Businesses around the world are redefining their role in society to foster business and societal success. They are adopting a “social purpose” to navigate turbulent times, and attract and engage top talent and customers. They are leading the way to Define a Social Purpose Business. This short paper is a summary of the Definition of a Social Purpose Business, as one component of a How-To Toolkit Series on the Social Purpose Business which the United Way of the Lower Mainland has commissioned to advance their Social Purpose Business Leadership Institute.
The Definition of a Social Purpose Business is the result of a global scan of the social purpose business landscape. The Definition of a Social Purpose Business reveals there are three elements of a social purpose business:
- Reason for Being: The purpose company has an enduring reason for being. It is clear and consistent about why its business exists, what it stands for and what it is about.
- Social Ambition: The second dimension of a social purpose company is one which has a social ambition.
- Profit Motive: The final consideration is the profit motive or model. Social purpose companies take different approaches to this question of profits, pursuing one of two profit models: 1) they see their social purpose as either beyond profitability and transcending profitability; or 2) as the route to profitability. In both cases the financial agenda is linked with the societal agenda.
For some, social purpose transcends maximizing profits and shareholder value, and for others it is how they create value and grow. Either way, profits are essential and a fundamental feature of the social purpose company.
The Definition of a Social Purpose Business defines what a social purpose is not and what it should be, and distinguishes it from mission, vision and values.
The Definition of a Social Purpose Business is summarized 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.
Also shown, is the Virtuous Circle of Social Value Creation. This visual demonstrates the value proposition for becoming a Social Purpose Company – revealing the drivers by which a company can create financial and social value through defining and scaling its social purpose.