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How fit is your business’ purpose for 2020

2020 promises to be another year of change but one hopefully for good after the recent years' uncertainty.

28 January 2020

2020 promises to be another year of change but one hopefully for good after the recent years’ uncertainty. One thing that is for certain is the post-Brexit landscape and majority government’s activities will require some form of adjustment for businesses and individuals alike.

This shouldn’t stop people planning and defining their purpose for the next 12 months though. This is why our January Godalming Business Club session explored what Purpose means in today’s business world.

To lead the discussion, we were very lucky to have Richard Maybury of Attitude Solutions join us.  Richard’s passion is Welding Purpose to Priorities and he does a great job refocusing and recalibrating businesses to be more purposeful, productive and profitable.

3 different views of business purpose

There have been many different views of business purpose over the years.  Richard highlighted three contrasting ones:

Milton Friedman who in the 1970s said "there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."       

Vineet Nayar – an Indian business executive, author and philanthropist who is the founder, chairman and CEO of The Sampark Foundation. He is also the author of the critically acclaimed management book “Employees First, Customers Second: Turning Conventional Management Upside Down”       

Hamdi Ulukaya – a Turkish-Kurdish billionaire businessman and philanthropist, now based in the United States. Ulukaya is the owner, founder, chairman, and CEO of Chobani, the top selling strained yogurt brand in the US. He promotes that businesspeople should promote a sense of purpose in their corporate culture to create a climate of positive change in business and the world. He endorses companies should focus on humanity and not just on their bottom lines.

Finding clarity of purpose for a changing business environment

The business environment continues to evolve across many strands, for example….

Changing employee attitudes to work
There are changing employee attitudes largely driven by millennials and Generation Z.  Key findings from The Deloitte Global Millennial Survey in 2019 included that optimism and trust is scarce, people are sceptical of business motives and increasingly people want to work for purpose-driven companies.

A changing working space
More flexible spaces and virtual working are changing the way businesses organise and run their operations.  In many cases is greater collaboration between businesses and their teams. Traditional working hours have also become more fluid.

Changing technology
Technology is transforming business and lowering barriers to entry.  It’s enabling agile and disruptive companies to thrive. It’s also helping working environments to evolve by facilitating homeworking, pods/hot desking, easier/cheaper cross-territory working.

Changing customer expectations
Customers now rate the ‘experience’ of buying a product as highly as the product quality and functionality. This is leading customers to research more during the buying process and evaluate the buyer journey experience as they go. You can see the evidence of this in the popularity of checking social proof (reviews, testimonials etc) when buying something and a rise in the scrutiny of a company’s ethics.       

Having clarity of purpose certainly helps businesses to successfully navigate the different stakeholder scrutiny and interests they face.

Looking at four key areas for business purpose

As a group, the Business Club considered what were the key factors a business should consider when defining its purpose and growth in relation to its:

Here are some of the points which were discussed:

Employees and the employee experience: Customer and prospective customer experience:
  • Employees want to be part of a business they can be proud of.
  • The importance of employees understanding what the company is trying to achieve.
  • The responsibility businesses have to demonstrate they care for their employees and the employee experience.
  • Making the most of Employee Ownership Trusts and other incentives to motivate and engage employees.
  • The importance of keeping true to your business ethos – particularly as the company expands.
  • Adding value and being a customer-led business will help you generate positive word of mouth. This is a powerful tool to help promote the company. If you do the best job for existing customers, others will follow
Operations Community and its social responsibility
  • The importance of being alert to how your operations are having an impact on efficiency, effectiveness and overall purpose.  Watch out for trends showing in management accounts, and the ability to cope with seasonal demands
  • Balancing people’s desire for progression with the importance of having the right experience and expertise for roles.
  • Making the most of tax allowances and cash flow management tools to help you finance improvements to your operations.
  • Flexible/remote working models can also bring isolation and missed opportunities for people to pass on experience by working alongside each other.
  • A firm commitment to social responsibility can have a positive impact on recruitment and employee retention.
  • It’s important to recognise actions speak louder than words
  • It helps if employees have a choice, say or influence in the social responsibility activities the business pursues.

Doing business for good is good for business

We wrapped up the session with examples of good inventions and developments that transformed lives as a result. 

George Merck who shared his knowledge of the large-scale production of penicillin with every drug company to ensure it became affordable and widespread in the fight against disease.

John Walker who created the Safety Match and refused to register a patent, wanting to make sure a safe system was available for everyone.

Johannes Gutenberg who created the printing press which made books and papers more affordable for lower classes and improved literacy levels going forward.

Muhammad Yunus who invented microfinance, the practice of lending small sums at a low interest to allow people to start businesses – particularly to transform livelihoods in the third world.

Jonas Salk who created the vaccine for polio and refused to capitalise on it through a patent – choosing instead to gift it to the American people.

Summary

Having clear sight of your business purpose puts you on a stronger footing in changing and uncertain times.  It can help to differentiate you to potential and existing employees, customers and other stakeholders your business needs to impress.  Hurdles can crop up along the way, and it is important to get help, support and advice when they do. Don’t give up on your underpinning purpose, there’s usually a solution or someone to help you get to where you want to be.

A big thank you to Richard Maybury for facilitating such an insightful and thought-provoking session.

If you would like to discuss business strategies, plans and operational issues to turn your business purpose ambitions into reality do contact the Shipleys’ Godalming team for more information.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.

Copyright © Shipleys LLP 2020

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