Far from being simply the latest trend, discussions around the role of purpose in business are critical. The idea that companies exist solely to make money for shareholders, while externalities – the consequences of economic activity on third parties – can be ignored, is out-dated. A new story of global development is emerging.
There is a growing list of forward-thinking leaders who recognise business has an important role to play in society: to provide products and services that meet society’s needs; to provide fair returns to all who contribute to that end, and to respect the wider communities and resources that they need to operate. The invitation is open for more leaders to consider the kind of society in which they wish to live, the part their business will play in that society, and their own personal role.
To move thinking into action, the United Nations’ Sustainable Development Goals provide a powerful framework for addressing the most pressing needs of our generation through business with purpose. To do this successfully, business will need clarity of purpose, consistency of approach, and the ability to unleash creativity.
Purposeful business plays a significant role
The Sustainable Development Goals (SDGs or “Global Goals”) are an ambitious global agenda to improve life, in a sustainable way, for future generations by 2030. The Goals provide an essential framework for businesses to create meaningful social and environmental and economic value by addressing the most pressing issues society faces.
The 17 SDGs, and 169 associated targets cover critical global issues from elimination of hunger to development of sustainable cities and communities. Better Business Better World, the flagship report of the Business and Sustainable Development Commission, established to mobilise business around the SDGs, identifies 60 areas where business can play an essential role. These range from low-income food markets to mine rehabilitation, advanced genomics to cultural tourism. The Commission boldly suggests that achieving the Global Goals creates at least US$12 trillion in market opportunities.
It is here that the possibility arises to change the narrative around development. The old narrative tells us addressing poverty, environmental devastation and inequality is costly and can only be solved through philanthropy and government intervention. The new story – the one where purposeful businesses play a critical role – is one of engaging people across the globe in meaningful work and cross-sector partnerships that provide fair incomes through employment, reward investors and other contributors fairly, and enhance individual and community well-being on a thriving planet. Business leaders have the chance to choose to empower people and communities to become directly engaged in achieving the Goals and enhance their own well-being, in ways that make commercial sense.
Being part of the second story is exciting. Yet there are still major barriers to overcome in moving to purpose and playing a part in addressing Goals: leaders may perceive the risks of changing their organisations to be too great; investments in legacy businesses may be seen as too valuable, preventing transition; perhaps the Board, management and staff are not convinced that this is the right thing for business to be doing; perhaps the specific ways for a particular business to engage are not clear enough. Moving to a purposeful strategy that embraces the goals takes visionary leadership that inspires others to embrace new ideas as part of the new storyline, and to take decisive action.
The Business Commission suggests specific actions for businesses wishing to be part of the new story. These start with appointing a board member to act as a champion and holding a board session that looks at how to incorporate the SDGs to drive the right kind of growth, improve productivity and lower risks within the business. The next steps are to establish targets related to the Goals, collaborate with sector peers to enable sector transformations, look at aligning policy and regulatory positions to support delivery of the Goals, and link executive compensation to SDG-related corporate performance.
These are large-scale, transformative actions. In order to succeed, the context for this change must be an organisation’s own clearly defined purpose.
Three important reasons for a clear defined purpose
Clarity: Having a clear organisational purpose means being able to articulate the role your business plays in the world: why the business does what it does. The SDGs then provide a framework to consider how to put this purpose into action in a way that addresses the most pressing needs of society in a commercially sustainable manner. There is the possibility for iteration here: for organisations that are in the process of becoming clearer on their purpose, the Goals can be a way to consider where the existing business model intersects with major global issues – and their local impact. They provide a framework for considering where the company’s purpose lies so that it can be made explicit. Starting to address the Goals without clarifying this link runs the risk that well-intentioned steps to align the business with the Goals become diluted as they are not central to the business strategy and/or are perceived as, or relegated to, marginalised corporate responsibility or sustainability initiatives.
Consistency: Developing an authentic purpose within an organisation requires consideration of the core values and behaviours that the organisational culture inspires. It encourages reflection around the way that a business interacts with all its stakeholders – customers, suppliers, employees, local and national governments, partners, local communities, and the natural environment. The Global Goals are about ending poverty, protecting the planet and ensuring prosperity for all – the spirit of the Goals essentially ask us to examine the way that we all exist together on our planet. There is the possibility to set out to address one or more of the Goals through a certain aspect of the business without considering the organisational culture, or how embracing the full intent of the Goals might suggest other adjustments in the way the business operates. More exciting opportunities – for example through cross-sector partnerships – are likely to arise where a business is aligned more consistently with the spirit of the Goals. This can come by taking the necessary steps to embed a clear organisational purpose into which specific Goals then fit.
Creativity: There is a strong body of evidence that having a clear corporate purpose motivates employees and that this results in better business performance. Identifying the right Goals for your business to address, and how to do so, is likely to require collaboration and innovation right across a business. Embedding a clear purpose, expertly communicating this within the organisation and identifying how addressing the Goals fits with this purpose has the power to break open silos, encourage different ways of thinking, and generate the creativity that will enable businesses to contribute to rapid progress towards the Goals. This goes beyond aligning executive compensation with achievement of certain SDG-related targets, instead, it is about enabling all staff to clearly see how they are contributing to an organisation that has a clear sense of why and how what it does is creating a better world for all. This unlocks the possibility to radically change expectations of success and to unleash much greater potential within an organisation.
Purpose as fundament for value creation
Forward-thinking businesses will engage with the Goals to create and capture value in light of their own clear organisational purpose. They will align internal culture and external strategy, allowing employees to unleash their full potential for creativity and radically shift expectations of success.
The invitation to participate in the new story is open. Is the purpose of your business clear? What part will you play in creating a world without poverty, protecting the planet, and ensuring prosperity for all?
Ruth Dobson works with leaders to gain clarity on their organisation’s reason for being in the world and build sustainable organisations that serve society and respect the environment.
Full details of the Sustainable Development Goals including the 17 individual Goals and the 169 associated targets can be found on the UN’s website: http://www.un.org/sustainabledevelopment/sustainable-development-goals/
The Business and Sustainable Development Commission brings together visionary leaders from the private and public sectors as well as civil society to consider how business can play a role in delivering on the Global Goals. http://businesscommission.org/