Why are you in business? To make money, right?
For some leaders, it’s not that simple anymore.
Russ Stoddard describes himself as “founder and president of Oliver Russell, a public benefit corporation that builds brands for purpose-driven companies whose products, services or business models benefit society.” In that statement, he offers several key nuggets from his new book, “Rise Up: How to Build a Socially Conscious Business.” It’s available in an “early edition” at russstoddard.com. The book has several interesting points that I’ll talk about over the coming weeks, but today, let’s start with purpose.
Stoddard argues that it’s not enough for organizations to have a mission or vision statement. More important is a purpose statement. That’s because stakeholders — whether customers, employees and others — increasingly want to interact with firms that do something good, beyond just making money.
Rather than working “for a paycheck,” which was more common a few decades ago, Stoddard says many people, especially entrepreneurs, work because of the passion and meaning they gain. As one local entrepreneur puts it, “I GET to do this work. I don’t HAVE to do it.” Also, Stoddard sees more leaders using the notion of purpose as a way to gain competitive advantage. Buying clothes from Patagonia assures great quality but for many people, it also supports an organization that respects the natural environment.
So what is “purpose?”
While mission statements tend to be “inward facing,” giving employees a sense of business strategy and direction, purpose statements have a different focal point. According to Stoddard, purpose statements explain the reason or the “why” an organization does what it does, with a focus on looking outward. In particular, they explain how an organization will “make a difference in the lives of stakeholders.”
He uses Patagonia’s statement as an example:
“Build the best product, cause no unnecessary harm, use the business to inspire and implement solutions to the environmental crisis.”
A well-written statement can inspire employees, and potential employees, as well.
Stoddard writes that on average, at least daily, someone contacts him about working at his firm. The person typically does not ask about specific jobs but instead says she or he is “inspired by the company.”
As a professor, I can confirm his experience from the other side. Students frequently ask about some of the companies in town that inspire them—how could they get in, find out more, or perhaps work there in the future. Wouldn’t you love to hear people say, “I’m so lucky. I GET to work at my firm.”
So, once again, why are you in business, really?