The Stakeholder Brand Guide: Part One – Finding Your Purpose

The time for declaring your business purpose while here, is now also balanced by a need for businesses to have more clarification on what it truly means to be purpose-driven. In an effort to help companies of all sizes gain some focus in this area, we’ve come up with several focuses or types of purpose that can be infused into a business in many ways.

While you may have heard the terms: corporate social responsibility, social enterprises, benefit corporations, conscious capitalism we attempt to provide some context of their origins, definitions and meanings so that you may chart your own purposeful courses with more accuracy and intention.

There is one common thread among stakeholder brands, their motivation to insure and prosperous future for their business ecosystem and all of it’s stakeholders, primary and tertiary alike.

Types of purpose-driven companies 

Purpose driven doesn’t mean nonprofit. And while your business isn’t the size of Ben & Jerry’s or Patagonia, there’s much you can learn from the ways they shaped their businesses.

Purpose leadership expert Jim Stengel, author of “Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies,” did a 10-year growth study that determined that organizations whose purpose is to improve the lives of their customers outperform their competition and the market as a whole.

Stengel documents how 50 of the highest-performing companies in the world harnessed the power of brand ideals to tower over their competitors. At the core of a brand ideal is purpose.  He says, “Top-performing brands are built on ideals, higher-order purposes that transcend products and services.”

Consciously Capitalistic Companies are Some of the Most Ambitious, Well-Known, Purpose-Driven Companies in the World

As a conscious business leader, you don’t hold profit as the overriding purpose of your business. Profits are used to fuel the practical applications of your ideals whether the focus is on the environment, social equality or some other cause.

  • Conscious capitalism is a socially responsible economic and political philosophy created by John Mackey (Whole Foods co-founder) and Raj Sisodia (professor of marketing at Bentley University) in their book “Conscious Capitalism: Liberating the Heroic Spirit of Business.” 

It’s worth noting that the book and its philosophies were produced and distributed long before Whole Foods was purchased by Amazon. So while we might be hesitant to position Mackey as someone to emulate regarding business or leadership style, we don’t want to ignore that when the book was published, Whole Foods was an amazing example of what an enterprise-level conscious business with local roots could/should be. And he was pioneering these thoughts and processes in his business, not just in academia.

  • Proponents believe businesses should operate ethically by serving the interests of all stakeholders involved—not just corporate management and shareholders.
  • The four guiding principles behind conscious capitalism include a higher purpose, stakeholder orientation, conscious leadership and conscious culture.

And they make money. In 2018, Bank of America Merrill Lynch found that firms with a better environmental, social and governance (ESG) record than other companies of the same kind produced higher three-year returns, were more likely to become high-quality stocks, were less likely to have large price declines and were less likely to go bankrupt.

These are all great incentives to make sure you’re running a conscious business.

As a business leader, you’re faced with an incredible opportunity to carve out a new future for your business by importing the principles of sustainability into your strategy.

Below you’ll see that there are a lot of practical reasons to start your conscious company, but the fuel for any business will be your passion for change, your dedication to your cause and your inherent love for people and the planet. 

Make your business evergreen by becoming a small giant

Evergreen companies are not necessarily conscious, nor do they generally have any expectation to be mission or purpose driven. However, by remaining independent, they hold an advantage when it comes to building mission and purpose into the company because they have no obligation to shareholders or the market’s perception of success. 

In addition, they also generally have strong connections to the communities they serve, which is a hallmark of being stakeholder driven. 

So, what’s a small giant? Great question. Bo Burlingham coined the term in his 2006 book of the same name, subtitled, “Companies That Choose to Be Great Instead of Big.” This means that your company prioritizes mission and satisfying multiple stakeholders over growth for growth’s sake. This is especially important in the context of todays business climate scaling or having a business is deemed to not appear scalable is also determined to not be worth investing in. The correct context is to apply the small giant logic of letting a company scale on it’s own timeline and determine exactly what scaling means to their business, services and the communities they serve.

Companies that call themselves Small Giants have six qualities in common:

  1. Purpose: You have a vision, a powerful mission statement and core values that can be brought to life. 
  2. You’re a servant leader: You believe in leading by values.
  3. Internal culture of intimacy: You put employees first, caring for them holistically.
  4. Financial consciousness: You believe in protecting your gross margins without compromising your company’s values.
  5. External meaningful relationships: You cultivate good and meaningful relationships with customers, vendors and all stakeholders.
  6. Rooted in community: You understand the value of developing roots and immersing yourself in your community.

In a similar vein of being a small giant is becoming an evergreen company. Venture capitalist Dave Whorton and Red Herring co-founder Chris Alden use the term “evergreen” to describe the increasing number of private, profitable, market-leading companies designed to remain unsold and independent for a long period of time.

In a paper released at the launch of the Tugboat Institute, they identified what they saw as the seven defining characteristics of evergreen companies:

  1. Purpose: Be passionately driven by a compelling vision and mission.
  2. Perseverance: Have the ambition and resilience to overcome obstacles.
  3. People first: Engage a workforce of talented associates who excel as a team and are motivated by the mission and the culture as well as compensation. You believe that by taking care of them, they will take care of the business, customers, suppliers and community.
  4. Private: Take advantage of your closely held private company to have a longer-term view and more operating flexibility than a public or exit-minded business.
  5. Profit: Measure your success with the number that provides the most accurate gauge of delivered customer value.
  6. Paced growth: Have the discipline to focus on long-term strategy and grow steadily and consistently each year.
  7. Practical innovation: Embrace a continuous improvement process. Build it around taking calculated risks to innovate creatively within business constraints.

Small Giant Leadership Academy and certification

Small Giants has a Leadership Academy; its one-year certification program “consists of virtual learning sessions with expert leaders and coaches, an extensive resource library, a leadership assessment, and your event ticket to two Small Giants gatherings.”

Built for emerging leaders, the Small Giants Leadership Academy teaches the practices that “make exceptional purpose-driven leaders and cultures” to help you “bring your core values to life.”

Become a Company of One

If a small giant isn’t small enough for you, become a company of one. Paul Jarvis wrote a prophetic book on just : “Company of One: Why Staying Small Is the Next Big Thing for Business.”

Think of this company type as a minimalist organization. These types of companies have been called many things: solopreneurs, mompreneurs, etc., but there is a common thread. They want to have a small footprint while having as big an impact as possible on their businesses ecosystem of stakeholders.

In the book, Jarvis explains how you can find the right pathway to deliberately commit to staying small and how to make it work for you. It’s centered around doing more to become a business that charges for things that are not based on you spending time doing them yourself and or having a finite amount of clients and customers so that growing the business is fairly impossible but growing revenue becomes part of locking in long term partnerships with clients. In the book he says

“By staying small, one can have freedom to pursue more meaningful pleasures in life and avoid the headaches that result from dealing with employees, long meetings or worrying about expansion.”

Create a Locally-Focused Business

Keeping business and money local is one of the best ways to support your community’s geographic business ecosystem and keep money from going to big box retailers and services that generally don’t invest in that geographic community.

The most recent survey of more than 3,000 business owners, independent businesses in communities with a long-term “buy local and independent” campaign reported average revenue growth of 7.4%, which is nearly double the 4.2% increase for independent businesses not supported by these campaigns.

The following resources will help you start your own “buy local” campaign or start a small business alliance in your community.

  • The American Independent Business Association (AMIBA) provides templates, reports, and other resources to help small businesses thrive. AMIBA works to help independent businesses successfully compete by educating the public on their value, sharing skills and resources, creating a strong voice for independent businesses, and enhancing opportunities for local entrepreneurs.
  • The National Federation of Independent Business (NFIB) currently has around 350,000 small business members, and they specialize in small business advocacy. NFIB stays up-to-date on the issues that affect small businesses and lobby governments on their behalf. You will also have access to their networking events, discounts, and various resources.
  • A Local or Industry Specific Chamber of Commerce is a great resource for small business, and you’ll find a directory here. Small businesses that target a local market should consider joining the local chamber of commerce. It may come with a small price tag, but it’s usually worth the expense. Members receive small business newsletters, entrepreneurship workshops, booths at local shows, and discounts. This is one of the best small business associations for B2B businesses, because you’ll meet new customers at events, which provide an easy way to network and advertise in a casual setting.

Environmentally or sustainability-focused companies

Environmentally and sustainability-focused companies are generally referred to as “green.” This means that they make sure company policies and actions put environmental sustainability first.

But sustainability is not just about the environment. It includes meeting the needs and hopes of today while staying focused on the future. This means that customer, employee and community wellbeing are also important, as is financial solvency for the company.

If you plan on starting or pivoting to being an environmentally or sustainability-focused company, you might consider a triple bottom line (TBL) business approach.

Investopedia defines TBL as a business framework that has three bottom lines: profit, people and the planet. This means that your company keeps track of its commitment to corporate social responsibility and its impact on the environment over time.

According to the TPL model, if your company looks at profits only, ignoring people and the planet, it can’t account for the full cost of doing business.

Making your Company Sustainable

Building a business on your beliefs is about value creation. How you conduct your business has to be consistent with what your company is doing to drive value, preserve integrity and attract discerning customers.

The International Institute for Management Development offers the following practical recommendations. The best solution depends on your ambitions and what’s at stake.

  1. Align strategy and sustainability: Management must make sure that the strategy of the company and sustainability efforts are aligned. If there is divergence, this makes the sustainability efforts fragile, lacking real commitment and prioritization.
  1. Compliance first, then competitive advantage: First and foremost, companies need to address compliance, which often relates to regulations in waste management, pollution and energy efficiency as well as human rights and labor responsibility. Compliance is also an issue that concerns investors. A full 44% of investors say that they divest from companies with poor sustainability performance.
  1. Transparency: Transparency is a precondition for assessing and improving sustainability practices. You can’t judge without transparency. It builds on the idea that an open environment in the company and the community will improve performance. The only way for companies to accomplish transparency is through open communications with all key stakeholders built on high levels of information disclosure, clarity and accuracy—as well as an openness to recognizing faults and improving practices.
  1. Engage your ecosystem: Collaboration is critical for efficient sustainability practices, in particular in solving crises and in shaping broader solutions. The data shows that 67% of executives see sustainability as an area where collaboration is necessary to succeed.
  1. Most importantly, engage the organization broadly: One example of engagement is Salesforce.com, which through its “1/1/1” philanthropy program contributes to each employee’s personal ability to engage with environmental organizations and initiatives that support local communities. 

Social equality-focused companies

Just what is social equality? It means that people within a specific society or isolated group have the same status in all respects, including civil rights, freedom of speech, property rights, and equal access to social goods and social services. But it also includes health equality, economic equality and equal opportunities.

Social equality means there are no legally enforced social class boundaries and no discrimination motivated by an inherent part of a person’s identity, such as sex, gender, race, age, sexual orientation, origin, class, income or property, language, religion, convictions, opinions, health, or disability.

Equal opportunity means being judged by ability rather than on any of the above inherent traits.

What does this mean to your business? If your business mission is social equality, focus on minority, othered and disadvantaged or traditionally marginalized groups for both your customer base and your employees.

Read more about certifications for equity focused businesses

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