Purpose-led business – The crisis of capitalism and the unlikely solution
7 min read
19 March 2018
Serial entrepreneur Maurice Ostro advocates the concept of purpose-led business and explains why today’s business leaders must embrace its promise.
We live in a climate where faith in business and government is plummeting. Day after day newspapers report of big banks misleading customers, technology giants refusing to show full transparency and large corporates abusing public trust.
It comes as no surprise, therefore, to learn that 60 per cent of British people do not think that our current system is working for them, according to the 2017 Edelman Trust Barometer. Overall, there is little confidence in the institutions that govern our society and shape our future as well as their ability to “do the right thing”.
Yet despite this dismal outlook, the millennial perspective is one that has consistently stood out as ever-hopeful. A recent government survey showed that this altruistic demographic is more motivated than older generations by their ability to make a positive contribution to their society.
Purpose is at the heart of how millennials are viewing the world at large, and more people are aligning themselves with this mindset, from their everyday lives to their work ethic.
The 2015 Nielsen Global Corporate Sustainability Report found that 66 per cent of global consumers are willing to pay more for sustainable brands. Names like Lush Cosmetics and Ella’s Kitchen have been at the forefront of this conscientious shift for years. And among these like-minded consumers, millennials are leading the way with 73 per cent of them willing to pay extra for the purposeful brands making a difference.
But, while purpose is changing how we consume, it is also starting to impact our output. Millennials, especially, don’t just want to be playing a consumer role in these mission-driven brands but to become the driving force behind them.
A recent survey by PwC stated that 88 per cent of millennials want to work for a company whose values reflect their own. It doesn’t end there: 86 per cent of millennials would go further to say that they would consider leaving an employer whose levels of corporate responsibility no longer meets their expectations.
This research shows how young millennials are out there looking for personal fulfilment in their careers, and, are drastically reshaping the workplace as a result. This means employers can no longer afford simply to pay lip-service to important issues like sustainability, gender diversity and equality. They must actively tackle them.
What’s more, employees at a purpose-led business are up to three times more productive than the average workforce. Workers are far more enthusiastic and energetic when they know they are contributing to a bigger picture. And millennials are big-picture thinkers.
It is no longer enough for businesses to appear socially ethical on the surface, they must now internalise and incorporate this purpose-driven attitude if they want to appeal to this empowered millennial workforce.
A strong team ethos is the lifeblood of successful business. If you want to have a business that truly motivates its workforce, you have to work together under a common vision.
It is inevitable that shareholders and owners expect a return. But if an employee can go into the office every day and know that even a small percentage of their time and effort was going into socially good causes, what a powerful motivator that would be.
This is why Entrepreneurial Giving was created. It is a global movement for business leaders with a desire to make a difference, to learn from each other, to deliver value to society as well as their shareholders and balance sheet.
This level of motivation not only has the knock on effect of increasing the individual’s and the business’s productivity, it is also a vital piece in the wider productivity puzzle. If we start on a micro level, with the individuals who are at the heart of the UK’s economy, we will impact the macro – the bigger picture.
Millennials have set the example, now corporates must do the same. It is up to businesses to change and become more like the people they want working for them. They need to reflect the ethos they wish to attract and emanate.
However, the responsibility does not just fall on big businesses – startups and small businesses can also play a huge role in changing the way the system works. At Entrepreneurial Giving, we want to encourage the entrepreneurs of the future to embrace purpose and look for ways to embed it at the heart of their business models from the start.
Purpose needs to be at the very core of every business plan. We encourage our children to consider moral and ethical issues from an early age – businesses should not be exempt from this fundamental lesson.
If businesses, both big and small, continue to neglect this, things can and will get worse. Trust levels will continue to plummet and capitalism will continue to fall short of its potential to make a real difference.
We have a whole generation of change-makers hungry to make a real difference. It would be a travesty to ignore this opportunity to embrace the true power of purpose and help build a better economy.
Maurice Ostro is a serial entrepreneur, philanthropist and founder of Entrepreneurial Giving.