Coro’s Blog: On Purpose
Profit with Purpose New Way to Do Business
Published on December 15, 2017
“I had never heard of social purpose before, but it intrigued me. After learning about it, I was convinced and drafted a social purpose for my business.”
This quote is from a business leader who recently attended a social purpose workshop hosted by the United Way of the Lower Mainland (aka Greater Vancouver), as part of its new social purpose business series.
With this action, the leader joined a growing number of businesses around the globe that are redefining their role in society: they are looking beyond generating economic value to creating social value as well. Rather than standing on the sidelines, these companies shift from passive bystanders to playing an active role in sustaining the communities they serve. (See separate box at end of article for some examples of social purpose statements.)
For some, social purpose transcends maximizing profits and shareholder value, and for others it is how they create value and grow. Either way, they recognize that the revenue-generating side of the business and the social impact side can co-exist and in so doing, generate greater impact than if each was treated as separate and distinct.
The United Way defines A Social Purpose Business as “a company whose enduring reason for being is to create a better world. It is an engine for good, creating social benefits by the very act of conducting business. Its growth is a positive force in society.”
Three fundamental dimensions drive the social purpose business:
- It has a reason for being. It knows why the business exists and what it stands for.
- This reason for being is infused with a social ambition. A social purpose company has a humanitarian quest or north star.
- Its profit motive links to its societal agenda. Social purpose companies pursue one of two profit models: 1) it sees its social purpose as either beyond profitability and transcending profitability; or 2) as the route to profitability.
The graphic below depicts the business model that drives the social purpose firm. With social purpose as the engine fuelling the cycle’s iteration, the company can grow for good. Through eliminating its social harms, it can reduce its costs and risks. By focusing on its social purpose, a business drives social innovation, leading to the next level of action and impact for business and society, so that it generates a virtuous cycle between business performance and community impact. The business does good – that drives business results – which in turn, allows it to do yet more good.
When companies look past the balance sheet and base decision-making on purpose, they become part of a growing number of savvy companies that are redefining how to run a 21st century business.
For more on the social purpose business case, check out this United Way commissioned research: Social Purpose Business Case.
Companies you’ve heard of and some you haven’t (yet) have boldly articulated their commitment to being a social purpose business. If you’re wondering what a social purpose statement looks and sounds like, check out these very public commitments made by game-changing companies around the world.