The word purpose, and the corresponding purpose-driven label, get applied to a lot of different things. If you’ve heard me speak before, you know that this is one of my favorite (or not) challenges about working in the space.
I recently read several studies on “purpose” only to discover that they were looking at something different, like social justice issues or sustainability.
It’s not that these things aren’t important or even relevant to many purpose-driven businesses, but that doesn’t mean the business has a focused purpose or that it’s running against a double bottom line.
Here are 3 things often positioned as synonymous with purpose that…well, aren’t.
The acronym stands for Environmental, Social, and Governance, and there’s a lot that falls under this umbrella, including the popular term stakeholder capitalism.
Environmental discussions can include the circular economy, a company’s impact on the planet, their efforts to become net neutral, and even their ability to work with suppliers to reduce their carbon footprint.
Social discussions are more nebulous, from supporting broader social challenges-like poverty or drug addiction-to how well the company supports its local community.
Governance gets talked about the least-except when B-Labs shows up to push for companies to become B-Corporations, an entity type that hardwires serving society into the legal structure of the business.
While all of these points have a place in the larger principles under which a purpose-driven business operates, sustainability, fair wages, or ethical supply chain concerns aren’t your purpose, and caring about them doesn’t make you purpose-driven.
Note: Your purpose as a business could be focused on the environment or society (ex: Allbirds or TOMS)
2. Social Justice / DEI
Once a subset of ESG, the area of diversity and social justice has come to occupy a role all its own — and remains a top priority on many board agendas.
One of the reports I referenced earlier ended up devoting a third of its content to this area-how important leaders felt it was, whether or not they were addressing it, and the barriers they faced in doing so.
They treated this issue as one and the same with purpose…but it isn’t. A purpose-driven organization will treat its people assomeone, not something, and value the whole person while striving for a diverse and inclusive culture.
Doing so doesn’t mean you have a purpose or that you’re purpose-driven. It means you’re working to treat your people well.
Note: Your purpose as an organization could be focused on social justice (ex: Constructive)
3. Nonprofit Support
Supporting a nonprofit organization-whether through donations, volunteer hours, or a larger initiative-often gets held up as a sign that the company has a purpose.
Now, it’s possible that your company has selected a nonprofit to partner with in order to maximize impact or to more effectively enable your impact. It’s also possible that you’re writing a check on the side as a way to offset your less-than-motivating business with an annual volunteer day to engage employees.
The first may be a component of a strong purpose-driven model. The second is…not at all. In both cases, your charitable endeavors aren’t your purpose, and supporting a nonprofit doesn’t make you purpose-driven.
Note: Your purpose as a business could be focused on volunteering (example: Benevity)
Your purpose is your fundamental reason for being. It should center on your why-why you exist, why you do what you do the way that you do it, and why what you do matters. To be purpose-driven, you must be committed to both making money AND making an impact, whereby your impact is inextricably linked to how you do business.
These other areas are important but should be addressed in a way that connects to your purpose and makes sense with your business activities. This way, you’ll advance your purpose, reap the benefits of being purpose-driven, and tend to these other issues all at the same time.