Building a responsible business: Balancing profit & purpose

In the past, businesses used to focus on marketing their brand to reach a wider audience, increase sales, and maximize profits, in a competitive race to the top where each vied for attention. However, things have changed, where there is now a need to consider the impact businesses have on the world around them. E.g. consumers have certain expectations from brands they love – and a lot of it is centered around what’s important to them – be it the environment, or quality of life. The math checks out, too – a 2002 Nielsen study indicated that a staggering 66% of global consumers are willing to pay a premium for sustainable brands that demonstrate a commitment to making a positive impact.

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One-third is a lot. It certainly brings businesses to the table, where they must reassess their strategies and operations to meet such evolving expectations, and build a consistent focus on balancing profit and purpose in ways that ensure relevance, as well as longevity.

If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have

Yvon Chouinard, Founder, Patagonia

Such a pursuit of fulfilling a broader social purpose while running a profitable business is no longer looked upon as a challenge or a conflict to objectives. Instead, these are increasingly recognized as mutually reinforcing elements that can drive long-term success and sustainability. At the core of this transformative shift lies the concept of shared value, a term popularized by Harvard professor Michael Porter. Shared value contends that businesses can create economic value, while concurrently advancing societal goals. In essence, it advocates for a harmonious coexistence of profit and purpose, debunking the myth that they are conflicting objectives.

I have attempted to outline the key aspects that may help achieve this balance towards building a responsible business.

A clear purpose

Most leading brands would have one. But is it aligned to the times, or even the future? The first step in building a responsible business is to begin by clearly defining the purpose of your business after looking at the current, as well as projected societal and environmental issues that resonate with the company’s values. Establishing such a purpose must also resonate with both internal and external stakeholders for it to create positive association on one hand, and organically turn employees and consumers into advocates.

Integrating said purpose with business objectives

It’s not just about having a noble cause as words on digital screens or banners; it’s about ensuring that most, if not all business objectives, align seamlessly with your defined purpose. The purpose should be a living, breathing entity reflected in the day-to-day operations of the business, going beyond the tagline; serving instead as a guiding principle that influences decision-making at every level. From product development to marketing strategies, the purpose may serve as the compass that directs your business journey. This integration will ensure that your business’s pursuit of profit is not detached from the pursuit of purpose or a positive change.

Maintaining transparency

Once operations are aligned with purpose, the next step is to open the curtains and reveal the impact of your business, on society, people, and the environment. Such transparency turns to glue that binds purpose, objectives, and operations, reflecting an accountable and evolving brand. Such a journey is never flawless, and yet, demonstrating a commitment to learning from missteps strengthens relationships with stakeholders, fostering a sense of accountability.

Engaging with employees & stakeholders

When building trust is the essential rhythm to the survival of any business, employees, and stakeholders are the veins that maintain this heartbeat. Engaging them helps maintain a well-functioning cardiovascular system for the business, while strong communication and collaboration create a steady, trusted pulse that propels the business forward. Any breakdown — be it in communication, trust, or engagement — is to be considered a business cardiac arrest. A responsible business must therefore commit to both ethics and financial success that sustains such a trust-driven heartbeat.

Focusing on what matters the most: Authenticity

At last, it is the authenticity of a business that speaks volumes. In the world of responsible business, authenticity is the secret sauce that amplifies impact, and resonates with a conscientious audience. It’s no secret (and widely evident) that consumers dig into brands that are genuinely committed to their purpose — no matter what! For a business to build a lasting relationship with their audience, authenticity is the currency that builds trust — which in turn is the crucial foundation that ensures longevity of responsible business practices.

Such a delicate balancing act demands that companies go beyond financial performance indicators to adopt measures that reflect their commitment to shared values, such as social impact assessments and sustainability metrics. It may vary from one company to another, and yet, the purpose becomes the guiding star that keeps our direction and destination clear.

• IBM SkillsBuild initiative that goes beyond traditional business boundaries by offering free access to online learning resources and certifications, empowering individuals with sought-after skills.
• Unilever’s Sustainable Living Plan is committed to doubling its revenue while reducing environmental footprint and improving social impact.
• Salesforce has the 1-1-1 model that provides employees’ time to charitable causes. 

All of these are prime, as well as simple examples where businesses not only enhanced their reputation, they also saw an uplift in employee morale.

Our world must only get better

“If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have,” said Chouinard. “This is another way we’ve found to do our part.”

– Yvon Chouinard, Founder, Patagonia.

In 2022, Patagonia’s founder, Yvon Chouinard set a new standard in environmental corporate leadership by giving away the company and its future profits to fight climate change. While his action may truly be considered magnanimous, it reflected a foundational purpose – we can only exist if our world exists in ways that allows our thriving existence. Businesses cannot afford to turn a blind eye upon their impact on both the society, or environment.

From investing in workforce development to championing sustainable supply chain practices and innovating to address social needs, businesses that strike the right chords reap the rewards of building a responsible business. They must make sure that each step, all the actions, and every story they say out loud must add a step count toward a better, more sustainable future.