Several years ago, Pepsico introduced a concept within its global company called “Performance with Purpose.” It was the brain-child of then CEO, Indra Nooyi. The shift was intended to meld the long-term success of the company and ingrain sustainability. Remember, Pepsico is a beverage company, and it was important for their brand to position themselves for sustainable water management.
In other words, integrating the company’s performance with a higher purpose made sense for their bottom line.
Flash forward years later, and I believe that we are approaching a tipping point and more business leaders are receiving the memo.
If you don’t know my background, I’ve been in a business for a long time. I started off as a sales clerk in a retail shoe store at the young age of 15. I worked my way up to becoming the most senior executive of two international shoe manufacturing companies. I then founded a nonprofit after the 2004 Indian Ocean tsunami and grew its budget in excess of $70 million (something only a small percentage of charities have done). I then went back into the for-profit world as an entrepreneur with several businesses and brands, including social enterprises.
Why do I highlight all of these experiences?
I do it so I can drive the point that I’ve been on the for-profit and nonprofit side of the business world and I understand that we’re at a time now where the models and the way we’ve operated in the past are no longer the paths for the future. I’ve said it in the nonprofit space, but for-profit businesses need to hear the same message.
Two motivating factors drive today’s teams, and I see it in my group:
In the past, workers wanted to work for high-performing businesses, and it was all about the work, meaning profit and achievement. That’s not the case anymore. With my unique view, I’ve seen the shift happening toward team members wanting to achieve and work for a high-performing company, but one that is aware of its relationship with the community and possibly the broader world.
Want to know the secret that I discovered long ago?
Purpose drives performance.
Not too long ago, I read the following in this Fortune article:
“What is the purpose of business? The answer to that question has changed. For decades, most business leaders would say their corporate mission was to maximize profits for shareholders and owners. That was the primary success metric for businesses across the country. Today, the answer most commonly is that the ultimate purpose of a corporation is to serve society and to make the world a better place.
Just about everyone from Washington to Corporate America to Main Street is talking about Leading with Purpose.”
I couldn’t agree more, and if you’ve been in business long enough, you are aware that industry has fundamentally changed. Late in 2016, the Korn Ferry Institute completed a study, and it found that companies that integrated a higher purpose––meaningfully––into their business had annual growth rates that were nearly three times more than others in their sector.
The study also found that 90 percent of individuals who work in businesses that have a purpose at its core felt they were engaged in the work. In comparison, only 32 percent felt engagement in organizations that did not have a more significant meaning beyond profit.
As an entrepreneur, I’ve seen the bottom line impact on my businesses by combining performance and purpose. There’s a shift in the minds of the public (consumers and employees) that companies not only have to make money, but they have to be socially responsible with a more profound impact on society, and the thinking will only accelerate. If you’re looking for a key competitive advantage for your company in your sector, consider this formula.
Performance + Purpose = Profit
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)
© 2017 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.