It is notoriously difficult for firms to balance financial goals and social responsibility.
Traditionally businesses were ultimately responsible to their shareholders with the role of the consumer or client only being important in so much as their tastes and opinions affected their sales. Public opinion was relatively easily controlled through marketing and media relations and any unsavory business activity was outsourced or sent off-shore where it could be more easily hidden from prying eyes.
But the big question is: how can your business reduce this risk while at the same time satisfying shareholders? The answer lies in making your business purpose-driven, and the first step is to evaluate your organisation’s current purpose.William Bill Damon defines purpose as “a long-term, forward-looking intention to accomplish aims that are both meaningful to the self and of consequence to the world beyond the self”.
Unfortunately businesses often have a tendency to make the achievement of goals — their performance objective — the ultimate purpose of their business, and this is where they fall short. If you can’t answer why your company is important to both business and society at large, there is little bonding you to your employees, customers and shareholders.
Critically, being a purpose-driven company is as much about protecting your bottom line as it is about growing it. Studies show that employees in purpose-driven businesses find greater meaning in their work, are more engaged, and are five times more likely to stay in their current job. From a consumer perspective, purpose-driven businesses are perceived to be more authentic and more caring, and as a result, consumers are more loyal to them.
Leadership plays a huge role in achieving this. A purpose-driven business requires its leaders to show commitment to their purpose. This means conducting your business in a way that is both personally and socially beneficial and acting in a way that is personally meaningful.