When I was first tossing around the idea for Purpose Greater Than Profit, I encountered a few well-meaning critics. I’ve learned this is common when you’re starting something new. As I approach the third anniversary of Purpose Greater Than Profit, I’m busting some common myths I’ve been told about purpose.
MYTH: Purpose is only for small businesses and start ups.
The most common myth I heard when I started blogging was that brand purpose is only for small businesses and start ups. People told me that it was too hard for large, established businesses to change. Purpose must be built into the organization when it was formed. Or, it could be adopted when it was still small and nimble.
I believe this myth was firmly laid to rest when The Business Roundtable issued its Statement on the Purpose of Business last year. Together, leaders of some of the world’s largest, most influential brands agreed that businesses should pursue a purpose beyond delivering shareholder value. One that positively influences each of the stakeholder groups they serve.
MYTH: Purpose doesn’t apply to tech company.
Early on, a friend from a tech incubator told me purpose wasn’t relevant to tech companies, particularly tech start ups. Nor was it relevant to investors. This comment never quite made sense to me. Apple has forever been the dominant example of a company with a clear purpose. Many tech start ups are increasingly taking the lead on new solutions for sustainability, climate change and social issues and impact investing has grown exponentially.
For me, this myth was officially busted a few weeks ago. The only two U.S. companies on the top 5 list of most sustainable companies in the world were tech companies, according to Fast Company.
MYTH: It’s too costly.
Unfortunately, this myth is still circulating and will take some time to break. There are costs – financial and social – to building a business with purpose. However, more brands, like Chobani, Warby Parker, Aerie, Dove and Volvo, are demonstrating that businesses can be purposeful and profitable.
When you factor in changes in consumer behavior as well as the habits and beliefs of millennials, GenZ and GenAlpha, the cost of ignoring brand purpose will soon outweigh the cost of implementing change.
MYTH: It’s a marketing thing.
There are actually two myths here. First is the relationship between brand purpose and purpose marketing. The second is how leaders view purpose.
Brand purpose is the process of defining your organization’s core reason for existing and recognizing the value it brings to its stakeholders. Purpose marketing is leveraging a chosen ‘purpose’ for gain or profit – I don’t recommend this approach.
While the lines can appear blurry, the distinction is often clear. An organization pursuing its purpose is doing the work to align itself around it. Marketing has an important role in story-telling and building consistency. However, brand purpose should influence and align all parts of the business.
What myths about purpose have you noticed that we missed?