Businesses have long held on to profit as the core of its operations. But over the past couple of decades, there have been many organizations that have decided to no longer focus solely on how they will generate economic value.
The thought leaders behind these organizations call it a purpose-driven business. But what exactly does that mean?
Although a purpose-driven business may sound like the antithesis to a profit-driven one, it’s not necessarily so. The latter still works towards earning a profit, but instead of channeling a bulk of the profit to a select-few, it gives it back to a cause, its people, or the community.
On the surface, this type of business may seem like its sole goal is to give away its profits. But it’s far deeper and far-reaching than that. As the name implies, a purpose-driven organization has a clear purpose, and that is to help make the world a better place and operate in a way that’s not harmful to people and the planet.
So how does one build a purpose-driven business? Take a look at what some of the best companies in this category have in common:
A Clear Mission and Vision
Regardless of the niche or industry, purpose-driven businesses have a clear mission and vision that aren’t necessarily linked to their product or service. For example, a laser etching for stainless steel provider that donates half of its profits to a local animal shelter, or a factory that only employs persons with disabilities. Some companies would be more ambitious and go so far as lobbying for more environmentally-friendly business practices or supporting a wide range of causes, from conservation, gender equity, and education. Whatever the purpose is, it’s important to set a mission and vision from the get-go that are 100 percent clear to everyone.
Inclusive Hiring Practices
In a purpose-driven company, it’s common to see a diverse group of people behind the scenes. That means that employees and leaders come from all walks of life and hiring practices seek to eradicate biases toward gender, age, race, nationality, religious belief, and so on.
Company policies would also have ample provisions to protect everyone from any form of discrimination. It would be rare to find a strict hierarchy and wide pay gap among employees. The goal is to achieve genuine equity and maximum employee satisfaction. Regardless of the purpose, this type of company puts its people at the core, as this strategy has been proven to lead to successful outcomes.
Leaders Who Embody the Purpose
Leaders of a purpose-driven company are expected to walk the talk, as it’s the most effective way to get everyone’s buy-in. For instance, if a company champions ecologically-sound choices, its leaders would be expected to adopt a simpler lifestyle, take public transportation or bike to work instead of driving a car, and so on.
More often than not, the purpose is the founder’s vision and is anchored on their personal belief system. And that plays a big role in the success and impact of a purpose-driven company. It’s also common for a purpose-driven business leader to become an active spokesperson of the mission, as opposed to being an omnipresent figurehead people rarely see or interact with.
A Team Invested in the Purpose
A purpose-driven company treats employees as partners. As a result, employees become more invested in the organization’s mission and vision. It’s unlike traditional companies where employees often feel detached or indifferent towards the organization’s goals since they’re unable to see their role in the bigger picture.
But with a purpose-driven company, employees are the ones moving goals and objectives forward and have a direct role in how the company operates and evolves. Thus, an employee with a genuine belief in the mission is more likely to stay and treat the company as her own. More importantly, each employee has a voice in the company, and her opinions and recommendations are heard without prejudice.
Embedded in the Community
A purpose-driven company would seek to not exist in a vacuum. Instead, it builds connections with the community and other organizations with a similar mission. This is what sets a true purpose-driven business apart from the ones that donate to charity to reduce tax bills or greenwash products to deceive consumers.
This type of business would often give community members an active role in its operations, be it as employees, consultants, or partners. Some would share a percentage of the profit to community causes or initiatives.
The number of purpose-driven companies is continuously growing, all thanks to pioneers who are leading by example and making their message loud and clear. If you’re looking to join the movement and be one of the changemakers, be sure to include these fundamentals to your business model.