpose and values.

PROFIT ALONE WON’T DO IT

We have found that profit maximization doesn’t seem to be the main goal of inspiring workplaces. Money is not what drives them and it is not what makes their workforce highly engaging. Why not? Because they prefer to focus on intrinsic motivation (i.e. purpose, mastery, autonomy) rather than extrinsic motivation (i.e. money, fame, grades) to engage their employees. Their organization is about something bigger than just making money.

This doesn’t mean that profit is seen as being unimportant. Profit is important but it is simply not the reason why the organizations exist. The organizations exist for more inspiring reasons. Making money is just seen as the necessary condition for pursuing the higher purpose of the organization.

Jean-Francois Zobrist described it to us beautifully: “Money should not be the goal of the company, but it should be the main source. Like breathing is the main source of life. Money is for the organization what breathing is for the human being. Because without making money the organization will not live long.”

FROM MAXIMIZING SHAREHOLDER VALUE TO AN INSPIRING PURPOSE

Therefore, the places we visited are driven and motivated by aspiring a bigger purpose rather than just profits. A purpose that provides employees with lots of energy, passion and motivation to get out of bed in the morning. It has the power to overcome bureaucracy, silos and egos and helps to unleash the full potential of the organization.

But let’s be clear. When we talk about an inspiring purpose we are not talking about those boring mission statements that no-one in the company can recite. We are talking about a crisp and clear cause that unites and activates all people within the organization. An inspiring mission that does best for the organization, the employees, the customers and the world in the long-term.

Patagonia’s inspiring purpose clearly illustrates their reason for being: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

The inspiring purpose is the organization’s fundamental reason for existence. It’s like the north star that guides and inspires people on their way to success. The purposes we encounter are often stable for long periods of time and seldom or never change. The Bucket List companies clearly show that operating with an inspiring purpose creates a competitive advantage.

THE PURPOSE PARADOX

The strange thing about purpose-driven companies is that the most profitable companies are not the most profit-focused. Various research studies show that purpose-driven organizations outperform their competitors. In his book Firms of Endearment, Raj Sisodia concludes that purpose-led companies outperform the S&P 500 by 10 times between 1996 and 2011.

Another study by Nielsen found that “55% of global respondents are willing to pay extra for products and services from companies that are committed to positive social and environmental impact—up from 50 percent in 2012 and 45 percent in 2011”. Therefore, an increasing amount of consumers are willing to pay more if they relate to the organization’s purpose.

FROM STANDARD OPERATING PROCEDURES TO A CLEAR SET OF CORE VALUES

Besides having a strong purpose, inspiring workplaces clearly define who they are, how they treat each other, where they stand for and what they are all about. However, they don’t bother capturing this in detailed standard operating procedures and protocols. Instead, they establish a clear set of core values that describe the organization’s way of working.

The core values are essential for the organization and used by its people as a set of guiding principles. It seems a pragmatic choice because to fully be able to benefit from the collective intelligence of everyone, organizations should get rid of most of the rules, procedures and other bureaucratic instruments that slow down organizations.

A clear set of core values provides employees with guidance to help them to use their best judgement. It provides employees with a framework to act in the right way with the right mindset, without the need of extensive bureaucracy.

Doug Kirkpatrick on the importance of guiding principles: “At Morning Star it all starts with two main principles. First, people should not use force against others; all interactions should be voluntary. And second, people should honor the commitments they make to others. Without these principles we are doomed to fail”.

To be clear, a set of core values is not meant for corporate propaganda to fill annual reports or as decoration for corporate buildings. They should be ‘lived’ authentically and in a high extent throughout the entire organization. Everyone in the organization is supposed to find solutions, make decisions and behave consistently with the ruling set of core values. The set of core values seldom change. The practices to support them and bring them to life, however, do.

HOW TO BRING YOUR PURPOSE AND VALUES TO LIFE?

We are convinced that everyone can profit from having an inspiring purpose and a clear set of core values. And this doesn’t necessarily have to be a company wide effort. You can start to pioneer within your own team, your department or your division.

If you don’t already have an inspiring purpose and a clear set of core values we encourage you to make serious work to define them. At first, let people define their own inspiring mission statements that reflect who they are and what they will contribute to the organization’s success. Think about what your reason of being is. And what would happen if your team, department or organization ceases to exist.

1. DEFINE YOUR PURPOSE AND VALUES
  • Envision your purpose by dreaming, feedback, and adapting (Zingerman’s)
  • Translate the purpose from organizational level to departments, teams and individuals (Morning Star)
  • Determine values & guidelines together with all employees (Spotify, Cyberclick)

Be careful that they don’t end up as corporate decoration. So, once you have defined an inspiring purpose and your set of core values it’s time to look for ways to make them come to life. A great way to do this is through tangible practices.

2. BUILD PRACTICES AROUND THEM

Translate the purpose and values into concrete actions and practices. Let them guide and inspire your daily work. Use them during the hiring process, to make decisions, to behave accordingly and let them guide the organization in times of glory and in times of crisis. Here’s some great examples of the pioneers we’ve visited:

  • Measure impact, track progress and make the purpose visible (Patagonia)
  • Put your money where your mouth is (Patagonia, Cyberclick)
  • Make values & guidelines visible and part of daily decision making (UKTV, Spotify)
  • Award for demonstrating values (UKTV, Cyberclick)

We have seen the power of purpose & values at various pioneers around the globe. By focusing strongly on their purpose and values, they are able to build a community of like-minded people. It brings together employees, customers, suppliers, and others who invest time, money and effort into fighting for the same cause.

The motivation, drive, and commitment that are unleashed are unlike those of organizations that focus solely on profit. It’s time to move away from the old money-centered paradigm and move towards organizations that build communities and rally around a common purpose and values.

 

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Do Good, Make money & Change the World?

As we, at Hatch, started designing our Beyond Good Business conference in May, we had to ask ourselves what is ‘Good Business’? And what would we like the future of business to look like? Through reflection and research, we found three main indicators of good business that are particularly relevant in today’s environment. Good business provides supportive workplaces for employees, values purpose as well as profit and is inclusive and innovative.

Workplace wellbeing is an idea that has gained significant traction and importance over the past few years. Traditional large businesses are facing higher levels of competition from disruptive startups and scale-ups, such as Airbnb, which are known for their collaborative workplace culture among other, non-financial benefits to employees (flexible working, health, travel and holiday benefits).

We’ve also noticed a shift in millennial workplace expectations, which businesses must adapt to if they expect to retain top talent. Generation Y, those born during the 1980s and early 1990s, are increasingly placing more value on a company’s mission and workplace environment than on salary and pension alone. According to the Deloitte 2017 Millennial Survey, 38% of millennials would still leave their jobs within two years if given the choice of working for a purpose-driven business. The survey data showed that businesses that “engage in issues of [social and environmental] concern relevant to millennials are more likely to gain their trust and loyalty.” (Deloitte).

This desire to combine purpose and profit is not a new concept. Even old industrialists realised that more has to be done than just making money.

“Business must run at a profit, else it will die. But when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.” – Henry Ford

Considering the various societal challenges we are currently facing, business should, no – business must do more to address these. Especially larger organisations that control much of what we eat, drink and consume in our daily lives. The 2016 report released by the Advisory Panel to the Mission-led Business Review (MBR) highlighted the importance of purpose in business, claiming current societal challenges are too big for the government or the social sector to tackle without the help of business.

Purpose is not only important to employees, but is also reflected in consumption patterns. Consumers are increasingly willing to pay more for ethical products. Without profit however, business growth stagnates. Making money is a necessary condition for pursuing the higher purpose of the business. It is therefore important that companies find the right balance between profit and purpose to optimise their business.

We already know that innovation and inclusivity are not only key to ‘good business’, they are essential for sustained success. But corporates are newly waking up to the reality that startups are disrupting entire industries from the bottom up. Those that are innovative see them not as a threat, but as potential partners who can add great value to their business.

Corporate-startup collaboration has benefits for both sides. Startups acquire market knowledge and experience, develop economies of scale, gain established networks and brand power, along with other considerable resources. Corporates can develop and test new technologies with less costs and risk when working with startups.

We are enthusiastic about exploring the intersection of passion and profit, and more specifically, how societal challenges can be addressed by collaboration between large corporates and mission driven businesses/ startups.

Our upcoming conference Beyond Good Business 2017 will allow attendees to engage with successful examples of startup-corporate collaboration. We will explore contentious topics to find the right balance between profit and purpose, and our amazing speakers will offer deep insights into national and international best practices on the topic.

This is a conference not only for practitioners, entrepreneurs and innovators but also for those interested in finding out what policies are driving more mission-driven business.

 

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Purpose is the new disruption

It used to be the case that once businesses got to make profit they would choose to give some of it “away” or “back”. That’s now rapidly becoming an out-dated model, just as we are increasingly seeing corporate social responsibility – where an organisation continues its usual practices and out-sources the doing of good to one member of the team, leaving everyone else as they were.

When we opened Roast 11 years ago, we did something a bit unusual; from day one we allocated all the profits from one table to support good causes. To many this would be an unworkable model, extending more than organically required for the transition from loss mode to profit. Instead of looking at it as a cost, I called it an investment not just in the sense of supporting hard to reach individuals and communities, but as I was to discover after some time, into the improved commercial performance of the company.

Customers started to make a point of coming to Roast in the hope they would get to sit at that table. Candidates for job vacancies would invariably have as their first question “Can I see which is the Foundation table?” as they wanted to work for a company that did things like that.

Over time we ramped up our social impact activities, most notably with our work with prisoners and ex-offenders and one day the light switched on in my mind that this wasn’t extra-curricular work but  core commercial activity. The realisation came after I went to visit Brixton Prison when Gordon Ramsay was doing a television series teaching inmates how to cook. To cut a long story short, one of those inmates ended up coming to work for us upon release and The Evening Standard ran a story about it. On the back of that we received e-mails and calls from people saying they had never been to Roast but now that they knew we did things like this, they would start coming.

The message was clear – our customers and our employees had the same values as us, possibly having acquired them before we had and for public facing businesses in particular it’s a message that is ignored at your peril. The fact that Deutsche Bank is sponsoring the Beyond Good Business event in May shows that this is now mainstream thinking. And there’s plenty of proof to show that doing good is good for business. Communications giant Havas has developed one such movement through the creation of its Meaningful Brands programme.

A study of 1000 companies shows that businesses which have social and environmental concerns at their core have a 46% a greater “return on wallet” than companies that don’t.

So the word on any savvy entrepreneur’s mind now is purpose. Start with why as Simon Sinek says, then show us what you do, not what you say, prove you mean it and then show it works. The good news is that there are a number of impact investor funds and individuals who are seeking to back businesses that can demonstrate these key elements. To be effective a purpose driven business is one that seeks profit but uses these drivers to get there.

In the old days we used to make money with one hand and give some of it away with the other. That was the two–coin approach. Then companies started to undertake CSR and we talked of two sides of the same coin. The purpose driven business just sees one coin.

 

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Responsible business: tracking the walk or cherishing the talk?

What are the most important elements for companies if they are serious about contributing to a better society? I think these are considering it strategically and working on trust. Zooming in on the latter, how to build trust? I see two main ways: track and monitor, and engage in dialogue, And in fact, we are likely to need both.

A flood of reports shows that there is a growing case for “responsible” or “purpose driven” business. There is a growing belief, ‘even’ amongst millennials, that the private sector can in fact transition towards embracing these paradigms.

From intention to performance

Here I want to mention two aspects that will crucially influence the way how a company will in reality be able to contribute to a better world:

  • Strategic outlook: to which extent is its main driver to create an as large as possible overlap between Value for the Company, Value for its Employees and Value for Society. They all matter, and ideally to an equal extent: one does not exist without the other, they feed into and depend on each other.
  • Building Trust: creating a “contract” between the company (say its Board), its internal stakeholders (employees) and the rest of society.

In the remainder of this blog I want to talk about the second aspect. 

Building trust with written or social contracts?

How can a company build trust in delivering on its promises? Roughly there are two main ways:

  • A written (one might call it ‘commercial’) contract: set (socially relevant) targets for performance, track, monitor and report on them. Show that you can deliver, and use that as a basis towards especially external stakeholders to acknowledge you Walk the Talk. Advantages are that there are many metrics available, they can usually be well measured, compared, benchmarked even. Disadvantages however are that it encourages to set targets only on things that can (easily) be measured, which do not necessarily represent the most important changes, the world may evolve faster than old targets can be met and a focus on mere numbers can encourage some form of manipulation or incomplete perception.
  • A social contract: based on an initial collection of numbers and ‘stories’ the company engages in a continuous transparent dialogue with its stakeholders, internal and external. Metrics and how the company scores on these can serve as input for that dialogue, they are however not the endpoint. By means of joint interpretation of facts and experiences by internal and external stakeholders, all assess how the company is doing. Advantages are there will be more room for adaptation to a rapidly evolving society, like abandoning numbers that have lost their meaning, it allows more space for personal experiences entering the equation and all in all it represents more of a “breathing” process. Disadvantages can be found on the other side of this coin: it will be more difficult to tell exactly whether a company made good on its promises, and how they perform compared to others. You can’t compare stories and dialogue as easily as numbers. This can give the impression of losing objectiveness.

Numbers, dialogue or both?

So which one should we prefer? Building trust by establishing measurable facts (which are likely to tell only part of the story), or by engaging in open dialogue (which is more difficult to track and compare)?

Or is it, as so often is the case, a matter of combining the best of both worlds? Put some effort in determining meaningful measurable metrics, but only as one part of a continuous dialogue with internal and external stakeholders, and a willingness to let the balance between the two, and the exact contents, evolve. In other words, in a good way combine the guidance of numbers with the dynamics of dialogue.

It is not difficult to see which of the three scenario’s I prefer myself. But it would be even more interesting to find out what everyone else is thinking. Feel invited to share your opinions.

 

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Is startup-corporate collaboration working?

It’s been a longstanding fascination with social enterprise that has led us, here at Hatch, to support business models that achieve a dual purpose. We meet and work with entrepreneurs on a daily basis and consistently find that they don’t just want to start a business to make money, but to contribute to more sustainable and equitable communities as well. Generally, we would call these businesses social enterprises, but the definition is becoming increasingly too narrow.

Instead, we are expanding and are reaching out to those entrepreneurs who want to derive profit, while producing mission-related benefits. This spectrum ranges from for-profit companies that give back through corporate social responsibility programmes to social enterprises that earn a profit through tackling social and environmental issues. For these companies, both profit and purpose play an integral role in the success of the business.

These days, every organisation needs a clear and visible reason for existence, especially as our world becomes increasingly noisy and complex. Understanding the organisation’s purpose provides a true north, a guiding light for the company’s culture. People will work harder and smarter when they know their efforts are not only serving monetary goals, but are contributing to something bigger.

While Hatch supports a whole range of entrepreneurs and startups, including mission-driven businesses, it was our contact with larger corporate partners that made a lasting impact on how we work, and on our business model. Thanks to our collaboration with Deutsche Bank and their Made for Good Programme, we were able to support over 50 mission-driven startups in South London, whilst building a strong employee engagement module to further assist these startups through mentoring and financial coaching. For some of these startups, the relationships that they could foster through our corporate partner would not have been possible in isolation. It was an active process of brokering connections that advanced the entrepreneur’s professional relationships, and provided them with the knowledge and expertise to help best run their business.

By facilitating connections between these corporate partners and startups, we get to share valuable resources with small businesses, whilst at the same time, enabling the large businesses to engage in social or environmental issues that they wish to address. We’ve also seen and worked with similar ecosystems that are growing here in London and in places like Rotterdam (Enviu) and Berlin (Social Impact Consult). It’s not easy to instigate systemic change, of course. In fact, it’s really quite difficult. But there are so many good examples around that we simply cannot ignore the benefits of bringing together mission driven-businesses, large corporate partners and intermediaries and support agencies.

Take for example Dell, who’s CEO Michael Dell, claims working with startups is a key strategy to “building a more entrepreneurial and innovative corporate culture” (Nesta, 2016). Or, Rabobank, whose startup programmes allows them to “establish a culture of constant internal learning about future trends and technologies”(Nesta, 2016).

With Beyond Good Business, our conference taking place in May, we want to explore the potential for established, large companies and startups to work together to address specific challenges we face, whilst building thriving businesses. It’s not only us who are obsessed with building bridges between newly and long-established businesses. We have met friends and partners from all over the UK and Europe who are on a similar mission. By bringing together players from the different groups, and showcasing cases of successful collaboration, we hope to foster meaningful connections for potential partnerships.

Building and sustaining purpose-driven businesses is one of the most fundamental shifts in the enterprise support sector, alongside commercial, often venture capital, backed for-profit businesses. We believe there is a real opportunity here to address society’s problems, share innovation, achieve faster product-market fit, increase workforce engagement, and deploy capital with sustainable returns.

 

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The National Lottery Community Fund are invested in helping civil society organisations to develop their resilience so that they are in a stronger position to pursue their goals.

One way of developing that strength is to build financial resilience through generating unrestricted income.  Social Investment – the offer of repayable finance for organisations delivering a social purpose, from an investor who is looking for both social and financial return – can help.  It is especially useful for civil society organisations who struggle to access high street loans and, for those who are looking for investors who share their values.

Social investment can also be structured so that it is useful for commissioners and civil society organisations who are working together on early action and innovation around complex social issues; it can help by covering costs until preventative outcomes have been achieved, which in turn release funds – that may otherwise be locked up in acute care services – to repay the social investors for the preventative intervention they have financed.Since the Fund’s work in social investment began in 2010 they have commissioned a number of evaluations and research studies.

These include some in-depth, long-term evaluations which will generate a number of reports between now and 2023. You will find the reports here: https://www.tnlcommunityfund.org.uk/insights/social-investment-publications