Does your organization have a reason for being? This is not only a philosophical question, but a business imperative. Tim Brown, chief executive officer (CEO) and president of the innovation and design firm IDEO, believes that only businesses with a clear purpose will be innovative and truly sustainable in the future. Purpose in business is about embedding a shared philosophy into the DNA of an organization -- one that is both the driver and the sustaining force for its success. Here are four reasons why your business needs a purpose:
There's more than one 'p' that matters
In the past, profit and shareholder value dominated the corporate agenda. Now, savvy organizations are putting "people and planet" alongside profit at the very core of how they do business. Havas Media found that "meaningful brands," brands that improve the wellbeing of people's lives in a tangible, significant and fulfilling way, have enjoyed better financial returns than top hedge funds. Outdoor clothing company Patagonia, are just one example of this, their famous 2011 sustainability campaign, telling customers not to buy their jackets, resulted in a sales growth of almost 40% over the next two years.
There are no more secrets
Companies that don't see the opportunity in changing the way they do business, or realize the power of consumers, are likely to be left behind. Increased transparency about business practice -- brought about by social media and campaigning sites such as SumOfUs and Change.org -- means consumers, like future employees, are better informed than ever before about corporations and their business practices. As Dr. Mo Ibrahim, founder of telecommunications giant Celtel International and member of sustainable business organization the B Team, commented at the launch of the B Team: "If we're all naked, we had better look good."
Work out or lose out
More and more people are leaving corporate jobs to search for greater meaning and impact at work. In the UK, organizations such as On Purpose help talented professionals move from accountancy, investment banking, law, strategy consulting and other sectors into roles with social enterprises. Similarly, Escape the City helps people who want to "do something different" find new career opportunities that feel more "purpose-oriented". This suggests that to attract, retain and get the best out of top talent, purpose-led organizations will need to make a positive social impact -- and make sure their employees feel actively part of it.
Lead for the long run
We are witnessing an increasing shift towards "long-term capitalism" and a move away from quarterly profit reporting. In 2009, Unilever, under CEO and B Team member Paul Polman, dropped quarterly reporting and launched an ambitious growth plan. A longer-term approach is likely to favor purpose-driven organizations, giving them the time and space to flourish. As Polman explained in an article about capitalism for Mckinsey, if profit and quarterly reporting is no longer the primary business driver, organizations can radically reframe management incentives for the long term, and invest heavily in research and development and innovation.
The B Team and Virgin Unite created a report onNew Ways of Workingto help organizations better understand changes to the world of work, listen to the needs of employees and create environments that help them thrive."Create Thriving Communities" is one of the 10 challenges of the B Team.