“There’s no line item on a balance sheet for ‘give a damn,’ but it’s the most valuable thing you’ve got in the business.” That’s what Dave Schiff once said to Casey Gerald, Co-Founder and CEO of MBAs Across America. Having a laser focus on profit margins and shareholders’ gains just doesn’t cut it anymore. Today’s successful businesses have the foresight to realize that to remain financially stable, they must be proactive in managing their environmental and social purpose.
At Salesforce, we believe that the purpose of business is to improve the state of the world — not make a profit, keep a customer, or provide returns to shareholders, though those things are important and necessary to succeed. And we’re not alone. Many entrepreneurs and CEOs share this sentiment and are actively speaking out about it.
For example, Todd Tillemans, President of Hershey U.S., describes profits as a “byproduct” of establishing a company’s place in its industry and goes on to discuss the importance of purpose for a business. Such companies as Whole Foods, Patagonia, and Starbucks all conjure up images of businesses that go beyond simply creating and selling a product and keeping a customer. Case in point: Whole Foods’ purpose is to “nourish people and the planet.” These brands and countless others mean something to us that’s bigger than the products and services they sell.
If you’re stuck on the traditional bottom line, consider this: Research from the EY Beacon Institute and Harvard Business School found that 58% of companies with a clearly articulated purpose experienced 10% or more of growth; only 42% of companies without a clearly defined purpose saw the same growth. The more we look, the more proof we find that while profit may keep a business afloat, it is purpose that will propel it forward. Here, we explore why this is the case and how to inject purpose into an existing business that may not have one clearly defined.
Why purpose and why now?
Companies that have a higher purpose can weather the financial storms that come with starting and running a business. Their leaders are driven by something bigger than money and bigger than themselves. They’re often trying to solve a problem or fill a need they see in the world.
Historically speaking, however, this hasn’t always been the case. Plenty of businesses have risen to unquestionable success without an underlying, higher-level purpose. So why now? What’s changed? Why has purpose become the must-have ingredient for businesses to grow and thrive in the 21st century?
- Customer expectations. In a study performed by Cone Communications and Echo Research and presented on entrepreneur.com, 87% of U.S. consumers consider corporate social responsibility when deciding which products or services to buy and where to shop. Furthermore, the study found that when choosing between two brands of equal quality and price, 89% of U.S. shoppers are likely to switch to a cause-branded product.
- Employee expectations. According to a study from charity.org, 71% of surveyed employees say it is imperative to work where the culture is supportive of giving and volunteering. Employers are realizing this is beneficial to employee retention. The same study found that 86% of employees expect their employers to provide opportunities to engage in the community, and 87% of employees expect employers to support causes and issues that matter to those employees. People are proud to work for a place with a community mindset, and caring about the community helps create long-lasting loyalty and career satisfaction among employees.
- Business expectations. Peter Drucker, a famed management consultant who contributed to the philosophical and practical foundations of the modern business corporation, once stated that the purpose of business is to create and keep a customer. Now, however, a chorus of CEOs, including Larry Fink (CEO of BlackRock), Mark Cuban (owner of the Dallas Mavericks NBA team and investor on Shark Tank), and our own Founder and Co-CEO Marc Benioff are redefining the role of business as one that aligns with social purpose. Benioff now states, “The purpose of business is to improve the state of the world.” This rallying cry has transformed not only employee and customer expectations but those of corporate partners as well.
Today’s successful businesses are intentionally putting their efforts toward addressing social issues at the heart of their business plans. Patagonia is a perfect example of this. When the country ordered the reduction of two national monuments in Utah, Patagonia decided to make the protection of this public land its business agenda. Patagonia replaced its website homepage with a new webpage stating its stance on this issue and a path for customers to donate to the cause. By tying its brand to a social cause that resonated with its employees, customers, and shareholders, Patagonia has elevated its purpose into action.
How should a business choose its purpose?
Tillemans says a company’s business should be grounded in a human truth – something that is undeniable and universal among all humans. We couldn’t agree more. Hershey’s human truth was that people crave connections and shared experiences. For Tesla, it’s our collective gain that comes from clean air and water — not to mention the grave consequences of unclean air and water. Starbucks wants to “inspire and nurture the human spirit.” All of these purposes are intrinsically human.
What about employees’ purpose?
While we’ve spent the majority of this blog on a business’s purpose and choosing one with which employees and customers can align, sometimes alignment just isn’t as powerful as finding one’s own purpose. A 2016 study called “Purpose at Work” found that 73% of purpose-oriented people are satisfied with their jobs compared with just 64% of satisfied employees who are not purpose-oriented. When employees find purpose at work, they optimize their jobs to align with work that matters to them.
At Salesforce, we believe that companies should embrace a purpose and extend that ability to their employees. That’s why we created Salesforce.org Philanthropy Cloud, a platform that empowers corporations to put their values into action. It helps your business engage customers and employees in philanthropic missions by providing access to more than 1.4 million nonprofits in one place.
With Philanthropy Cloud, employees can quickly and easily donate funds, sign up for volunteer activities, or even create their own volunteer campaign to engage their peers. It’s a platform with both the power and flexibility to help companies and employees alike act on whatever human truth drives their purpose.
To learn more about Salesforce.org Philanthropy Cloud, download our data sheet. Download Now.
