This year marks the 50th anniversary of economist Milton Friedman’s (in)famous declaration that “the social responsibility of business is to increase its profits”. It’s a far cry from where we are now, mid pandemic, with economic decline, social justice protests, climate change and growing public expectation around businesses stepping up and taking responsibility for their people and pressing societal issues. Whilst profit still has to be a core aim of any business – they struggle to exist without it - there are increasing calls for companies to develop and demonstrate an authentic purpose beyond making money, addressing and articulating why they exist and the broader value they offer to employees, customers, communities and the environment.
While the crisis has thrown up huge challenges for businesses globally, it has also provided leaders with an opportunity to step back and rethink what purpose means to them. Over the past few months, we’ve seen some shining examples of brands being guided by higher values and making a real difference – not just to communities and society in general, but specifically to their staff. As an example, as the pandemic crisis took hold, Microsoft pivoted its retail operations to keep store employees in jobs and able to work virtually. It also provided twelve weeks parental leave, supporting education and childcare at home.
According to PwC UK’s recent CEO Panel Survey 2020, CEO’s globally have been prioritising employee wellbeing as part of their purpose. 92% are protecting employee health and safety. 61% are conducting wellbeing initiatives and 24% are providing additional financial support to employees. All very positive to hear.
Given that purposeful companies grow three times faster than their competitors and are more likely to be profitable (Deloitte Insights), now is the time for business to leverage purpose, for the benefit of people, planet and profit. This includes not only delivering value to customers and stakeholders, but also investing in and looking after employees, dealing fairly and ethically with suppliers, supporting communities, protecting the environment and building long term business value and sustainable growth.
Now is certainly the time to “build back better” to quote the title of a current campaign in the UK, and to use the power of purpose to drive positive societal and business change for the long-term benefit of us all.
Managing Partner, Strategy
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