Pitching purpose against profit is no longer worth the time. Many still use purpose as a marketing ploy, a tool to capture more market share. But when it’s authentic, purpose helps businesses outperform the market — growing three times faster than their competitors. Purpose-driven businesses actually want to make the world a better place, and today’s socially, ethically and environmentally responsible audiences have learned the difference. You have to be purpose-driven in your core business strategy, and the people you hire and partner with have to share your values.
It’s an exciting time. As the world’s top investors recognise the undeniable potential of purpose, we’re witnessing the rise of companies fostering innovation that benefits the future of humanity. Let’s take a look at what happens when money is not the target, but fuel for meaning.
Behind the buzzword
As the chief executive and cofounder of vegan food brand allplants, Jonathan Petrides (better known as JP) on Soldo’s video series ‘Dough Stories’ said that the goal of purpose-driven businesses is “to help make a healthier, kinder planet”. Ryan Kohn, cofounder of snack startup Proper, agrees. He says that, for Proper, doing business “the right way” among other things includes:
- A supply chain centred around environmental sustainability
- Avoiding ingredients with explicit environmental implications, like palm oil
- Partnerships with charities and Christmas lunches for the local community
Both founders also agree that providing the best possible experience for the people helping their business grow is key to achieving purpose. This is great news for the socially-conscious generation starting to join the workforce. Purpose-driven businesses are attracting top talent by offering them what they want the most: a positive work-life balance, a strong office culture and a sense of purpose. Both JP and Kohn highlighted the significance of the whole team owning part of the business.
The demand for purpose
It’s not surprising that the purpose-driven movement is winning the hearts of consumers. We’re finding that people are drawn to businesses that actively communicate their purpose. They prefer brands that stand for something bigger than just the products and services they offer — and thanks to social media, they’re more vocal about it than ever. Consumers are demanding transparency and insight into what goes on behind the scenes. They care about how companies treat their workers, and where and how their products are made. As a result, people are looking to buy from companies that stand up or advocate for issues that are meaningful to them.
This cultural shift hasn’t gone unnoticed by investors, who are also growing more interested in the world of purpose-driven companies.
“The people we want to be invested in our business have to believe in the same purpose. They have to buy into our everyday mentality” — Ryan Kohn
For JP and Kohn, it’s important that investors are in tune with their company’s goals. “The people we want to be invested in our business have to believe in the same purpose. They have to buy into our everyday mentality,” says Kohn. JP says that, when seeking investment, there was “no point in even talking” with investors not interested in the allplants mission.
How you can embrace purpose
Letting the world know your business is driven by purpose takes a lot more than putting up a mission statement on the company website. One of the ways for a business to express its commitment to sustainable business is to become a Certified B Corporation. This certification measures a company’s social and environmental performance. Getting it entails meeting very high transparency and accountability requirements. There are only about 3,200 B Corps around the world, including both allplants and Proper.
As cliché as it sounds, communication is key. Communication with employees — ensuring they all know the businesses’ purpose and are singing from the same hymn sheet — and communication with customers — not forgetting to let them know what’s going on with you and updating them on your progress towards the purpose.
When it’s authentic, purpose-driven businesses aren’t just making a difference, they’re booming and so they should be.
Carlo Gualandri is the founder and chief executive of Italian fintech Soldo. Find out more ways to manage your startup with Soldo here.