Since Gordon Gekko coined the infamous expression, ‘Greed, for lack of a better word, is good’ in the 1987 movie “Wall Street”, an attitude that was blamed for the financial crisis 20 years later, the concept of building a business for the sole and exclusive purpose of making money leaves a bitter taste in the mouths of many. Yet in order to survive and grow, every business must be profitable, to provide fulfilment, creative stimulation, financial security and a sense of worth to founders, shareholders and employees alike.
Yet, profit is no longer enough.
In 2018 businesses are under pressure to maintain and improve the quality of their products, to innovate at speed to stay ahead of competitors, produce smart, authentic marketing that entices a new kind of customer whilst maintaining the same standards existing customers have come to expect. Ensure that people are inspired, motivated and working towards a common cause. To create a diverse culture that harnesses the very best talent, to make a political and environmental stand and ensure that the company has an evangelical spokesperson to articulate its ‘purpose.’
Purpose: “The reason for which something is done or created or for which something exists.”
Hijacking the English dictionary to suit our needs has become a rite of passage for many industries, not least the marketing industry. The consequence of the exploitation and repetition of words such as ‘influence’, ‘disruption’ and ‘purpose’ is that they quickly lose their real meaning and consequently their value.
A purpose is not a CSR policy, it is not a thinly veiled attempt to rewrap our products in order to sell more ‘things’ to more people. The purpose is the reason something exists.
Every year brings with it a new challenge, but as we career towards our exit from the European Union and face the reality of another term of President Trump, the challenges in 2019 are bigger and more complex that some of us have seen in our lifetime. It is my belief that businesses have a huge opportunity and arguably a responsibility to look after our planet for the next generation to make a stand against racism, sexism and make a stand for a diverse workforce. A purpose should be at the heart of any business, but does it drive profit? Should it?
In recent months we have seen numerous companies articulate their purpose. Few of us could have missed Nike’s 2018 advert featuring NFL star Colin Kaepernick, however, it does pose the question, did they make that advert to sell more trainers, to make more money, was it a case of very smart marketing or did they simply take a stand to publicly demonstrate their company purpose?
“Purpose Moves Us. Our purpose is to use the power of sport to move the world forward. We believe in a fair, sustainable future—one where everyone thrives on a healthy planet and level playing field.” Nike Purpose.
The subsequent increase in shareholder value could have been a very nice cherry on the cake, or it could have been a strategic move. Either way, arguably, it worked. Is it the responsibility of businesses such as Nike to make a stand, to use their influence to impact political change? Should this purpose really generate profit, or should it be intrinsic to how the business runs regardless of any financial impact?
Larry Fink, Chairman of BlackRock Investments wrote an open letter to the CEOs of all the companies the VC invests in.
“Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. It will remain exposed to activist campaigns that articulate a clearer goal, even if that goal serves only the shortest and narrowest of objectives. And ultimately, that company will provide subpar returns to the investors who depend on it to finance their retirement, home purchases, or higher education.”
Fink called on the companies to ensure their company strategy is not just one of financial success but to understand and articulate the societal impact of that business.
In the words of the great Bob Dylan, ‘Times, they are ‘a changin.’ Customers expect more. The ethical, environmental and political impact and position of your business is as important today as making money, but does it drive profit? Should it?
On the 14th May 2019, One Question asks this one question, does purpose really drive profit? One Question is designed to challenge the way we think about our every day and break down industry echo chambers by driving genuine discussion and debate about how we as people and businesses understand our purpose and the impact of this on our bottom line.
To find out more about One Question 2019 and become part of the conversation register your interest on our website. To join the agenda or inquire about partnerships email me at firstname.lastname@example.org
I very much look forward to seeing you in May.