"Purpose-driven organisations far outperform traditional for-profit businesses."

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Andrew Hewitt is the founder of GameChangers500, which profiles the world’s top For-Benefit businesses that focus on maximising benefit to people and planet rather than an all-encompassing focus on profit. Andrew was led to the creation of the GameChangers500 list when he asks himself the question, "Why is it that we define success in business through lists like the Fortune 500 that rank organisations based on revenue alone?"

1. What does it mean to you when an organisation  redefines itself as a 'for benefit' organisation?

A for-benefit business is defined by two characteristics. First, they earn the majority of their revenue from business activity, as opposed to contributed sources such as donations and grants. Second, a social and/or environmental mission is their primary or exclusive purpose.

2. You believe in innovating to create positive change rather than building on existing foundations. How can we encourage organisations to totally re-define their existing approach?

Yes, as Einstein said “You can’t solve the greatest problems using the same type of thinking that created them.” Bolting on a CSR (corporate social responsibility) department to a traditional for-profit organisation isn’t going to solve the problems we face. It’s a solution within the profit-first paradigm which is why many CSR initiatives are focused on generating positive PR for the company rather than on what creates the most positive impact.

The for-benefit model of business is routed in a purpose-first paradigm whereby all business activity aligns with the objective of maximising benefit to people and the planet.

3. Being game-changing seems to be, at some level, about putting people first. How should a forward-thinking HR director tell the board that putting people first is the best course of action?

There is a clear business case for this decision. More than 70% of people consider an organisation's environmental and/or social impact when deciding where to work. 58% of millennials will take a 15% pay cut to work at an organisation that shares their values. By 2025 it’s estimated that millennials will make up 75% of the global work force. Businesses that don’t put people first can expect to have their “Kodak moment” sooner than later.

Further, a Net Impact study found that people who are able to make a social or environmental impact on the job are more satisfied by a 2:1 ratio. It’s not rocket science that giving people a sense of purpose is going to make them more committed to your organisation, more engaged at work, and more likely to put in an extra effort. Millennials are driving this change by avoiding the organisations that treat people more like human resources than like human beings.

4. What are the three biggest obstacles to organisations embracing purpose in their day-to-day operation?

  1. Purpose needs to be embraced and driven from the top. Is the CEO and board driving the purpose initiative? If not, it’s likely just talk.
  2. People are confused what purpose is. It’s not a statement, it’s a model of business that is better defined as "for-benefit”. For-benefit organisations are inherently purpose-driven as they use business to maximise benefit to people and the planet.
  3. Purpose needs measured. It’s one thing to have an eloquent sounding purpose statement, it’s another to measure if you’re efforts are helping you meet your mission. Developing effective indicators and impact measurements is a challenge many organisations face.

5. A lot of operation in purpose-driven businesses is doing the 'right' thing. How can this be reconciled with the need to provide shareholder value?

Doing good is good business. There are countless studies that show that organisations that are purpose-driven far outperform traditional for-profit businesses. The book Firms of Endearment is a good place to start, which is based on a 15-year study that proved purpose-driven organisations outperformed the S&P500 by a ratio of 14:1! There can be economic trade-offs in the short term, however in the long term purpose wins.

6. What's the first step to take to becoming a purpose-driven organisation?

Create a Theory of Change.

  1. Know what you stand for—your intended impact
  2. Devise a strategy to help you create this intended impact.
  3. Develop impact measurements to help guide you to stay on track. See an example.

7. How should individual workers re-define what they see as success in the workplace and in life?

Just as success in business is being redefined from a for-profit model to a for-benefit model, we as individuals are also redefining success.

The framework I like best is shifting from being “empowered by circumstances” to “empowered despite circumstances”. People who don’t rely on their external circumstances for fulfillment (status, money, stuff), become givers rather than getters.

They develop a resilience to challenge circumstances that enable them to outperform the average, and often become the game-changers that build the revolutionary companies that change the world.

About Andrew Hewitt

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26th May 2015 21:14

I love this article Andrew. Until we 'get' that people are not just robotic resources to make profits for a business - and to what end, employees will continue to respond accordingly? We need many more discussions about purpose - the point- of a business or indeed not for profit business where most of my work resides. And further more purpose of work and working with purpose will only take hold if we have purpose in our lives. We can't really switch on purpose at work if we are not living with it in our whole lives! Purpose goes deeper than outcomes and as you point out there is greater social and environmental responsibility involved and this engages workers far more than them being seen as a means to a profit end. People are our most valued resource and we profit only when this is understood and becomes the foundation of any business or not for profit purpose.

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to Bernadette Glass
27th May 2015 10:41

Thanks for your comment Bernadette - there definitely needs to be a shift in terms of how organisations view and treat their employees; it's all well and good talking about engagement, but if it's not a more deep-rooted thing as you say, it won't go very far!

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