John Wood Talks: The Profitability of Purpose
If you’re sitting at your desk thinking, I wish I felt more fulfilled by my work, you’re not alone.
Gone are the days where the pursuit of possessions and material success reigned king. In a new era of digital empowerment, flexible career opportunities, and greater social awareness, caring is the new currency and it’s fueling a whole economy centered around helping people find meaning.
This is a paradigm shift of unprecedented proportions, and it’s not just driven by the millennials. Thanks to the growth of social media and the internet, people all over the world are experiencing a greater sense of awareness and ownership over their shared future. They know they have the ability to create impact on this planet and they want to be given the opportunity to, whether it’s through their profession or their purchases. This appetite for everyday philanthropy coupled with our profound desire to seize the moment (or #YOLO as most have come to know it) is propelling an exhilarating movement that has permeated every industry and ecosystem.
From our yearning to ‘make a difference’ in this world, to the rise of social entrepreneurship as a coveted career path, purpose is something that organisations are not only demanded to establish by their employees and customers, but expected to. Does that mean however, that profitability is any less important?
Fortunately not. Today, we can have our cake and eat it too.
In fact, the many businesses that have cottoned on to this fact have found themselves soaring to incredible heights of success. These are companies like Warby Parker, Ethos, Toms, etc., thriving organisations by any definition, yet driven by inspiring and tangible social missions. Rather than waiting for big corporates to take action, legions of empowered entrepreneurs are leading the way themselves, building innovative companies founded on transformative visions that their employees, partners and customers can rally around.
The convergence it’s here. It’s no longer either/or when it comes to profit and purpose, and there’s no one who states the case more convincingly than John Wood, the committed Founder of Room to Read and ex-senior executive at Microsoft. John is also in the process of writing his third book, precisely on this subject. Having been fortunate enough to hear some of his material through early presentations at Mettā, I believe the case that he makes is too compelling not to be reiterated.
Here are just a few of the many ways that purpose directly ties to company profit.
• Employee Acquisition — When it comes to getting a job, millennials aren’t checking their passions at the door. They want to bring their whole selves to work and feel good about what they spend 3/4 of their lives doing. 90% of millennials state a preference to be able to use their skills and connections in order to promote social good (TBD Source), whilst 70% of millennials are even asking about a firm’s social mission during their initial interview (TBD Source). With more people leading fragmented and self-directed careers than ever before, if companies want to hire right, purpose is no doubt the best talent magnet you can have in your arsenal.
• Employee Retention — Employee attrition is a costly prospect, both in terms of training and loss of IP. But employees today have options, and they will gravitate to those that bring them the greatest sense of satisfaction and fulfilment. According to a recent survey, employees who derive meaning and significance from their work are 3x much more likely to stay with their organisations (TBD Source). As a matter of fact, it’s not just about employee happiness, but also about their health and performance. Studies show that ‘people who articulate purpose live 8–10 years longer.’ (Dan Buettner, The Blue Zones Solution). There’s no doubt that people are looking for the meaning beyond the money — and this often comes in the form of self-actualisation and empowerment in the workplace. Companies unable to offer their employees this vision of growth and contribution to a greater good, both personally and professionally, will find themselves lagging behind their competitors.
• Customer Loyalty — Forget costly, extravagant marketing campaigns. Sharing an authentic purpose is a sure-fire way to garner the kind of customer engagement and loyalty that runs deep and lasts a lifetime. In today’s marketplace of limitless choices, purpose is the greatest differentiator a brand can have, as many consumers are choosing brands that align with their values, feeling satisfied in the knowledge that their money has gone towards a greater good. 42% of people have even admitted to boycotting a company’s products/services upon learning that it behaved irresponsibly. (TBD Source).
• Shareholder Value — Beyond the obvious emergence of impact investing (According to recent research from Morgan Stanley, 86% of millennial investors say they are “very interested” or “interested” in sustainable investing), many corporates are starting to realise that commercial success comes not from economic mechanisms, but from creating greater societal value. This was a particularly hot topic of discussion at the most recent World Economic Forum Annual Meeting in Davos, with global leaders of the largest corporations discussing the importance of connecting with customers on issues of global concern. As Mark Weinberger, CEO of EY stated, corporations have a responsibility ‘to focus on something larger than their bottom line.’ And this goes beyond the standard, obligatory CSR initiatives.
It all comes down to you
Ultimately, it comes down to the way you want to live your life. How do you want to feel when you wake up in the morning? What kind of legacy do you want to pass down to your children? How do you want to be known when you die? As John so eloquently summarizes, “No one was born to make money, but neither was your company.” The best part is that you are just one choice away from establishing that pathway of purpose, and it doesn’t require trekking to the mountains of Nepal to find it.
So how do you get started?
Firstly, establish purpose at the core — For a company to thrive today, it needs to have a meaningful reason for existence, one that informs every decision and direction it takes. This north star must be communicated clearly and continuously from the very top, fostering a culture of trust, camaraderie and shared mission. Since ideas can come from absolutely anywhere, it’s also important to keep the channels of communications open and flowing, encouraging everyone to add value and contribute to the success of the mission.
But if you haven’t, it’s not too late — For larger companies who may not have designed purpose into their DNA from the beginning, it’s never too late. Steering the culture in the right direction is still possible, but it begins with baby steps. It should also be democratic, with business leaders providing opportunities for employees at all levels, empowering them to become change agents and spreading the ethos and culture themselves across the organisation.
Finally, stay authentic and think long-term — What you don’t want to do is create a one-off marketing campaign that promotes an aura of purpose, only to pat yourself on the back thinking that it’s done and dusted. Consumers are not stupid and nor are your employees. If the change isn’t actually occurring from the inside out, it’s likely you’re wasting your time. The world has enough crappy companies, it’s up to us to build the great ones. At the end of the day, we can’t afford not to.