Beyond Profits: Why Businesses Are Embracing Purpose-Driven Leadership
In a volatile economic environment, it's tempting as a business leader to have a laser focus on profit above everything else. Higher revenues underpinned by cost-efficient processes will drive up market share and ensure sustainable success, surely? Not necessarily - a recent McKinsey survey found that 82% of employees believe it's important for a business to have purpose, and 72% said this should be prioritized over profit. Driven by demands from shareholders, customers and employees, more and more companies are pursuing environmental, social and governance (ESG) goals, often linking these to reward structures or how employees are promoted.
People watching a presentation on a whiteboard in an office meeting room.
But what does being a purposeful business mean? This will vary from one organization to another, but one of the key characteristics is that it sets a clear vision and mission, with benefits that extend beyond the business. For a recruitment business like mine, that might how we address skills shortages or remove barriers to employment for under-represented groups. It could reflect how managers inspire and empower their teams to do their best work, or how a business uses technology for good rather than just to speed things up. One of the most famous examples of purposeful businesses is The Body Shop, which has pioneered cruelty-free and fair-trade beauty products, but also operates an 'open hiring' policy that means candidates are successful if they meet just three simple criteria, trusting people's potential rather than their history.
At Tiger Recruitment, we operate according to five guiding principles: excellence, positivity, integrity, dedication and gravitas. But these are more than words painted on a wall; we hold employees accountable for these values because that means our clients can instill their trust in them to do a fantastic job. We are also B-Corp certified, which means we have been verified as meeting the highest standards for social and environmental impact. B-Corp certification is a commitment to good governance and transparency, and one that we need to review and recertify every three years. In an industry often characterized by shady practices, our values-led approach makes us an outlier. It also makes it easier for us to retain employees, who value our commitment to fostering a positive working environment and espousing social and environmental responsibility.
Being a purpose-driven business and a profitable one is not mutually exclusive - it's not about choosing one or the other. Candidates and clients want to work with ethical recruiters so come back to us again and again. Our ratings with customers and employees are consistently high, and would not be so impressive if we did not treat people with fairness and integrity. To ensure we remain true to our values we have systems in place that hold people accountable to not just sales targets but also compliance standards. It's important to deliver what we say we will, and not just talk a good game. By making it part of our 'business as usual', it informs everything we do and gives our company a reason for being beyond financial gains.
Company culture is everything when it comes to demonstrating purpose. Leaders need to role-model the values of the business if they are to trickle down to line managers and their teams, for example explaining the wider impact of a key decision or consulting with communities if new products or services are likely to affect them. As a leader I keep leading the organization back to our five principles, bringing them up at off-site meetings or town hall discussions, and they are now fully embedded into how we recognize staff achievements and celebrated at every opportunity.
Of course, being a purpose-driven business has its own rewards in terms of employee satisfaction and pride, but increasingly businesses are being asked to report on their non-financial impacts on society. The EU Corporate Sustainability Reporting Directive, for example, will require companies to publish regular reports on their ESG activities from this year. More and more companies are ahead of the curve on this type of reporting, disclosing non-financial data in their annual reports alongside their revenue and profit figures.
Being purpose-driven can also mean commercial success. Companies that are vocal about their societal impact can be more effective at attracting talent, for example. Almost nine in 10 Generation Z and millennial workers say purpose is important to their job satisfaction and they are likely to turn down work or employers that don't align with their values, according to Deloitte. Building a culture of purpose also creates a sense of trust and safety in an organization, which in turn fosters innovation and ultimately profit. Having a positive impact on society is not a quick gimmick for charity days or to look good in a press release; working in this way can also drive financial performance and keep your workforce happy in the long term.
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