So What Exactly Is A Purpose-Led Business?
TOMS founder, Blake Mycoskie, is a powerful example of a purpose-led business leader. While traveling in Argentina, Mycoskie discovered the children in a village he was visiting were so poor that they had no shoes to protect their feet. Wanting to help, he created TOMS, a company that would match every pair of shoes purchased with a pair of new shoes given to a child in need. A business model he called One for One™.
To date TOMS has given over 60 million pairs of shoes to children in need from over 70 countries. Realising this business model could serve other essential needs, Mycoskie launched TOMS® Eyewear in 2011. As a result, 400,000 people from over 10 countries have had their sight restored through the provision of prescription glasses, medical treatment and/ or sight-saving surgery with each purchase of eyewear.
TOMS Roasting Company launched in 2014 with the purpose of providing clean water to developing communities with the purchase of premium coffee. And in 2016, TOMS Bag Collection was founded with the mission of helping to provide training for skilled birth attendants and distribute birth kits containing items that help a woman to safely deliver her baby.
You can see from this example that Blake Mycoskie made a deliberate choice to run a purpose-led business: one which aims to address key social and environmental issues facing the planet, a country, a local area or a community at some level. The company has long-term, forward-looking intentions to accomplish outcomes that are both meaningful to Blake Mycoskie personally and of consequence and beneficial to the world.
As far as I can tell, the term “purpose-led business” has not yet been clearly defined. That’s why Simon Sinek notes in his bestselling book Start With Why that most purpose-led business leaders can articulate their mission, but many struggle to define and articulate their purpose. I think this statement is understandable because our culture often conflates being mission-oriented with being purpose-led. In his book, Sinek describes mission as being what you’re trying to accomplish in your business, and purpose as the reason(s) behind why you want to accomplish your mission. I think this is useful starting point for describing the term “purpose-led business.”
According to Simon Sinek’s description of a purpose-led business, TOMS’ One for One™ business model describes what the company does to achieve its mission. The purpose, or why behind its mission is driven Blake Mycoskie’s desire to tackle a big societal problem – in this case poverty (the first of the 17 Global Goals).
When defining what I mean by a purpose led business, I like the clarity of Sinek’s explanation. I also like to draw on the Japanese concept of ikigai which loosely translates as your purpose in life. (Ikigai is a uniquely Japanese concept). A purpose-led business is, in my view, shaped around the following four areas:
What you love and care about – where passion intersects with purpose
What you’re good at – things you do naturally well and are highly experienced at doing.
What delivers a financially stable and profitable business model.
And what the world needs.
The first three aspects of ikigai align perfectly with Jim Collins’ Hedgehog Concept which he explains in detail in his seminal book, Good To Great. I draw on Jim Collins’ Hedgehog Concept a lot when working with businesses. However Good To Great was first published in 2001. The world has changed a lot since then, with trust in our institutions eroding. This is why an increasing number of consumers, particularly millennials, prefer to purchase from purpose-led brands.
This fourth aspect of ikigai – what the world (substitute local area or community) needs – gives us a useful way to think about what would make ours a specifically purpose-led business.
A great place to start, when thinking about what the world needs, is with the Global Goals. The Global Goals are a set of 17 priorities which were agreed by world leaders in 2015. They range from ending poverty in all its forms to reducing inequalities to promoting peace, justice and democratic institutions. Each goal covers a multitude of areas in which to act making them a great starting point for the purpose-led business leader who is thinking about their own particular why.
When I was thinking about my own brand purpose, I started by reviewing each of the Global Goals. I selected the following Global Goals and resolved to organise my business around the following:
#4 – Quality Education
#5 – Gender Equality
#8 – Decent Work and Economic Growth
#16 – Peace, Justice and Strong Institutions
Writing regularly about these topics helps me to keep these four Goals at the forefront of my mind. For example, the reason I write such a lot about Brexit and want the UK to remain in the EU is my strong belief that this outcome best delivers economic growth and good paying jobs.
OVER TO YOU
Do you run a purpose-led business? Or are you thinking about how you might transition your business model? I love reading your feedback so please do take a moment to share let me know in the comments box below.
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