Just as the race to capitalise on technology shook every board room around the globe, the rise of ‘purpose’ is poised to be the next big disruptor.
It is increasingly clear that governments alone cannot solve the world’s most ‘wicked’ social and environmental problems (perhaps with the exception of New Zealand – because I’m not convinced there is much Prime Minister Ardern can’t do).
The not-for-profit and philanthropy sector is fighting the good fight, but it won’t be enough. In a capitalist society, there is only one driver, and to date there has been little incentive for the for-profit sector to join in.
If only businesses could make money out of doing good.
With every finger and toe crossed, I believe we are on the cusp of this reality. Of re-wiring the capitalist machine to be powered by purpose. Fuelling this hope is the shift in purchasing power that will see one of the biggest transfers in wealth from Baby Boomers to Millennials to the magnitude of $US24 Trillion.
Millennials have grown up in a world that the majority of our leaders are still trying to make sense of –whether it’s a result or bi-product of the digital world we live in, the expectation is now one of transparency and accountability, well beyond profit and economic measures. With a rising expectation that improving society is our shared purpose, and every government and corporation must demonstrate their commitment and role in helping to achieve it.
The companies (and governments) that meet these new expectations will be rewarded. But we have been warned, superficial attempts will be cut down and do more brand and commercial harm than good. The expectation is for true purpose delivery – driven by the CEO and lived at every level and every touch point of the organisation. Not just linked to performance but acting as its key enabler. Only when purpose is actively contributing and driving profitability will true shared value be created.
''When a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability'' Larry Fink, BlackRock CEO
Attracting and retaining the very best talent is clearly a driver for many early adopters of a purpose-driven strategy – and rightly so given the magnitude of employees who are demanding to see a purpose above profit (although I’d argue this is just one of the many positive by-products of genuine purpose and profit alignment). A true purpose driven approach is much more than a talent or marketing strategy, never a tagline or an antiquated concept of giving back. It promotes every business as playing a role that advances society. When your role is understood, your products and services can be designed to meet this higher order purpose. And now, imagine the social issues we could solve, if business models were developed in this way. But let’s be clear, this is not a socialist concept it is capitalism, because getting it right will drive higher demand and greater loyalty.
It’s not a far-fetched concept, it’s here now. All over the world, those companies and governments leading the way are reaping the rewards. Whatever you call it, the New Economy or the Wellbeing Economy, the Values Revolution, or the Double (or even Triple) bottom-line, in a world where consumers have more power than voters it’s not a matter of if, but when. Today there is certainly hefty brand kudos for those who get there faster. Tomorrow a failure to grasp success ‘beyond profit’ will not be forgiven.
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