Companies can still make money while being environmentally and socially responsible. They can even be activistic and rally behind causes. But to do so they need to think like the people who built the world’s ancient cathedrals, business and civil society leaders suggested at a recent conference in Sydney.
The Purpose conference, held on December 5 and 6, brought together business, social enterprise, government, and activism sector leaders to discuss why it is not only important, but beneficial for businesses to adopt a purpose that goes beyond profit-making.
A key strategy that can help businesses do this is cathedral thinking, said speakers at the event, which took place across several venues in Sydney’s Paddington neighbourhood.
Heralded as the “antithesis of short-termism and overnight success mentalities” by the conference curators, cathedral thinking is inspired by the process of designing and building ancient cathedrals. It requires individuals to approach decision-making in a way that factors in consequences over multiple generations, and requires a collaborative effort among different disciplines.
Chris Halburd, company sirector at law firm Skinner & Associates and advisory board member of the The Purpose of the Corporation Project—an initiative which aims to get companies to move beyond profit-only motives—told the 400-strong crowd that “shareholder value thinking is a significant barrier to cathedral thinking”.
Under a shareholder value paradigm, employees are seen a cost that can be cut down by outsourcing labour or automation; research and development in technologies that promote long-term sustainability are seen as expensive; and companies make charitable donations to portray themselves as good corporate citizens while pushing social and environmental costs of their operations onto society, noted Halburd.
And because most large firms today are so governed by shareholder value, “the corporation as we know it is not the best vehicle for achieving purpose,” he added. While it will take time to shift big companies from their current form to ones that care for the community and environment, a good first step is for companies to become B Corps, noted Halburd.
This is a voluntary certification for firms that can demonstrate that they are creating a positive impact on world, and delivering benefits to all stakeholders, not just shareholders.
Can companies be activists?
Beyond striving for business to deliver far-reaching benefits, purpose-driven companies can also rally their customers and offer their resources to activist causes they care about, said speakers.
One example of this is United Kingdom-headquartered personal care brand Lush, which makes vegetarian, cruelty-free cosmetics.
Peta Granger, director of Lush Australasia, shared how the company this year teamed up with campaigning group GetUp! to advocate for asylum seekers detained by the Australian government in offshore camps in Nauru and Manus Island, Papua New Guinea.
GetUp!, which is campaigning to ‘Bring Them Here’—and for refugees who have been brought to Australia for medical treatment, ‘Let Them Stay’—partnered with Lush to use the company’s window displays to place posters featuring the detainees and their stories.
Lush also trained its staff to speak to customers about the campaigns, and created special products where proceeds from sales would be donated to GetUp! or the Asylum Seekers Resource Centre, an advocacy group. The company also employs asylum seekers in its factories.
During the month that Lush ran its campaign, its sales peaked to an all-time high in recent years, shared Granger.
“We have certainly lost some customers along the way who tell us to get our politics out of their bathrooms,” she said. “But that’s okay, because the value of the customer that we do attract is tenfold”.
“For us, (greater sales) is never the reason why we campaign, but it can make a strong argument to other businesses that it is possible to be profitable and campaign on hard hitting issues at the same time,” she added.
For us, (greater sales) is never the reason why we campaign, but it can make a strong argument to other businesses that it is possible to be profitable and campaign on hard hitting issues at the same time.
Peta Granger, director, Lush Australasia
Purpose goes mainstream
While many companies that are clear about their purpose are young and relatively small outfits, the benefits of creating and pursuing a motivation other than profit can be difficult for larger companies, shared speakers.
Tracy Conlan, director in the strategy team at professional services firm EY, noted that many of the large companies the firm advises are “very, very nervous” about the concept of a purpose other than profit, because it is difficult to measure, track, and integrate into corporate structures.
Employees also tend to be cynical about the idea of adhering to a corporate purpose because they see it as “another way to squeeze more productivity out of people,” shared Conlan.
“Big firms are starting to welcome the idea, but they just don’t know what to do with it,” said Conlan.
And sometimes, making major changes to a company’s purpose can be risky, she added. When American pharmacy chain CVS for example decided to stop selling cigarettes in 2014 to be consistent with the company’s purpose of “helping people on a path to better health”, it was a decision that resulted in US$2 billion a year in lost revenue; as well as job losses.
Small businesses can help larger outfits navigate these challenges, she added. This is because they tend to be purpose-driven from the very beginning rather than try to craft it after the fact. More platforms to allow the two types of businesses to exchange ideas would be useful, said Conlan.
“When it comes to getting behind a purpose, large organisations have a lot at stake, and they have a lot to learn,” she added.