People, Planet and Profits – Why Entrepreneurs Must Find Their Purpose
The concept of an entrepreneur as a person who sets up a business with the simple aim of making a profit is out of date. Consumers want, more than ever, to have a connection with the brands that they buy. Creating that connection requires something more than just offering a great product or service.
Brands with purpose
Brands with a clear purpose and tangible values make a connection with their customer; purpose drives engagement and trust, it helps to differentiate brands in the marketplace, and it gives an organisation legitimacy.
Purpose-led businesses contribute to the communities within which they operate, they have consideration for the environment, strong ethics and are guided by a moral compass. They have corporate social responsibility (CSR) at their core.
The business benefits of CSR
This concept is no longer a ‘nice to have’, it’s good business. Organisations with a strong sense of corporate social responsibility have an engaged workforce, they are aligned with their stakeholders and can attract investors. In short, they have strong relationships and a positive reputation.
Entrepreneurs of today can, and arguably must, build brands that create more than just a financial return. Every start-up has the opportunity to embed values and purpose within its business model, creating a truly authentic brand story.
License to operate
Good corporate social responsibility practice hit the business headlines earlier this year when Larry Fink, the founder and chief executive of Black Rock, declared the firm’s commitment to corporate social responsibility, explaining: ‘Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.’
He said: ‘Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world?’
Profits, people, planet
The triple bottom line of profits, people and planet is firmly in the corporate spotlight, and clearly big business is on board with CSR. Microsoft has a whole department dedicated to philanthropy and its support of the third sector. P&G has local and global programmes in place, from mobile baby clinics to safe drinking water programmes. Lego currently tops the Reputation Institute’s annual reputation study which praises its partnership with the World Wildlife Fund, its ethical behaviour and the fact that it conducts business fairly and transparently.
It is easy to look at the generosity of the global corporate giants and dismiss CSR as being the prerogative of large, cash-rich companies and not for cash-strapped start-ups, but a business of any size can consider the three ‘Ps’ of the triple bottom line.
One for one
Entrepreneur Blake Mycoskie started his shoe brand, TOMS, in 2006 with a ‘one for one’ model that put corporate social responsibility at the heart of its business. The company’s strapline is ‘every purchase has a purpose’ and for every pair of shoes they sell, they give a pair to a child in need.
It has gone on to create huge revenues and profits that may not always impress Wall Street but prove that corporate social responsibility does pay.
Walk the walk
In an increasingly transparent world, how a company behaves, its corporate reputation, is more critical and more fragile than ever. Reputation is about walking the walk. It’s what you do, not what you say, it’s how the CEO behaves and the day-to-day decisions a business makes.
When a company’s values are out of sync with those of its audience, stakeholders, employees and the community, it will get called out. Reputations are built organically, ‘greenwash’ strategies or bolt-on sponsorships miss the point and will inevitably be an own goal for the company.
The role of PR professionals
Because of its role as ‘reputation guardian’, the PR professional is well-placed to assist with defining and defending corporate purpose. PR professionals provide advisory support to businesses at all stages of growth. If we are invited to help during the early stages of development, we can guide founders towards a business model that embeds CSR, creating an authentic brand story and a solid foundation from which to build its reputation.
Opportunity for entrepreneurs
Entrepreneurs who are building brands from scratch have the opportunity to put purpose and the people who can support it at the heart of their business. Global Entrepreneurship Week aims to inspire millions of people around the world to start or scale up their businesses; imagine the impact even a small proportion of those entrepreneurs would have, if they put an authentic purpose at their heart of their business?
If you would like advice regarding CSR for your business, please get in touch.