There used to be a time when profit was the only driving force for a business; as corporations would try to squeeze every bit of profitability out of operations, regardless of the impact it had on the community or the world. The internet has made mass communication so much easier and a lot more transparent. If we want to know about a business’ products or practices all we need to do is Google them and see what ratings their products or services received and what feedback people have given the Company. Anyone with a cell phone and internet access has a voice and can become an influencer. As a result, it becomes exceedingly more important to build a network of advocates as opposed to critics. This has led to a dramatic shift, as consumers now look to understand which companies are making a difference and not just making a profit. As a result, more companies are measuring their results not just based upon their bottom line, but also on the impact of the purpose that they have undertaken.
Comprising over 50% of the workplace by 2020, Millennials are leading the charge in this new mindset. With endless data at their fingertips, Millenials are leveraging their knowledge about what’s going on in the world, and supporting corporations that are philanthropy driven. What they are saying is that they want corporate America to be part of the solution of curing societal problems and not adding to them. Those companies that have taken on the challenge, have been rewarded. Understand, this is not just a company running a campaign, making an annual donation, or having a volunteer day; it’s hardcoding the desire to make a difference right into their corporate DNA.
What does adding purpose to your mission look like? There are many models, but here are a few examples:
- Tom’s Shoes – Donates a pair of shoes to a third world country for each pair of shoes they sell. This isn’t for a period of time; it is not linked to profitability, it is a simple concept … one for one, forever, with no limits.
- Elara Food Service – A Long Island supplier of plastics (gloves and bags) to the food industry adopted a one case/one meal program. For every case of product they sell, Elara donates a meal to Island Harvest.
- Revolution Foods – Understanding that children require high quality foods, free of high-fructose corn syrup and other unhealthy ingredients. Revolution Foods serves good tasting, nutritious food to children within school districts in several states at the same pricing as the current school menus.
All of these companies have been rewarded with increased sales and publicity.
What are some of the key advantages of becoming an organization that considers both profit and purpose?
- The ability to connect with your customers, potential customers, and supply chain in a way that is focused not just on a business relationship, but instead becomes more value driven. This type of relationship transcends business and keeps customers coming back for more and providing referrals.
- Increased social media activity, as your customers will become advocates as purpose tends to receive a lot of positive feedback within social media circles, especially if there is a direct link between customer purchases and support.
- Increased staff motivation as employees tend to feel good about working for a company that has a purpose-driven component to its mission.
- Increased positive opinion regarding your company from the community and regulators. This could reduce the level of criticism/oversight of your business.
Purpose and profit do not need to be mutually exclusive. Purpose can be utilized as an effective vehicle to generate goodwill, enhanced referrals, increased buzz from your customers and influencers, more engagement, and ultimately increased profitability. Even so, purpose is not the silver bullet, you still need to ensure that the quality of your product and services as well as your pricing are appropriate, but purpose should provide a competitive advantage to those business that have embraced purpose within their corporate DNA.