11 December 2023 |
It’s Time for Purpose
This article was originally published on LinkedIn on June 29, 2023.
When asked what businesses are for, many people currently associate their goals with commercial success, profitability and shareholder value.
However, businesses who are delivering bottom-line financial returns by making a positive impact on society and the environments in which they operate are increasingly experiencing tangible competitive benefits.
These derive from the greater trust that many customers, employees, communities, investors, suppliers, and government have in these businesses. More people will choose to buy from or support, choose to work for or choose to invest in a business. All of this positions a business to future-proof their business to be more resilient to economic shocks.
Scotland’s Business Purpose Commission found that businesses who promote the interests of their employees, suppliers, communities, and environment as well as their customers and investors are increasing their chance of success. Whilst globally, trust has declined in government and the media, trust in business appears to be growing*, many people are looking to businesses for leadership and to solve problems.
In Scotland, many citizens are looking to business to play a stronger part in promoting employee, societal and environmental wellbeing. The business-led Commission highlighted the immense potential for purposeful business to enhance not only the performance of business but also the wellbeing of Scotland as a whole. Business is the source of prosperity and the growth of nations but it has also been a cause of growing environmental pollution, inequality, and social exclusion.
By acting as the guiding star of a company, a strong business purpose can both enhance business’ contribution to prosperity and diminish its detrimental effects. The idea of purposeful business isn’t a new one but ongoing economic, environmental, financial, societal, and public health crises have lent an urgency to embedding it across all our businesses.
The Business Purpose Commission presents the business case for purpose, sets out the practical actions all of us can take and provides examples of Scottish businesses leading the way. The Commission found businesses can best weather current economic challenges and seize future market opportunities by becoming purpose-driven. Their findings are influencing changes in business support and, indeed internationally, with Canada emulating Scotland’s way forward.
In setting up its New Deal for Business Group, the Scottish Government has made clear its commitment to rebuilding the trust between government and business. Actions which take forward the recommendations identified by the Commissioners will help ensure the New Deal and the goals of a wellbeing economy are something business understands and can get behind.
The Commission’s work provides a framework that sets out how business is contributing to a wellbeing economy and how it can contribute further. Prosper Scot believes building a greater coalition of businesses and other organisations that can run with the business purpose framework (tying-in other journeys, standards and certifications including B-corps, etc) is an effective way to build more purposeful business and become the Wellbeing Economy work. Policy makers and the Chief Economist can support this by evaluating how this acceleration in purposeful business is contributing to wellbeing goals.
*2022 Edelman Trust Barometer
What is business purpose?
The purpose of a business is why it exists, is created, and its reason for being. It is fundamental to every business and should drive its core strategy and activities.
Why you should read it?
The report as providing the most comprehensive, practical, evidence-based description to date of the public policies and business practices that together can make Scotland the world’s leading purposeful economy. It describes many impressive examples of Scottish companies which are profitably solving the challenges of people and planet and demonstrates how purpose can be placed at the heart of every Scottish business.
Who are the recommendations for?
The report sets out a series of recommendations for how business, government, investors, consumers, and educational institutions can all contribute to embedding purpose throughout the Scottish economy and how working together they can promote a prosperous, flourishing, and fair society.
Sara Thiam is Prosper’s Chief Executive
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