With the launch of the Government’s Mission Led Business Review at the end of last year, businesses came into 2017 with one big question on their minds – why? Six months into the year, Virgin StartUp Ambassador and Coconut Chilli founder, Navina Bartlett explores how brands that pit profit against purpose risk losing out in the new business world.
What does your business stand for? Perhaps a more accurate question would be – why do you run the business you do?
Running a business can be tough. The long nights, crappy pay (at least in the beginning), and constant pressure can all take their toll, but only if you stop to think about the ‘why’. It might sound a bit out there for business thinking, but what’s your higher purpose?
Coconut Chilli started out of a desire to change the way the food industry operates at scale. The drive for profits and efficiencies in the global food supply chain means ‘food fraud’ is taking place on a daily basis and workers are being exploited. My true passion is using Coconut Chilli to challenge conventional food manufacturing and as a vehicle for change in a bid to create sustainable food systems around the world. That’s my ‘why’.
It’s so ingrained into the company culture that we’re eschewing the traditional route of scaling a food startup – namely retail – and selling online directly to office-based customers. The plan is to grow as a B-Corp – a for-profit business that has social and/or environmental outcomes as part of its mission.
At startup companies like mine, we’re all about the ‘why’ as opposed to the ‘what’ – wanting to make the world a better place, changing people’s lives through technology, or in my case, revolutionising the food industry. Whatever yours is, it’s a more powerful tool than perhaps you realise when it comes to attracting and, crucially, retaining customers.
It’s not just customers having a purpose is attractive to – it’s also an important consideration for potential team members. Company culture is a big thing in the startup world, but that doesn’t mean sitting around in your office ball pit wearing hoodies to meetings and playing ping pong tournaments a lunchtime! Sharing your purpose for the business with team members means they can buy into your vision and use it to help them do their jobs to the best of their ability. Don’t underestimate just how much believing in your purpose rather than your profit can motivate your team to do great things.
It’s also a good tool when hiring – ask yourself, is this person sitting in front of me driven by money in their career, or do they believe in making the world a better place/leaving their mark/changing the status quo etc.? Hiring slow to get someone on board who really gets what it is you’re trying to achieve makes for an amazing celebration partner during the good times, and a solid support system during the difficult ones. People driven solely by monetary rewards are unlikely to stick around if things take longer to get off the ground than people who truly believe in what it is you’re doing.
Of course, we’re always going to have an eye on profit – businesses don’t run on air and water alone after all – but we also recognise that consumers now want to hand their hard-earned money over to companies that fit with their morals and ideals; they’re no longer just driven by products and services. Now, none of us are naïve enough to believe customers will buy solely on purpose alone either, but it’s the combination of the two which ensures business owners can capture consumers across the board, leading to a profitable company.
Don’t buy it? All data available points to purpose as a profit driver. Eighteen months ago, the head of Unilever admitted that the brands in its portfolio that had a purpose were growing twice as fast as those that didn’t. In an age where discount promotions have become the norm, brands and businesses can no longer expect to grow if they compete on price alone. Take Dove as an example, now seen as a champion for ‘real women’ or Ben & Jerry’s the fair-trade ice cream company. These brands do well because customers feel they know what they stand for and that by choosing to buy their products, consumers are serving a higher moral purpose of their own.
Millennials as a generation are the most likely to be motivated by outcomes other than money, and with their buying power set to grow quickly over the next decade – to the tune of an estimated $41 trillion in transferred wealth – it’s a strong message for brands to tap into. By aligning profit goals with a strategy that best communicates your company purpose, consumer trust will soon translate into money in the bank.
Billionaire philanthropist & Virgin Start Up founder Sir Richard Branson believes the companies who will thrive in the future are those with ‘purpose before profit’. This is something I wholeheartedly agree with, but it’s the philanthropists or investors with a social conscience, backing the businesses who know why they exist, that will be the ones who ultimately kick start the pace of change.
There’s now a moral and a business case when it comes to putting purpose ahead of profit – so the question is no longer which do I focus on, but how can I make both a priority?