Purpose is what everyone's talking about on both sides of the pond - and, what's great is that it's not just sustainability or corporate responsibility professionals doing the talking, it's people from all across the business world. Just today, Jock Mendoza-Wilson, Director of International and Investor Relations at System Capital Management, posted a blog called Business with a Purpose from Davos.
So what exactly is meant by the term purpose? The way I would describe it is that a company's purpose says what an organisation does beyond generating profits; it expresses the value that the company brings to the world, what the company stands for, and, essentially, why the company should continue doing what it does. A good example is Coca Cola's purpose: "to refresh the world, to inspire moments of optimism and happiness, to create value and to make a difference". This statement demonstrates Coca Cola's commitment to doing more than selling a product to make a profit - in fact, the purpose immediately establishes 'creating value' and 'making a difference' as central to the business and therefore central to generating profits.
Establishing a purpose is beneficial for motivating and inspiring employees because it makes them feel good about what they do; it encourages suppliers to build sustainable business practices into the way they do business; it builds trust and loyalty among consumers because they can see the positive impact on their lives and the world around them; and, ultimately, it helps the business chart and stick to a course that is sustainable and generates both stakeholder and shareholder value. There's some interesting discussion of this in Salterbaxter's Directions Report 2012: Profits from Purpose.
Most of all, I believe that the real power of a purpose lies in its ability to unite people at all levels of an organisation and therefore help drive change. Whilst sustainability or corporate responsibility goals have - more often than not - divided individuals or departments within a company, a purpose helps unite them behind a common cause. Everyone understands what the purpose means and how it relates to the day-to-day business operations. What's more, it can add more depth to what a company does - opening up opportunities for employees to innovate and think about how they can adapt what they do to align with the purpose - from senior management to graduate trainees.
Over the years, one of the biggest challenges has been getting sustainable or responsible business to the top of the agenda, mostly because, unless there was a key sponsor among the top decision-makers, it's often been seen as something separate from the core activities of the business. I believe that the development of corporate purposes will help to change this - the right purpose will help drive understanding, inspire action and innovation and, ultimately, accelerate positive change.
Establishing a purpose is beneficial for motivating and inspiring employees because it makes them feel good about what they do; it encourages suppliers to build sustainable business practices into the way they do business; it builds trust and loyalty among consumers because they can see the positive impact on their lives and the world around them; and, ultimately, it helps the business chart and stick to a course that is sustainable and generates both stakeholder and shareholder value. There's some interesting discussion of this in Salterbaxter's Directions Report 2012: Profits from Purpose.
Most of all, I believe that the real power of a purpose lies in its ability to unite people at all levels of an organisation and therefore help drive change. Whilst sustainability or corporate responsibility goals have - more often than not - divided individuals or departments within a company, a purpose helps unite them behind a common cause. Everyone understands what the purpose means and how it relates to the day-to-day business operations. What's more, it can add more depth to what a company does - opening up opportunities for employees to innovate and think about how they can adapt what they do to align with the purpose - from senior management to graduate trainees.
Over the years, one of the biggest challenges has been getting sustainable or responsible business to the top of the agenda, mostly because, unless there was a key sponsor among the top decision-makers, it's often been seen as something separate from the core activities of the business. I believe that the development of corporate purposes will help to change this - the right purpose will help drive understanding, inspire action and innovation and, ultimately, accelerate positive change.
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