Putting purpose on the table
To mark Global Entrepreneurship Week, we brought together a panel of entrepreneurs, social entrepreneurs and other experts to discuss purpose.
It might not come as a surprise to hear us talking about the importance of purpose for entrepreneurs and how it can enhance business performance – we know that for our social entrepreneurs it’s core to what they do.
Perhaps more surprising is the increasing number of traditional for-profit companies who are embracing the concept of purpose and aiming to achieve a positive impact beyond profit. Earlier this month we gathered a panel of traditional entrepreneurs, social entrepreneurs and other key figures from the business world to explore how and why entrepreneurs should put purpose into their business models.
It’s about securing your vision for the future
Whether you are coming from the for-profit sphere or you are a social entrepreneur, having an articulated purpose is just the initial step. Ensuring that your organisation stays true to its purpose in the long run can be a huge challenge.
Jemma Phibbs is the co-founder of School Space, a social venture which rents out schools’ facilities out of hours, raising income to invest in children’s learning, and linking schools with their local community.
To embed their purpose, School Space inserted a social purpose statement into their articles of association and an operational commitment requiring that at least 60% of the properties they work with are state schools. This was reinforced by a supermajority clause (see our explanation below), requiring 90% of shareholding to agree to amendments to these commitments. For Jemma, embedding purpose into the articles was not about changing the way the company works, but rather securing the founders’ legacy.
Jemma said: “It made it clear that our purpose wasn’t going to change if myself or my co-founder left, it wasn’t going to change when we took on investors, which was key for us. In the process of taking on investment it was very clear that that’s what they, investors, were buying into and there was no kind of ‘oh this is the vision but you know if you pivot two years down the line you might change to x…’”
It’s about setting good standards
While the concept of purpose seems relatively straightforward in sectors like education, you hear a lot less about purposeful law firms:
Martin Bunch, the managing partner of Bates Wells Braithwaite (BWB) explained: “We’ve always felt we were sort of different in the way we approach the law and society and the world, and I think we felt that actually as a law firm we wanted to have a positive impact on society, not only for what we do, but what we help our clients do.”
BWB has also put purpose into their company articles of association alongside a set of responsible business principles guiding the way they do business. This helped them achieve the B Corp certification, which ratifies their commitment to doing business in the best way possible for their people, the community and the environment.
Watch the whole purpose roundtable discussion here:
It’s about clarity and decision-making
Several panellists mentioned the clarity their purpose has brought to their organisation and how it has made decision-making more straightforward, for example on hiring staff, recruiting board members or making operational decisions.
Alex Stephany, entrepreneur, sharing economy expert and founder of social venture Beam, added: “If you have everything lined up working in tandem, you have the culture, the brand, the purpose and everything feels aligned, then it’s like a machine where the cogs move and everything works. And if you don’t then that is when things go wrong and springs bounce out.”
It’s about attracting talent
As increasing numbers of people look to for purposeful employment, purposeful organisations can find it easier to attract talent.
“Escape the City started because there was a feeling that quite a few people were unfulfilled in their work. Escape exists to help people escape a place where they don’t feel fulfilled to a place where they do. That is not an easy transition, but the key to the identity shift is finding out how you can match your values, purpose and things that matter to you to your skills and the opportunities in the world.”
Is purpose just a trend?
The panellists debated whether this is just a trend for millennials or part of a ,more fundamental shift. Martin thought the latter: “Having a purpose attracts both clients and new staff who would like to share that purpose with you. It is not just millennials. People are beginning to realise outside that age group that purpose it is a very important part of life.”
“We had the financial crisis, and VW and emissions and people are sick of it, really. And they just think there has got to be a better way of doing business. As a law firm, we want to work for the ‘good guys’ in a way. We want to work for people who actually believe that they can make a difference and do good.”
Our solution: a tool with a purpose
To help organisations address some of the challenges around embedding purpose, we have been working on an online tool which will help businesses truly put their purpose into their DNA – their company articles.
The tool will be launched in February 2018 alongside a wider communications campaign on purpose. You can find more information on the tool here: www.unltd.org.uk/missionledbusiness.
If you have any questions or would like to get involved, get in touch with our policy team.