Date post: | 16-Apr-2017 |
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purpose.do sallyrhill
10:00 am Introductions
10:15 - 11:15 am The purpose-driven business landscape
Break
11:35 - 1:00 pmWhat can purpose do?
Lunch
2:00 - 3:00 pm Your Business: Purpose applied and purpose frameworks
Break
3:20 - 4:20pm Meet the masters: Guest speaker
4:20 - 5:00pm Takeaways: Tools and Resources
The day
Group intros:+ name + role & organisation + why you were interested coming along + what you’re hoping to get out of the day
purpose.do sallyrhill
Purpose in a nutshellWhat is a purpose-driven business?
Organisations have often been divided into two major types: non-profits and for-profits.Purpose-driven business is something in between.
Purpose is an aspirational reason for being that is grounded in humanity and which inspires a call to action.
All companies have a purpose - however we define purpose-driven business as companies that are oriented around something other than money and serve a higher, positive purpose.Today we’re talking primarily about organisational purpose rather than personal.
purpose.do sallyrhill
Long-term/outwardly focused
Aspirational and belief-driven
Humanistic
Broader than the company’sactivities, products or services
Resonates with the company’sDNA and values
Captivates customers,employees, partners and the market
Timeless (or lasts at least 100 years)
‘Why a company exists in the first place’ (David Packard)
Purpose is Purpose is not
A vision
A mission, values, credo, tagline etc.
Philanthropy
Solely focused on the organisation internally
Branding, corporate sustainability, or public relations
Short term
Business goals or strategy
About being trendy
‘Tacked on’ via marketing or community activities
purpose.do sallyrhill
The business world has a spotlight firmly on purpose
Simon Sinek “Start with why”
purpose.do sallyrhill
Edelman GoodPurpose studyHavas Media “Meaningful Brands” Global ReportDeloitte Core Beliefs & Culture surveyEcho Global CSR Study
Consumer expectations have shifted
• 87% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’ interests
• 80% of global consumers think it’s important for companies to make them aware of their effort to address social issues
• Only 6% believe the singular purpose of business is to make money for shareholders
• 76% think it’s ok for brands to support a mission and make money at the same time
• 91% of global consumers would switch brands if a different brand of similar price and quality had a strong mission
purpose.do sallyrhill
Edelman GoodPurpose studyHavas Media “Meaningful Brands” Global ReportDeloitte Core Beliefs & Culture surveyEcho Global CSR Study
Consumer expectations have shifted
• 54% of consumers don’t trust mainstream brands
• 47% of global consumers buy brands that support a good cause at least monthly
• 53% would not invest in a company that does not actively support a good cause
• 90% would boycott if they learned of a company’s irresponsible business practises, and more than 55% have done so in the past 12 months
purpose.do sallyrhill
Employee expectations have shifted
47% percent of tertiary students are Purpose-Oriented and they are raising the bar for higher education and the workplace. Employers and colleges that are able to adjust to meet these needs will likely thrive over the next few decades(Imperative 2016 Purpose in Higher Education Report)
The movement is already happening. People are increasingly looking for jobs that give them personal fulfillment; and companies are seeing that purpose-oriented employees are more productive and successful.
(Global Purpose Index 2016)
purpose.do sallyrhill
The data is showing that purpose-driven companies outperform others
“A purpose mobilizes people in a way that pursuing profits alone never will.” - FastCompany“Over a decade-long period, purposeful, value-driven companies outperform their counterparts in stock price by a factor of 12.” - John Kotter and James Heskett, Corporate Culture and Performance “Those companies able to harness the power of purpose to drive performance and profitability enjoy a distinct competitive advantage” - Valerie Keller, Global Lead, EY Beacon Institute The meaningful brands index outperforms the stock market by 120%- Edelman GoodPurpose Study
purpose.do sallyrhill
The data is showing that purpose-driven companies outperform others
In ‘Firms of Endearment’ - the authors profiled 28 FOE and found that they not only outperformed the S&P 500 by huge margins, they also outperformed the companies highlighted in the bestselling book Good to Great, which identified 11 companies that delivered superior returns to investors over extended periods. The performance metrics below are nothing short of astounding.
purpose.do sallyrhill
EY Beacon Institute
The data is showing that purpose-driven companies outperform others
“Those companies able to harness the power of purpose to drive performance and profitability enjoy a distinct competitive advantage” - Valerie Keller, Global Lead, EY Beacon Institute
purpose.do sallyrhill
CSR
Corporate sustainability
Shared value
Integrated reporting Purpose as a change enabler, guiding force & competitive advantage
PhilanthropyRegenerative design
Circular economy
Corporate context
purpose.do sallyrhill
Emphasis on the ‘driven’ or ‘led’ in purpose-driven or purpose-led
By acting on their purpose, companies can create more value for their shareholders and society over the long term than by pursuing purely financial goals or a narrowly defined self-interest.
- EY Beacon Institute
The Purpose Paradox
“The best way to maximize profits, is not to make profits a primary goal.”
- John Mackey, co-founder and CEO of Whole Foods
purpose.do sallyrhill
The Purpose EconomyResource Framework Who?
Brands
- purpose is what’s next after information economy
- purpose as the primary driver of economic output
- purpose as the common denominator in other mega-trends
Aaron Hurst
purpose.do sallyrhill
Higher Purpose: Recognising that every business has a purpose that includes, but is more than, making money. By focusing on its Higher Purpose, a business inspires, engages and energizes its stakeholders.
Stakeholder Orientation: Recognising that the interdependent nature of life and the human foundations of business, a business needs to create value with and for its various stakeholders (customers, employees, vendors, investors, communities, etc.). Like the life forms in an ecosystem, healthy stakeholders lead to a healthy business system.
Conscious Leadership: Human social organizations are created and guided by leaders – people who see a path and inspire others to travel along the path. Conscious Leaders understand and embrace the Higher Purpose of business and focus on creating value for and harmonizing the interests of the business stakeholders. They recognize the integral role of culture and purposefully cultivate Conscious Culture.
Conscious Culture: This is the ethos – the values, principles, practices – underlying the social fabric of a business, which permeates the atmosphere of a business and connects the stakeholders to each other and to the purpose, people and processes that comprise the company.
• Business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence and it is heroic because it lifts people out of poverty and creates prosperity.
• Free enterprise capitalism is the most powerful system for social cooperation and human progress ever conceived. It is one of the most compelling ideas we humans have ever had. But we can aspire to even more.
• Conscious Capitalism is a way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact on the world.
Conscious Capitalism
Brands
purpose.do sallyrhill
Conscious CapitalismResources Framework Who?
John MackeyRaj Siodia Michael Bradley
purpose.do sallyrhill
Shared ValueFramework
- Shared value is a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business.
purpose.do sallyrhill
Circular EconomyAbout FrameworkWho? Brands
A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.
purpose.do sallyrhill
Cradle to CradleResource Framework Who?
Brands
- created by industrial designer William McDonough
- also called ‘regenerative design’
- views materials as nutrients circulating in safe, natural metabolisms
William McDonough
purpose.do sallyrhill
Natural CapitalismResources
• Most businesses still operate according to a world view that hasn’t changed since the industrial revolution.
• Then, natural resources were abundant and labor was the limiting factor of production. Now, there’s a surplus of people while natural capital (natural resources and ecological systems that support life) are in decline and relatively expensive.
• Business must adjust to these realities and account for diverse forms of capital/value.
purpose.do sallyrhill
Natural CapitalismFramework Who?
Related ideasSix Capitals
Integrated reporting
True cost accounting
Investing in natural capital
Biomimicry
Radical resource efficiency
Service & flow economy
Cradle to Cradle
purpose.do sallyrhill
B Corp (Benefit Corporations)Resources Who?
• B Corp is to business what Fair Trade certification is to coffee
• It’s about ‘redefining success in business’
• being best for the world, not just best in the world
• Stringent assessment tool and standards
• Alicia Darvall (ED)
purpose.do sallyrhill
Social Benefit CompanyAbout Legally Who?
Prashan Paramanathan, CEO
We wanted our new structure to allow us to raise equity while embedding our purpose into our DNA. Practically what 'embedding our purpose' means to us is:
- that everyone (i.e. shareholders and directors) is clear on what the purpose of the organisation is; and
- that they are required and permitted to act to further the purpose; and
- that shareholders (in particular founders) have a way of ensuring that the purpose is followed even with ownership changes
Current Australian equivalent of a (US) Public Benefit Company
Three tenets included in legal structure of organisation:
- statement of purpose
- statement of director’s duties
- mission lock (changing the purpose or Directors Duties requires a 100% shareholder vote
“a new legal structure for Australian social enterprises”
purpose.do sallyrhill
Social enterprise developmentSocial enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide employment and training, or help the environment.
In Australia there’s no legal structure / entity type for social enterprise but they’re typically defined as:
1. driven by a public or community cause - social, environmental or economic
2. derive most of their income from trade, not donations or grants
3. use the majority of their profits (at least 50%) to work towards their social mission
Typically, they start with the cause and then build a business model around it - meaning one of the key challenges is social enterprise development and sustainability.
Social procurement is becoming recognised as a key way for large organisations to have a positive impact through their purchasing power
• The ‘Finding Australia’s Social Enterprises Report (FASES) 2016, from Swinburne University’s Centre for Social Impact (CSI) in partnership with Social Traders, surveyed 370 social enterprise practitioners.
• Australia’s social enterprise sector is thriving, according to the recently released Currently,
• There are at least 20,000 Australian social enterprises in operation, and many of these are between two and five years old.
Social EnterpriseWho?
Social procurement
ResourceAbout
purpose.do sallyrhill
Not-for-profit + mission-aligned trading activity
eg. Oxfam (stores)
Inspiring Adventures
ADARA Group - Audette Exel (0:22 - 12:00)
Hybrid Models
purpose.do sallyrhill
Community or welfare organisation (charity)
NFP with mission-aligned trading
activitySocial enterprise Social / ethical
businessMainstream
commercial business
PRIMARY PURPOSE PRIVATE PROFITCOMMUNITY BENEFIT
via Social TradersSpectrum
purpose.do sallyrhill
Community or welfare organisation (charity)
NFP with mission-aligned trading
activity
Social enterpriseSocial / ethical
business Mainstream commercial business
Mainstream business w. shared value
or integrated reporting
Purpose-driven mainstream business
PRIMARY PURPOSE PRIVATE PROFITCOMMUNITY BENEFIT
Spectrum: reconsidered
purpose.do sallyrhill
PRIVATE -> MUTUAL PROFIT
COMMUNITY BENEFIT
B Corp
Conscious Capitalism
Circular Economy
Natural Capital
Shared value
Purpose-driven entrepreneurship
Purpose economy
Spectrum: reconsidered
Community or welfare organisation (charity)
NFP with mission-aligned trading
activitySocial enterprise
Mainstream commercial business
Mainstream business w. shared value
or integrated reporting
Social / ethical businessPurpose-driven
mainstream business
purpose.do sallyrhill
Emphasis on the ‘driven’ or ‘led’ in purpose-driven or purpose-led
By acting on their purpose, companies can create more value for their shareholders and society over the long term than by pursuing purely financial goals or a narrowly defined self-interest.
- EY Beacon Institute
The Purpose Paradox
“The best way to maximize profits, is not to make profits a primary goal.”
- John Mackey, co-founder and CEO of Whole Foods
Pairs to discuss:+ where does your organisation sit on the spectrum? + why? + does profit or purpose ‘drive’ for your organisation?
purpose.do sallyrhill
Purpose
Leadership Behaviour
Values-based Culture
Trusting & engaged employees
Meaningful experience for customers
Purpose as strategy
• Purpose is activated internally by leaders whose daily behaviour and decisions reflect the company’s purpose and values.
• This creates a values-based culture, along with positive interactions and experiences
• Builds employee trust and engagement
• This drives positive interactions and experiences with customers, leading to engaged, motivated and satisfied customers who trust and recommend you.
purpose.do sallyrhill
Brand
Who Gives a Crap, Patagonia (Driving the character of a brand and loyalty - brand equity via story)
Innovation
Nike, Interface (driving force and focus for innovation, R&D, flows to brand)
Team, Community & Culture
ETSY, Blackbaud (community and team can rally around purpose, decision-making clear)
Customer Experience
FrankGreen, Sendle (superior customer experience by solving a problem well)
Parts of a business that purpose can infuse and drive forward
Giving companies a competitive advantage
Profitability and performance
Brands who’ve actually done this and how it has manifested
What purpose can do
purpose.do sallyrhill
Purpose statement:
Build the best product; cause no unnecessary harm; use business to inspire; and implement solutions to the environmental crisis
LeadershipCulture Meaningful experience for customers
CUSTOMER EXPERIENCE
PURPOSE PARADOX - ‘don’t buy this jacket’
INNOVATION
purpose.do sallyrhill
Brand promise
Toilet paper that builds toilets ‘Consumer philanthropy’ - or - we can change the world using beer and toilet paper.Brand Customer experience Culture
BRAND
CULTURE
INNOVATION
purpose.do sallyrhill
Purpose statement:
To be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: people, process, product, place and profits - by 2020 - and in doing so we will become restorative through the power of influence.
CLOSED LOOP
NET-WORKS
BIOMIMICRY
purpose.do sallyrhill
CEO Mike Parker:
“Can we double our business while halving our environmental impact?” “If you have a body you are an athlete” “Bring inspiration to every athlete in the world” Clear case of purpose driving performance and profitability
FLYKNIT
PURPOSE PARADOX - ‘market cap’
FLYEASE
purpose.do sallyrhill
Purpose statement:
Build the best product; cause no unnecessary harm; use business to inspire; and implement solutions to the environmental crisis
Smart cups + Cafe Pay Superior experience for customers
SMART CUPS
SOLVING A PROBLEM
INNOVATION
purpose.do sallyrhill
Purpose statement:
Our mission is to reimagine commerce in ways that build a more fulfilling and lasting world.
We are a mindful, transparent, and humane business.
We plan and build for the long term.
We value craftsmanship in all we make.
AN ‘ETSY’ ECONOMY
INNOVATIONCOMMUNITY
purpose.do sallyrhill
Sendle delivers parcels door-to-door across Australia at flat rates cheaper than post.Meaningful experience for customers Designed to solve the problem of latent capacity in delivery vehicles - and better post. Creates radical efficiency and saves Co2 emissions
purpose.do sallyrhill
Commodity
Products
Services
Experiences
PurposePurpose is at the top of the chain of value creation (video 4:30 -9:36)
Chain of value creation - James Moody (Sendle)
Discussion - what are your favourite examples? What is purpose ‘doing’ for this company? - brand - innovation - team, culture, community- performance and profitability
purpose.do sallyrhill
collaboration & partnerships
circular economy & closed loop
deep community
cathedral thinking
different by design
meaningful work
business model innovation
solving a problem
21st century economics
Key trends and ideas
purpose.do sallyrhill
Long-term/outwardly focused
Aspirational and belief-driven
Humanistic
Broader than the company’sactivities, products or services
Resonates with the company’sDNA and values
Captivates customers,employees, partners and the market
Timeless (or lasts at least 100 years)
‘Why a company exists in the first place’ (David Packard)
Purpose is Purpose is not
A vision
A mission, values, credo, tagline etc.
Philanthropy
Solely focused on the organisation internally
Branding, corporate sustainability, or public relations
Short term
Business goals or strategy
About being trendy
‘Tacked on’ via marketing or community activities
purpose.do sallyrhill
Purpose vs mission
In a 1960 speech to Hewlett-Packard’s training group, company co-founder David Packard said,
I want to discuss why a company exists in the first place. In other words, why are we here? I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reasons for our being. . . . Purpose (which should last at least 100 years) should not be confused with specific goals or business strategies (which should change many times in 100 years). Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose; it’s like a guiding star on the horizon—forever pursued but never reached. Yet although purpose itself does not change, it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress.
purpose.do sallyrhill
• What is your purpose?
• What problem does it solve?
• What special superpower does it employ? (personal or organisational)
• Have we checked that it’s timeless and that it’s not a vision, values or mission statement?
• How will it let purpose drive?
• What benefits would flow from it (brand, culture, team, innovation etc) ?
Purpose definition
purpose.do sallyrhill
Purpose
Leadership Behaviour
Values-based Culture
Trusting & engaged employees
Meaningful experience for customers
• Purpose is activated internally by leaders whose daily behaviour and decisions reflect the company’s purpose and values.
• This creates a values-based culture, along with positive interactions and experiences
• Builds employee trust and engagement
• This drives positive interactions and experiences with customers, leading to engaged, motivated and satisfied customers who trust and recommend you.
Purpose applied: Flows outwards from core
Innovation
Motivation
Story
Brand
Messages
Service
purpose.do sallyrhill
Commodity
Products
Services
Experiences
PurposePurpose is at the top of the chain of value creation (video)
Chain of value creation - James Moody (Sendle)
purpose.do sallyrhill
B Corp impact assessment
Patagonia - ‘The Responsible Company’ checklists
GRI - sustainability reporting standards and index
UN Global Compact - voluntary, CEO commitments
Social Traders - re. improving social procurement
Further resources: tools for assessment & tracking
purpose.do sallyrhill
+ Audette Exel (ADARA Group)
+ Helen Souness (ETSY)
+ James Moody (Sendle)
+ Simon Griffiths (Who Gives a Crap)
+ Ben Burge (Powershop)
+ Clinton Squires (Interface)
+ Kim and Jason Graham-Nye (gDiapers)
Further resources: Purpose (conference) on Vimeo
purpose.do sallyrhill
Spark Strategy - moving from NFP to sustainable enterprise models
Hatched - infusing purpose through your whole company and strategy
EY - purpose-led transformation
Centre for Sustainability Leadership
School for Social Entrepreneurs
Further resources: companies and agencies specialising in purpose
purpose.do sallyrhill
Startup Podcast
Foundr Podcast
People of Purpose
The Good Work Revolution
mezzanine.co
Further resources: podcasts
purpose.do sallyrhill
B the Change Media
Guardian Sustainable Business
3BL
Triple Pundit
grist
Further reading: blogs & online