What is a Successful Purpose Driven Business(no nonsense)
As the best of both worlds: the nurture of meaning coupled with the excitement of business. Entrepreneurs and business leaders often search for reasons to embrace this approach. They seek managerial clarity on how to define and communicate it to their employees or in their marketing without useless corporate jargon and purpose-washing. Let’s break it down. 5 min read.
Table of Contents
The true definition
of “Purpose Driven Business” (no nonsense)
Purpose-led, Mission-Driven, Purpose-Driven. These are all words we heard of. At the end of the day, they are devoid of meaning if we just throw them around at every occasion.
The ambition to go beyond profit, embracing environmental and social impact as the main goal.
From a psychological perspective, purpose involves intention, consciousness, creativity, and expression. It’s about understanding our origins and maximizing our well-being. Essentially, it’s about knowing our “Why.” But how can our “Why” apply to a concept as broad as business?
The most widespread definition of a purpose driven business is the ambition to go beyond profit, focusing on environmental and social impact as the main goal. Still sounds like corporate jargon? I get it. How can we make it clear that purpose driven companies are more than just money-making machines? To do this, we must delve into the root of the “Why”.
A truly purpose-driven company is one by design. To be authentic in an inauthentic world, merely stating you have a purpose isn’t enough. Your business model, product, and service must create value independently, without the need to constantly restate the purpose.
We can separate purpose-driven businesses into several types:
- Impact Start-Ups: Newly founded companies aiming to solve major societal problems.
- Purpose-Driven SMEs: Small and medium-sized enterprises that profoundly impact their local communities, often without the recognition they deserve.
- NGOs: when profit is fully excluded to let purpose flourish but self-sufficiency of business is lacking
- Big Social Enterprise: Although they lack an official name, these companies have scaled to multinational success by prioritizing the planet and people above profits.
Why are purpose-driven companies so important ?
Business is often seen as the cause of many vices, with companies like Total Energies destroying the environment and Nestlé allegedly poisoning our food. If we blindly accept this view, it seems companies driven by greed and malice will take over, leaving humanity in a dark place.
However, there is hope for more conscious capitalism. Some businesses are reversing the money-driven madness to show that prioritizing social and environmental goals over profits is possible. You name it, these are commonly known as mission-driven or purpose driven companies.
Purpose-driven businesses are experiencing stellar growth. A major UN report in 2017 highlighted $12 trillion in business opportunities and 380 million jobs linked to meeting the SDGs, but emphasized these will not be realized through business as usual. We might have to reconsider what the next business revolution will be: Artificial Intelligence or Purpose-Driven Companies?
Another indication of this trend is how entire industries are adapting, though some companies mistakenly (courageously?) fall into the trap of greenwashing or social washing to appeal to the growing number of purpose-seeking consumers. A Forbes study mentions consumers are four times more likely to buy from purpose-driven brands.
Authentic Principles of Purpose-Driven Businesses
At the core of appealing to consumers is authenticity. Purpose-driven businesses thrive on genuine principles, ensuring their mission aligns with their impact. Here are the fundamental values to remember:
Transparency & Accountability: These businesses prioritize open communication and strict responsibility to customers and suppliers.
Clear Mission Integration: They embed the company’s purpose in every aspect of operations and communication.
Long-Term Sustainable Performance: They strive for sustainable growth and impact that benefits society and the environment, welcoming public scrutiny to ensure alignment between stated purpose and actual performance. Some companies even don’t pay dividends to their owners.
In 2019, French law introduced the concept of “société à mission,” holding companies accountable to both profit and societal objectives. This legislation mandates enhanced transparency and independent audits of societal objectives and progress.
Similarly, B Corp Certification signifies a business meeting rigorous standards of performance, accountability, and transparency across various areas, from employee benefits to supply chain practices. Purpose driven companies with a B Corp certification usually benefit from great credibility, although they concern mostly the big social enterprises.
Examples of Purpose-Driven Success Stories
Speaking of France, the country leads as a true leader in the purpose-driven movement, with companies so successful you can hardly miss them.
Too Good to Go: the warrior of food waste
Given their impact report: In 2023, 121,686,720 meals were saved from distributing the food businesses’ surplus of waste to citizens at mark downed price. Saving the equivalent of 328,554 tonnes CO2e from entering the Earth’s atmosphere.
Back Market: pioneer in circular tech economy.
A wicked problem that has been long stranded for years in electronic waste and that company brought refurbished electronics as the new standard. Back Market recently announced that it has avoided 314,177 tons of CO2e in 2022. Even more, 1 in 4 people in France have purchased their phone and they expanded in most European countries and the USA.
BlaBlaCar: The company with the most impressive social impact
Who doesn’t know the famous carpooling app? Highly impactful on the social side this time, 1.5 million tonnes of CO2 avoided and 90 million human connections were made all in 2022. Coming from nowhere at first, their visionary founder saw a social need so strong it just had to grow.
Just imagine a world where all businesses are like that. Some will say it is a utopia, but I like utopias, it’s a way to strive to. There is always a creative way to make an impact.
Building Your Purpose-Driven Business Strategy
Defining Your Purpose: Uncover core values, societal needs, and areas of impact alignment. Find the “why” for your company.
Integration into Business Operations: Try to integrate purpose into all aspects of the business, from product development and marketing to supply chain management and corporate governance. Common business models include circular economy, sharing economy, and regenerative enterprise.
Integration into Purpose-Driven Marketing: Every step of marketing needs to be thoroughly strategized to fit the values and purpose of your customers. This starts notably with an appealing website and an efficient SEO strategy.
Conclusion
Purpose-Driven companies are far from perfect, but offer our best compromise of economic stability with structural impact. They build trust with consumers, communities, and suppliers; attract and retain employees; and draw purpose driven investors. As they are required to undergo the verification process every three years in order to recertify, B Corps are by definition also focused on continuous improvement, leading to their long-term resiliency.
Sources:
Martela, F., & Steger, M. F. (2016). The three meanings of meaning in life: Distinguishing coherence, purpose, and significance. The Journal of Positive Psychology, 11(5), 531–545. https://doi.org/10.1080/17439760.2015.1137623
BETTER BUSINESS, BETTER WORLD. (2017). https://sustainabledevelopment.un.org/content/documents/2399BetterBusinessBetterWorld.pdf
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