Purposeful businesses understand how they can make the world a better place, and thrive themselves. We’ve already looked at how they benefit – with highly motivated staff, loyal customers and long-term value for shareholders. In part two of this special four-part series, let’s focus on how your business can bring ‘purpose’ to its culture, values and governance arrangements.
Across the private and not-for-profit sectors, businesses are under growing pressure to prove their long-term commitment to environmental, social or economic “purpose”. It means they are already having to look beyond shorter-term corporate social responsibility initiatives – aimed at ‘giving back’ – and focus on how they can operate, and behave, in a more sustainable way.
A backdrop of change
Two major international agreements with far-reaching consequences will further compel businesses to focus on purpose – the 2015 Paris Climate Change Agreement and the UN 2030 Sustainable Development Goals. Businesses have a critical role to play in both, and the influence of the UN 2030 goals only looks set to increase as we head towards that target date.
So while the importance of building sustainability into the core purpose of a business may be under-recognised now, we must all recognise that it will be a central focus for domestic and international policy makers – and global markets – in the years to come.
Meanwhile, the behaviour of consumers in our social media-savvy digital world also looks set to play an increasingly influential role in a business’s long-term success – or otherwise. Consumers are already demanding that businesses substantiate claims that they are sourcing responsibly, or adopting ethical practices, for example. And for businesses that fall short, the world of social media can be devastatingly cruel.
Steps to creating a purposeful business
If you haven’t already done so, we believe it’s vital to start preparing now to meet these significant challenges. There are huge positives, too, of course. If your business understands, communicates and – crucially – behaves in accordance with its purposes, trust in your brand will grow, giving you a competitive advantage.
Here are some sensible steps you can take now to help build purpose into your business:
- Adopt a clear strategy: Your purposes need to be closely aligned to your business to ensure they are genuine and can be consistently applied.
- Make purposes part of your decision-making framework: Include these principles in your articles of association or constitution, codes of conduct, and policies and procedures. By embedding purpose in this way, success is defined, and performance relating to achieving your business’s purposes is prioritised at Board level. B-Corps use their certification as a lever to investment, credibility, growth and recruitment.
- Engage with your people: Develop chosen staff members to be ‘sustainability leaders’ –those who demonstrate your company’s purposes in how they carry out their role and behave. This can help to embed a company-wide culture based on your purposes.
- Recruit carefully: Ensure your company’s purposes become part of your recruitment strategy, as well as your appointment processes.
- Invest wisely: Your business needs to invest in line with its purposes. Make these principles, such as supporting the local economy or making ethical investments, part of your procurement and investment decisions. Ethical investment is increasingly important for regulators. In fact, the Financial Conduct Authority (FCA) has produced a discussion paper highlighting how climate change and making ethical investment decisions can impact global economies.
- Explore new partnerships: Research opportunities to partner or collaborate with organisations that share your values. Working together to contribute to shared aims can make a greater impact, while often strengthening supply chains and helping you develop resilience in new markets.
In our next article we’ll look in more detail at the latest developments in government policy in this area and highlight some examples of purposeful business structures from a variety of sectors within domestic and international markets.
For advice on being a purposeful business, or on how to become employee owned, please contact Laurie Trounce or Christian Wilson on 01872 265100 or email email@example.com