"Purpose” is THE buzz word for businesses in 2019. Every strategist and social impact leader is talking about it. A google search alone for “purpose” yields articles about writing for purpose, defining purpose, strategies for purpose, how purpose will save the world, and even eating with purpose. Eating with purpose? Is that the same thing as mindful eating? Yikes… it’s a lot to follow.
When I wrote Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact last year, I wanted to shine a light on the purpose story that isn’t behind the headlines, though. I wanted to showcase why purpose is so critical for businesses wanting to make an impact, and why the most critical elements of purpose are imbedded deep within, behind the labels, behind the CEOs and behind the social impact reports. While some businesses may see finding purpose as a box to check off to stay relevant in 2019, others recognize that purpose equates to existence. Businesses that have purpose are businesses that have dedicated leaders sacrificing, innovating, taking risks, serving others and solving very challenging problems for the planet. Real purpose means real people. Real people doing really important work.
Take for example Shannon Keith, Founder of Sudara, an ethical clothing company that helps support women in India recently freed from the sex trade. Shannon started the company after feeling nearly powerless while visiting a red light district in India. She knew she had to do something. Shannon found her purpose in Sudara. Now she spends her days building a solid financial footing for women who were previously undermined and delegitimized. Shannon has brought identity back to so many who would have otherwise been forgotten. Sudara's purpose is Shannon's purpose. Behind her are the hundreds of women who now feel their own sense of purpose, as well.
The story of Pierrette Djemain, an entrepreneur who was born in Benin, was raised with eleven brothers and sisters, lost nearly everyone and everything, and found success growing moringa, is also what defines purpose. Starting a business with only 1,000 francs (about $2.00), Pierrette literally started from nothing but an idea. Now, her company Plantes Aromatiques des Collines (PAC) sells moringa to 25 different retail locations around Central Benin and employs women who face financial and personal challenges. Pierrette believes that she was put on this Earth to help those who have been disadvantaged by life. She sees opportunities to create sustainable and thriving futures for the vulnerable, (widows, orphans, forgotten women) by planting moringa trees, revitalizing the environment, and developing a value chain that provides entire families with a resilient source of income. These families have purpose. Pierrette found her purpose. The moringa tree has its purpose, too.
You can read more of these definitions of purpose in Purposeful Profits. Within the book are tales of individuals like Shannon and Pierrette, but there are also stories of individuals working for large companies, working to correct misgivings, to amplify positive solutions, and to try new things that can benefit all of humanity. Each of these individuals, and their companies, are what defines purpose. Behind each of us, no matter where we work, what we do or who we are, lies purpose.
As purpose takes on its own evolution in 2019, and as companies amplify their purpose, market their purpose, brand their purpose or indeed sell “purpose,” let’s not forget that it is the human effort, heart, brain and dedication that defines purpose in the end.
Mission, brand awareness, and staying innovative are critical for companies' abilities to thrive. Finding purpose, highlighting the triumphs from within and leading by inspiration are just as important.
Joanne Sonenshine is author of Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact (available May 22) and Founder of Connective Impact, a partnership advisory firm helping mission-driven companies scale their impact through collaboration.
While traveling with some of the most high-profile corporate leaders deep into their supply chain origins, I have always felt overwhelmed with emotion experiencing the moments of human interaction that take place. When business leaders are able to see with their own eyes who produces the products that makes the millions of dollars for their company, and the realities of the lives they live and struggles they often face, there has not been one moment where I haven't seen their empathy come through.
The realization is that there is something more than business happening.
Seeing the realities of the world around us transforms business leaders, and thus the businesses themselves, from exemplifying that the acquisition of money is a priority, to a place where decisions are made based on the impact of its dollars. With this evolution comes an entirely new approach to business.
The simple truth is that it should not be difficult to make choices for a company about doing the right thing, giving back to communities, or working to change the planet. Companies are making the shift at a rapid pace. Yet many still see businesses as out only to make money.
Therefore I wanted to share the 5 biggest myths about combining purpose and profit for any businesses contemplating whether there is in actuality a difference (can you tell I don't think there is?!)
1. Purpose doesn't resonate
Simon Sinek wrote a best selling book called "Start With Why." The book is about finding fulfillment and inspiration in our every day (including, and especially in our careers.) The book has found itself a massive cult following, and Sinek travels the world teaching business leaders how to find their 'Why.' People want purpose! No longer is a regular 9-5 job cutting it. Employees want to feel they are contributing to something bigger. Any company that doesn't recognize that, or starts building this employee drum beat into their business operations, just has its head in the sand. Purpose is here to stay.
According to Forbes' analysis on Cone Communications’ 2017 CSR Study, letting employees lead around social and environmental sustainability issues from within helps a company evolve into a true leader. This goes beyond being purely philanthropic…it’s identifying ways for company employees to feel vested in the future of the company and not just “what it stands for…but what it stands up for."
2. Purpose is the same as philanthropy
Being philanthropic is not the same as being a social impact, leader. If a company seeks to acheive some sort of social, environmental or economic development goal, philanthropy won't cut it alone. Those businesses that have truly ingrained purpose and mission into their way of operating are doing more than giving away money or time. They are learning slowly that changing their operations to address social impact challenges is pivotal to making the world better through their day-to-day business decision making, not just by writing a check. When companies recognize that there are other needs outside of the philanthropic domain for their active engagement, and they take ownership of their role to steer the ship in a direction of positive change, making the world a better place is not only possible, it’s inevitable. And guess what?! Companies are making money this way too!
3. Companies will stay profitable no matter their view on "purpose"
Companies must answer to many constituents: employees, customers, partners, shareholders, boards, etc. This puts pressure on companies to be almost everywhere at once and be everything to everyone. They must make good products, provide an excellent level of service, and also invest in employee engagement and internal operations, processes, etc. It’s no wonder that many companies scoff at the added responsibility and cost of investing in other programs around "purpose." The realization that many companies have made, however, is that these “outside” programs are way more than “nice to have.” They are indeed critical for many consumers that prioritize this level of commitment to issues other than making money. This is especially true of generations younger than mine. There are more articles and research studies than one could possibly read about the way Millennials and even younger generations make purchasing decisions. It’s undeniable that companies are responding to the trend in appealing to the smartphone generations that believe social goodness is integral. If they don't, there's no profit.
4. Bigger companies don't need to worry about purpose because they are already making so much money
Off the top of my head I can name six massive companies investing in social enterprises or socially-responsible, purpose-oriented brands, not just because it's the right thing to do, but because these brands are making (more) money from them. General Mills and Annies. Kelloggs and Kashi. Clorox and Burts Bees. I could go on. Companies recognize that to evolve and stay relevant, and to make an impact in a long-term, sustainable way, they must consider different types of models, like social enterprises or B Corps, as viable and necessary partners. The notion of purpose is evolving as new ways of doing business take into account the personal and professional impact of doing the right thing. Companies, and their leaders, want to invest in decision-making and innovative programs that have a long-term positive impact on the world around us. Newer business models, like the B Corp, make this possible.
5. Businesses are putting purpose before profit
Last year I was in Kenya for a convening of big brands and social enterprises. I was asked to facilitate a session with the big brands on partnership for social impact, and as I sometimes do in these scenarios, I led the 50 or so attendees in a “four corners” exercise where participants self select which corner of the room to stand in based on their response to: “What is the main role should business play in society?”
The answers were: (1) produce goods for consumption; (2) advocate for pro-business government policies; (3) inspire change in local communities; (4) invest in innovation.
These are tough questions for business execs to answer, especially those who work on social and environmental impact strategies for their companies. The conundrum of which answer to pick was intentional. The exercise encouraged the brand reps to truly think about what their role should be, even though many may believe their role is all of the above.
Which answer do you think everyone picked?
Of the 50 or so participants in the room, 49 traveled to the corner assigned to “produce goods for consumption.”
I asked several of the corporate execs participating to explain their answer. Generally, the rationale centered around the framing of the question: When you ask a company about its “main” role, it cannot deny that its main function is to produce goods (or services). That is why a business is a business (and not a charity, or government). When I pressed some of the attendees on the portion of the question that reads: “should play in society,” most agreed that at their core, businesses exist to provide a good or service in exchange for money. That is what makes their entity function.
A few did change their answers after we discussed what a business role in society looks like. That’s because while businesses exist to produce goods for consumption, they also exist for all of the other reasons we gave in our exercise. This may seem lofty, but it’s happening. The growth of social enterprise models is just one example of the recognition that making money and “doing good” are not mutually exclusive.
Joanne Sonenshine is Founder + CEO of Connective Impact and author of Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact, out May 22.
I saw a headline last week from Inc Magazine (which of course now I can’t find!) that asked if social enterprises were the new nonprofits. I paused to take a quick look at the article, because that is a question I’ve asked myself, and clients have been asking themselves, quite frequently. How is that question valid? Well, social enterprises exist to make money, but also to give back to society in some way, whether it be through environmental investment, one-for-one programs, social impact, infrastructure support or other ‘for the greater good’ reasons. Until recently, a lot of those ‘for the greater good’ services were provided by nonprofits, in many cases in partnership with companies or governments. Increasingly, though, as corporate social responsibility becomes more imbedded within how businesses function, companies are asking their nonprofit partners to tilt a little, and adjust their missions to be more business-centric. By partnering with social enterprises, however, companies are almost guaranteed that at least the most critical business basics are a given and understood, and long term impact can be built into a more formidable market system.
This evolution of partnering between companies (particularly big brands) and social enterprises is fascinating to me, and I wrote about this trend in Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact, out this May. (We will also visit this idea in our February webinar about partnering for impact for social enterprises.) In fact when writing this article I learned a out a new partnership that positions a big brand and social enterprise, once competitors, now as collaborators. Procter and Gamble has acquired women’s sanitary product company This is L. Companies like P&G (and General Mills, Kelloggs, Nestle and others) want to stay nimble and adaptive to changing consumer tastes and preferences. Companies like This is L, which is a B Corp, offers P&G a different angle to sell feminine products, one that is built on the messages of women’s empowerment, natural ingredients and purpose.
For companies trying to navigate this new world of niche collaboration (i.e. finding partners to explore new and evolving niche segments of consumers or other stakeholders,) we see the trends broken into the following categories:
We look forward to following these and other partnership trends as we determine how social enterprises and nonprofits function similarly, or different, in the space of social impact.
In Part 1 of 2019 Trends in Partnering, we shared the case for why partnering is critical for organizations prioritizing social impact and environmental sustainability. We also provided some examples of new and innovative types of partnerships. You can review the article here.
For Part 2, we will explore financing collaborations, and business-led partnerships that are looking at longer term impact.
Let's begin with innovative finance mechanisms that promote partnering for greater access.
Organizations that used to simply receive funds (think nonprofits) are becoming investors themselves. Companies are looking for higher returns on investment in the form of innovation, both to test new models for operating their businesses, and to test new technologies. Big picture challenges like MacArthur Foundation’s 100 & Change competition, which awarded $100 million to a set of partners advancing social missions (in this case bringing Sesame Street to Syrian refugees) will become more standard. This challenge was pivotal in the way it brought partners together to brainstorm creative ideas for that proposal process. It essentially forced collaboration to identify new ways to operate as a society.
Increasingly partnerships are geared towards making a serious shift in how we live, work and play. Google’s $25 million venture challenge around artificial intelligence to address societal challenges is one example. The proposal from Google indicates that collaboration for proposals is welcomed and even encouraged, especially between technical and social sector experts. This type of funding and program activity allows organizations to partner and test new types of engagements, like WeWork with the Tent Partnership for Refugees, which is testing out a refugee hiring model at all WeWork locations. Starbucks partnering with Arizona State University is another example of companies looking for collaborators to add value, in this case to their employees, by providing opportunities to attend college.
--- It’s all about testing new innovations, trying new things and pushing the envelope. The best way to do this is trying new approaches with partners, particularly unconventional ones.---
Crowdfunding will continue to be a popular avenue for financing, and partnerships between societal change actors and funding recipients will be critical to attracting new faces to crowdfunding platforms (of which there are many, and still more popping up daily!)
Government donors will want to rely on businesses to leverage public funding, so partnerships between civil society and businesses will be more and more attractive to financiers from the public and private sectors.
Additionally, the role of accelerators and incubators will continue to grow.
Projects are now about shifting communities out of poverty, or addressing systemic issues like those inherent in the Sustainable Development Goals. Partnerships are critical for any organization that is hoping to make a longer term impact local, or global.
NY Times Writer Anand Giridharadas wrote in his Best Selling Book, Winners Take All about the negative consequences of capitalism, and how institutions are failing us by relying so heavily on corporate titans and wealthy philanthropists to save the day. I don’t completely disagree with all of the points in his book (here is my review of the book), but truthfully we are so dependent on the private sector to partner with government, civil society, academic institutions and each other to solve many of the complicated problems that government alone cannot.
Take for example the (recent) government shutdown. At Yellowstone, where toilets overflowed and trash cans were overstuffed, Marriott Hotels' staff volunteered their time and also their hotels for other volunteers to help clean the parks.
Companies are stepping up and taking aims to ‘do their part.' There is more work to do, for sure, but partnerships are becoming the lynchpin for companies wanting to take a leadership role in affecting change politically, environmentally or socially.
Technology is evolving how we look at partnerships too. There was a period when governments, academics, civil society and companies thought finding technology partners was the be all and end all. With the onslaught of new technology making our work faster, more streamlined and connected, and the challenges some of the bigger tech companies have dealt with around privacy, access and data management, future partnerships in the technology space will likely come from smaller, more niche tech services. Bigger technology companies will need to consider the benefit they play in society to ameliorate the role they are playing as partners. The way we engage with our partners on social media, or through technology platforms, may shift as well, especially as these issues of privacy and data use continue to be in question.
As brands consider partnerships for the future, the role of consumer perception will be important. For some, staking consumer feedback and ensuring awareness building is a high priority. Tapping into buying behavior, supporting trends and other actions of the consumer will help you direct 2019 partnership goals accordingly.
Through 2019, partnerships will increasingly be about this notion of ‘what have you done for me, and the planet lately’. There’s a need to show impact of dollars and of time, both for internal employee engagement interests and to quell stakeholders outside of an organization's four walls. Being creative with partnerships is important, finding the most efficient use of resources and time to partner with the right partners (and not just for partnership sake) is even more so. Making sure the partnership story is told accurately and transparently is important. Look in all directions for partners. Whether it’s for funding or something else, consider that partners can come from all angles and be open to discussions, even with competitors, about what an effective partnership could look like.
2019 has already proven to be a pivotal year for the development of innovative partnerships, and we have no doubt the trend towards creative, unique and impactful partnership development will continue. As part of our Purposeful Profits through Partnership Webinar series, we launched with the year's first webinar exploring how these trends will evolve. You can download the transcript, or watch the recording here.
Before we talk about these trends, let’s quickly cover why an organization would want to partner in the first place. Let's consider some of the bigger challenges today's businesses, governments, civil society, academics, donors, and really all of us, face. Trying to conquer climate change, manage political instability, eliminate poverty, provide education for all and promote gender equity is not simple by any means. Creating goals around these issues requires serious investment and effort, and no single organization alone can solve these problems alone. Working together is paramount. Making our world a better place, whether that’s a primary goal of your organization or not, must involve partnering. These issues are just too complicated and sophisticated to address otherwise. What does that mean for this year specifically, and how can we use this year as a real stepping stone in advance of 2020, when many organizational goals come to fruition?
Let’s start with the concept of multi-dimensional partnerships. Whereas we have evolved from organizations and companies operating alone to advance their impact goals, to more of a partnership mindset, what we’ll see in 2019 is partnership frameworks that are multi-dimensional, have representation from different types of entities, and in some cases experiment with different types of partnering around a central point of similarity. Perhaps there’s a location-based issue that brings companies from different sectors together, or an issue that unconventional partners may need to address together. The more creative, and unusual, the better. Some of these partnerships will be driven by employee interests, some by customers. Much of the partnership development will be driven by either location needs (i.e. a community that is in need of support or a region where partnerships will help advance a certain social or environmental issue together) or by the issue itself (think big picture Sustainable Development Goals). These partnerships will be:
One element that impacts how partnerships are formed is funding. How and where nonprofits and other causes advance their missions, and how programs at the community level operate, are all dependent on funding. We’ve seen a shift away from typical cause-dependent philanthropy over the years, to more of a service-based model, whereby organizations must ‘sell’ their causes to funders. Corporate social responsibility is much more closely tied to business aims, and foundations are focusing more on specific issues than trying to be all and do all is also impacting this shift. Partnerships must take into account the mutual benefit of working together. How will programs be funded? Who aims to gain out of the partnership, and how can partnerships create more impact together hand in hand?
The rise of the social enterprise is making things a little more complicated as well. In some cases nonprofits and even bigger companies are competing with funding that traditionally was meant for startups as nonprofits and companies must stay relevant and innovative to show their societal impact.
Funding trends will be depending on:
One fast growing trend is the development of partnership between more mainstream brands and social enterprises. The dynamic and more nimble social enterprises, and more traditional companies, learn how to work together creatively in achieving and measuring impact. Inc. Magazine recently profiled General Mills, which purchased start-up and social enterprise EPIC Provisions, a meat- based snack company, known for processing its products in a way that is safe for the environment, and humane to animals in 2016. According to the article, one of the attractive features of the new snack company to stalwart General Mills was access to millennial customers. Despite some bumps in the road and the understandable growth pains (EPIC staying true to its original mission and General Mills adapting to some of EPIC’s practices in suit), EPIC has grown its revenues four times over, and is helping General Mills innovate and learn at the same time.
In order to find the right social enterprise, innovation partners, or idea generation, some companies have launched their own accelerator programs, or funds, hoping to tap into social entrepreneurial minds to engage on social and environmental issues in a more formidable way.
Some examples of the partnership evolution at bigger, more traditional brands include:
Next week we'll share part two of the 2019 Trends in Partnering. For more information, download the transcript or recording from January 22nd's webinar on this topic.