“There’s a principle in business”

In RB Week, Dave Hoare from BITC Cymru considers the purpose of business and how a Dr Seuss story may have had it wrong all along.

There's a principle in business, that everybody knows is sound; it says the people with the money make the world go around. So I’m biggering my company, I'm biggering my factory and my corporate sign. 

Sound familiar?

It’s from the catchy song from the animated film adaptation of Dr Seuss’ The Lorax; in which an entrepreneur (The Once-ler) pursues the growth of his business empire to the exclusion of all other concerns – particularly any societal or environmental concerns. The “principle” that he, The Once-ler, believes everyone subscribes to has not been the case for some time. So if this is not the principle in business; what is? What is the business of business?

The changed landscape for business

The world in which business operates has changed – and is continuing to change at an ever-increasing rate. The catalyst for much of this change, especially that which relates to the relationship between business, stakeholders, customers, suppliers, audiences, government and communities, can be tracked back to the economic crash of 2008. The shock to the heart of the system that was applied not only led to some regulatory and oversight changes, but that shock can now also be seen to underpin the changed relationship business has with its various audiences at all levels.

Supplemented by the huge growth in open-source data, the continued expansion of social media, the general accessibility of information and the technology to manipulate and understand it, this change (these changes) has required a response.

The response

In business, this response is reflected in the success of companies including Patagonia and their commitment to long-life products, Unilever and its Sustainable Living brands, GSK and the Open Lab initiative. In Wales this is embodied in brands like Hiut Denim and Nom Nom Chocolate – companies doing business in a different way and with different drivers.

The world has moved on from Milton Friedman’s assertion there is only one social responsibility of businesss – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game. In today’s world, more consumers and prospective employees want to buy from and work for companies which are going beyond simply increasing profits and spend their time and energy with organisations which are are actively doing good – and making a difference. 

“The business of business isn’t just about creating profits for shareholders – it’s also about improving the state of the world and driving stakeholder value.” (Marc Benioff, CEO, SalesForce)

However, this at times is a challenging intersection. A successful and sustainable (in commercial terms) business can also be responsible (in social, economic and environmental terms). Increasingly we see companies taking a truly sustainable approach – not only across their products and services, but also in terms of the actions they take to make a positive difference.

Companies can begin to reconcile these challenges by coalescing around a clear and identifiable purpose.

“All businesses should be explicit about their stated purpose, and about what they are, and are not, prepared to accept and do.” (Robert Phillips, Trust me PR is dead)

A clear and stated purpose will embody a powerful and clear relationship with stakeholders, employees and suppliers. Reports from GlobeScan (June 2016) shows that 65% of consumers want to support purposeful companies – but only 45% can name one. A clearly stated purpose, appropriately communicated, branded and positioned will help with this. A report from the Big Innovation Centre (BIC) suggests that if a “visionary purpose” was put at the heart of every British business an “additional £130mn a year could be added to the economy”. 

As easy as that?

Researching, consulting on, drafting and communicating the purpose of your business can be challenging. However, the BITC Purpose Toolkit sets out the ways business can work with Business in the Community to establish and embed their own purpose. Purpose driven brands are those which will last, sustain themselves and be around to make a difference to the challenges we face as a nation.

Start now and prove the Once-ler wrong.